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Mitigation

Business strategy for 2017: Plan for 3-day waiting period for business interruption insurance

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During hurricane season, emergency preparedness professionals suggest that people have enough food and water around to last three days. Business owners need to plan for three days on their own, too. But it’s not about food and water; it’s about cash reserves.

One important coverage for a business owner to consider is business interruption insurance. It is triggered due to a slowdown or suspension of a business’s operations due to a covered peril, such as a fire or hurricane. And, it has limitations that must be recognized, with the most important being the typical waiting period of 72 hours before coverage kicks in.

Why is there a waiting period? It exists to lower the cost of insurance coverage and to encourage the business to take necessary, immediate steps to minimize business losses. There are ways to reduce or remove that waiting period, at an additional cost. However, knowing the coverage does not go into effect the moment the lights go out is the first step to planning for it. Many small businesses do not do that. After every natural disaster, they learn about it too late.

Business owners should find insurance coverage that matches their business size, that suits their particular needs, and they must remain confident in their understanding of how a commercial insurance policy works. Now is the time for small-business owners to take a hard look at their risks and make a plan for 2017.

According to the Small Business Administration, 99.7% of all businesses are small. If that sounds surprising, understand the SBA defines “small” as a business with fewer than 500 employees. About 80% of businesses are VERY small, as in under 10 employees. Thinking big is a success strategy as necessary for the sole proprietor as it is for the CEO of a giant corporation. It includes thinking about how to make it through the first 3 days after disaster strikes. With a well-conceived plan, the disaster itself may certainly ruin your day (or month), but it won’t ruin your business.

An inside view of flood damage

You’ve probably seen numerous dramatic photos of the recent flooding in Texas. Cars underwater, buckled roads, smashed houses. The photo below is what it looks like when the water recedes and a home doesn’t wash away. If you ignore the piles of soggy carpet, limp drywall and damp possessions awaiting the trash man at the curb, the homes look fine on the outside. On the inside, it’s a mess.

I was in Houston last week, helping share information on disaster recovery. In a flooded neighborhood along one of the bayous, home after home was deep into the drying out process. It’s a shared experience none of them wanted, and several of them had been through it before. Tropical Storm Allison affected the same neighborhood in 2001. Interestingly, I saw only one home that was elevated more than a few inches. There likely were more, but this one stood out because it stood UP high and dry above the others, at least 3 feet.

Houston homeowners who had flood damage are learning about an ordinance that requires them to elevate their homes if their damage exceeds 50 percent of the structure’s market value. This is something that Floridians need to think about, too. Do you have enough insurance to rebuild after disaster, taking your local ordinances into account? Don’t wonder about it. Be sure! Call your insurance professional to ask about your law and ordinance coverage.

Do seasonal hurricane forecasts matter? Purpose is preparedness

The pre-hurricane season forecast was released today, and it “suggests” the 2015 hurricane season will be well-below average. I used the word “suggests” because the researchers themselves say this forecast is about probability; it cannot be an exact prediction because atmospheric conditions change like (um) the weather. And, armed with information about what is likely, most people will do…nothing. Too bad.

Season of preparedness starts early; notes from the Hurricane Conference

Hundreds of people were thinking about bad weather this week at the National Hurricane Conference in Orlando. This annual event is a forum for education and training in hurricane preparedness.

Make mitigation happen while sun shines

Too many people only get things done in a last-minute panic. Don’t be that guy—or gal. “Make hay while the sun shines” is an old saying that makes perpetual sense. The sun is shining, there are no imminent threats of severe weather, and that makes this the perfect time to prepare for when skies are gray and winds whip up. To prove the point of “making hay” in the sunshine, the Florida Division of Emergency Management designated this as Severe Weather Awareness Week.

Cold weather hits Florida; protect your property

A cold snap is on the way for Florida. Many of us may have forgotten what that feels like. Last winter, it never got cold enough in my part of the state to freeze back the tropical plants, those that typically wither at a brush with coolness. They might succumb this week. Temperatures are expected to dip into the 30s in many parts of the state.