I live in the Sunshine State, aka the Plywood State during hurricane season. And tomorrow begins the six-month hurricane season for 2018 in which the National Oceanic & Atmospheric Administration predicts we’ll see five to nine hurricanes develop out of 10 to 16 named storms of tropical-strength or more.
The good news is … wait, there is no good news. As a reminder, just the three ugly Category 4-plus hurricanes — Harvey, Irma and Maria — that raked our Gulf and Atlantic coasts last September made 2017 the costliest season on record. We’re talking $100 billion in recorded insured losses. But, to make matters worse, the majority of the losses were uninsured, thus impacting boat dealerships, marinas, their employees and families from the interruption of business and more.
A few years ago, I moved to Florida just at the beginning of hurricane season. The local news was redundantly warning about being prepared for possible hurricanes. “The media and people down here are paranoid; I mean what are the odds?” I recall telling my wife. Then, last year, I watched the TV reports of Harvey flooding out Houston. Still I ignored the common sense advice to be prepared. That is, until a visit from Irma became imminent.
The problem was, by the time I woke up and began to board up, all the plywood was sold out to people who listened. So were flashlights and batteries; bottled water was limited; and most other recommended supplies were long gone. Somewhat red-faced, I confess I failed to adhere to the five Ps: prior planning prevents poor performance.
Now, all this is meant to say that as we face another hurricane season, dealers along the Gulf Coast and all the way up the Atlantic basin to Maine should do what I didn’t: execute the 5P’s. So, here are some things to consider, recommended by Andrew Higgins, P.E., who is technical manager at Allianz Risk Consulting:
- What should you be prepared for: Planning for a hurricane involves understanding your facility’s susceptibility to high winds, storm surge and inland flooding. You may be susceptible to only one or all three. Preparing for flooding is very different than for high winds. For example, the majority of preparations for Hurricane Sandy in 2012 (the 18th named storm, 10th hurricane and second major hurricane of that year) were based on a high wind event. Thus, many businesses weren’t prepared for the flooding. Since then, the National Weather Service has begun issuing storm surge watches and warnings to areas that could be inundated from a tropical storm or hurricane. On the other hand, Hurricane Irma, while packing a lot of rain, caused much more wind than water damage when it slammed into Florida. Point: no two storms are the same, so dealers should consider any possible scenario.
- Now create your written preparedness plan: Don’t be like me and ignore it. Preparation before any hurricane can minimize property damage and reduce critical business interruption. Insurance experts recommend every business located in the U.S. hurricane-prone area take time to draft a written emergency response plan. Moreover, it should be reviewed each year to incorporate any significant physical or business changes. It should also spell out any preparation responsibilities of team members and detail site-specific activities to be completed before, during and after a hurricane.
- Update your business contingency plan: The need for a business contingency plan has become increasingly apparent from recent hurricanes. The destruction from Hurricane Harvey in Texas closed many businesses for an amount of time that left tens of thousands of people stuck in shelters or dealing with flooded homes, etc. In the days and weeks that followed, employers had to decide what to do about pay and work obligations, even actions necessary to avoid long-term repercussions for failing to protect employees. Hurricane Sandy, on the other hand, hit the Northeast on a Monday, making it difficult for employees to implement business contingency plans while preparing their homes and families for the storm. A well-developed contingency plan can provides a dealership with tools and direction to get back up and running as quickly as possible.
- Make some improvements to your site: A number of improvements might be made to your physical plant that could allow you to withstand high winds and/or flooding. Some of the more effective improvements might include: Having an emergency generator for loss of power; installing flood doors for the key building(s); raising key equipment above highest anticipated flood levels; and protecting building from high winds (addressing roof, windows and doors).
- Understand your property insurance policy: Finally, if you’re like me, I get my insurances from a friend. Therefore, I just assume everything I need is in there. But the truth is, I don’t really know. For a dealer, that could spell disaster. Before the storm, you should take the time to read your current policy and have your agent (friend or not) review with you exactly what’s covered, to what limits, while carefully looking for anything you think is covered but isn’t. To this point, during Hurricane Harvey, claims adjusters anticipated business interruption losses would outpace actual property damages. Evidence supports that a business interruption can be so devastating that many businesses that aren’t able to resume operations within a short time of a disaster go out of business within a month.
So, right now take advantage of the calm before the storm. As I learned, it could make things a whole lot easier.