When your manufacturing facility or other business property is damaged in a hurricane, the financial consequences for your business can be devastating. While you may have business interruption coverage to ease the financial losses associated with your inability to operate your business, preparatory steps to safeguard your company against potential losses during a hurricane can dictate the success or failure of your business. The United States Department of Labor reports that forty percent of all companies never reopen after being forced to close during a disaster. Among businesses that reopen, 25 percent of these businesses fail within two years after a disaster like a hurricane. In this two-part blog post, Florida insurance claims attorney J.P. Gonzalez has provided suggestions for protecting your business in the event of a hurricane.
Steps to Mitigate Hurricane Damage to your Business Based on Location
Mitigation When Selecting a Location: There are many factors that contribute to the selection of a location for a business, including land cost, zoning laws, proximity to clients, convenient supply chains and more. However, many people do not give much thought to potential hurricane risk when locating a business or constructing a facility. If you are opening a new location or relocating your business, you should research the Federal Emergency Management Agency (FEMA) criteria to determine whether the location is within a floodplain. Flooding is one of the most common forms of damage during a hurricane, so you might avert interruption of your business if you locate in an area that is less vulnerable to flooding. If your business is dependent on proximity to water, you should explore construction specifications that will mitigate the risk of flooding.
Mitigation of Damage to an Existing Business Facility: While the above advice is helpful for those opening a new branch/facility or relocating a plant, this suggestion offers little benefit for existing facilities. However, facilities can be retrofitted to reduce hurricane damage. While such adaptive strategies can be expensive, the cost of having your business shutdown for extended periods can do far more financial damage. A relatively affordable measure for preventing wind damage is to equip your business facility with hurricane shutters. The cost of this precaution can be relatively modest when compared to the cost of rebuilding/repairing the facility and prolonged business interruption.
Creating and Implementing a Business Disaster Plan
When small business owners engage in pre-hurricane planning, these precautions can save enormous amounts by preventing structural damage to the facility, displacement of employees, business interruption losses and damage to inventory and equipment. Business owners who create a business disaster plan can reduce these potential losses. Steps in this process include:
- Reviewing insurance coverage to ensure the company’s policy adequately protects against appropriate perils, provides sufficient coverage in terms of policy limits and includes sufficient business interruption coverage
- Create written policies and procedures for employees to follow to protect business property
- Ensure employees are adequately prepared to implement hurricane procedures
- Identify and stock up on appropriate emergency supplies and equipment
- Develop protocols for safeguarding computers and electronic data
- Identify an alternate location from which business operations can be conducted
- Secure alternate supply lines for raw materials and/or inventory
If you have questions about your business insurance claim, experienced Florida insurance attorney J.P. Gonzalez-Sirgo can analyze your situation and advise you of your options. Mr. Gonzalez-Sirgo handles disputed claims in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.