Connecting you to Insurance and Risk Management Resources About HUBSign-upSearch

Sheltering Businesses from Severe Weather: Stay on Top of Best Practices to Protect Your Business From This Season’s Storms

Up from $1.4 billion [1] in a typical year, domestic winter-related insured losses are expected to reach $2.5 billion for 2014 [2]. 

From a business continuity perspective, severe weather can be disruptive enough to cause a significant drop in sales or an increase in property damage, employee illness, injury and more. But, it doesn't have to.

"Those that are prepared can turn severe weather into an opportunity for shareholders and stakeholders, while others will likely shut down and can potentially have trouble restarting and re-establishing market share," said Hart Brown, Vice President, Organizational Resilience, Risk Services, HUB International Limited.

Here are Brown's best practices and crisis management tips for any business, regardless of location or severe weather threat.

  1. Understand your risks. Each company will have their own risks based on their line of business. Questions to ask might include: What are the critical things you need to maintain operation if severe weather should hit? If you lose heat, what systems will be impacted? You'll need to have a plan in place to compensate for an infrastructure or facility disruption.
  2. Update emergency plans. In order to maintain safety during an emergency, make sure you're receiving notifications from the local municipality, regional and national weather services. Last year's ice storm in Atlanta took everyone by surprise, and therefore companies didn't release their employees early enough. Watch road and school closures and make decisions accordingly to ensure your employees are safe. Similarly, make sure you've discussed potential emergency scenarios with your staff and they have a plan in hand. In the event that employees have to work from home, do they have what they need to be productive?
  3. Prepare for power outages. Make sure you've communicated with your employees or staff in advance of a potential power outage. Consider what equipment needs to be turned off, especially sensitive equipment that needs to be protected. Post shutdown and restart procedures near the equipment and list in a specific order to make sure everything is functioning optimally during and after an outage.US Bus Severe Weather call out
  4. Communicate in advance of severe weather with suppliers/vendors. If you receive multiple vendor drop-offs of inventory per week, inquire about their plan should severe weather impact their ability to deliver product. If they don't have a pre-established plan, consider how you can maintain your supply and materials in the event of a weather disruption. This applies to all facilities within a single company as well as vendors in your supply chain.
  5. Communicate in advance with your broker. Talk to your broker, understand your risk and what your policy covers in terms of business interruption. In addition, review any potential liabilities that could arise from severe weather - including property issues, an increase in workers' compensation claims or even a customer slipping on the ice on your premises.  
  6. Communicate with your customer base. In order to minimize the loss of disruption and potential future business, communicate with your customers in advance of a severe weather event. Let them know your hours of operation and if you have to close down, when you'll be back in business. Open communication will help maintain your existing customer base even in the event of a business closure.
  7. Support back up power. Make sure you have what you need to maintain equipment you can't shut down. For example, if you need to maintain a constant temperature in a warehouse or refrigerator space, make sure you have additional heaters or dedicated cooling units on back-up power in advance of a potential severe weather event.
  8. IT infrastructure back up. Because most of today's companies need to maintain their data 24/7/365, they need a concrete plan for IT infrastructure back up. Depending on how critical the data is, each company will have a different answer. Some will have physical back-up data sites outside of the regional area, while others will have cloud-based redundancy, which may provide the most protection while also allowing employees to access data remotely.

Companies that have taken the necessary steps to prepare for severe weather related set backs, closures, potential liabilities and exposures should not only survive the winter months, but can potentially even thrive by turning weather events into an opportunity to maintain or re-establish market share and meet the needs of their employees, and most importantly, their current and future customers.

Contact an advisor to learn more.

[1] The Property Claim Services (PCS) unit of ISO, a Verisk Analytics company.

[2] Insurance Information Institute