Q: How should I prepare my small business for hurricane season?
A: First, consult with your insurance agent to make sure you have the appropriate coverages and limits before the need arises. Ask the agent: Do I have hurricane coverage for my property? Do I have enough? Is my property insured to its full value?
If you lease space, your biggest exposure may be lost income and increased expenses caused by property damage. If you fall in this category, ask your agent if you have enough business-income insurance to sustain you through a long reconstruction. Remember, if Hawaii is hit by a hurricane, thousands of homes and commercial buildings could be damaged. Rebuilding could take more than a year, depending on the availability of construction materials and labor. Compare this to the three to six months of business-income insurance coverage that many companies purchase to recover from a fire.
There are other ways to minimize the property damage and business interruption. A hurricane-preparedness and business-continuity plan will help you preserve life and property, and reopen your doors for business sooner. Here are tips to consider:
• Have a preparedness plan for your home and family. You can’t fully focus on your business’ recovery if you are worried about your family.
• Develop an emergency-procedures manual for your operational exposures. For example, plan to have food and water on hand if your premises will be occupied during and after an emergency.
• If you have employees, identify key staff (with back-ups) to help prepare for and respond to the hurricane. Be clear on expectations and communicate responsibilities before the start of each hurricane season.
• Establish an employee emergency-alert tree and regularly update contact information.
• Create a plan to deal with interrupted water and electricity. You may want to consider having a portable generator, alternative fuel sources and a supply of flashlights, lanterns, radios and other equipment that can run without electricity.
• Maintain an updated inventory of your business property, including purchase receipts, appraisals and photos. This information will be useful if you must make an insurance claim.
• Be prepared to properly secure and protect your facility and equipment from wind, water and theft.
• Create a system to protect important documents, such as accounts receivables, tax records and personnel papers.
• Back up computer data regularly, preferably on off-site servers.
Assistant VP – Enterprise Risk Management
First Insurance Co. of Hawaii