Preparing your small business for hurricane season
As a small business owner, you juggle a lot. From finding new customers to hiring reliable help to the rising costs of goods, there is a lot to think about each day. While no small business owner wants additional “to-dos” on their list, we think you’ll agree that being proactive often has more benefits than being reactive—especially in relation to emergencies.
With hurricane season falling from June to November, understanding how to protect your business in the event one occurs is important. Whether you have inventory to protect or a storefront to secure, taking steps now can save you significant time, money, and stress later.
By investing a little time in hurricane preparation, you can help safeguard your business against the unpredictability of hurricane season and ensure a quicker recovery if disaster strikes!
How hurricanes can affect small businesses
Small businesses are the backbone of the economy, with a whopping 99.9% being categorized as such, according to the Small Business Association. Claiming 500 or fewer employees, small businesses not only encourage economic growth but can help to create new jobs.
While small businesses can often be nimble in ways their larger counterpoints cannot, they are also more vulnerable in several ways. This includes weather-related risks, such as hurricanes, which can not only cause property damage but also interrupt general business operations like customer service.
Hurricanes occur mainly in coastal regions and are characterized by strong winds, heavy rain, storm surges, and flooding. They have the potential to cause widespread devastation in a matter of hours or even days. In fact, according to the National Oceanic and Atmospheric Administration (NOAA), hurricanes caused over $50 billion in damages in 2020 alone.
As you likely know, even short interruptions in a small business’s day caused by a hurricane can be incredibly damaging. So how can you make sure your business is prepared?
Understanding your small business insurance policy
For small businesses located in hurricane-prone areas, having adequate insurance coverage is incredibly important. Knowing what your policy may cover that is hurricane-related can provide a lot of peace of mind throughout the season.
If you don’t already have a small business insurance policy that includes hurricane-related damage, and you live in a coastal region, it’s time to check out your options. If you do already have a policy in place, schedule an annual discussion with your insurance agent about what your policy covers. Here are some questions to help you guide the conversation and protect your business.
- What is covered by my current policy in the event of a hurricane? Knowing this can help you identify gaps in coverage that need addressing, such as a new physical location or an additional warehouse storage unit.
- Are there exclusions or limitations in my insurance policy? Understanding what is covered is as important as understanding what is not covered. Standard exclusions might be things like flood damage, wind damage, business interruption coverage, and even coverage caps.
- What is my deductible for hurricane-related claims? Knowing your deductible will help you plan financially for out-of-pocket expenses if you need to file a claim. Many times, insurance for properties near the coast will contain a windstorm or hail percentage deductible, which is typically calculated as a percent of your coverage limit.
- How is the value of my property and inventory determined for a claim? Understanding the valuation method of your insurance company can affect the compensation you receive for damaged property or inventory.
- Are there any specific steps I need to take before a hurricane to ensure my coverage is valid? Some policies may require that you put into place preventive measures such as boarding up windows or having a disaster preparedness plan.
- Does my policy include extra expenses coverage for costs associated with temporary relocation or additional operating costs post-hurricane? This is coverage that can help you with the additional costs accrued from relocating or running your business during repairs.
- Are there any waiting periods for certain types of coverage to become effective? This is typical for business income coverage; knowing this can help you plan better and avoid gaps in coverage.
- Are there any discounts or incentives for taking preventive measures against hurricane damage? Some small business insurance providers may offer discounts for those who mitigate hurricane risks, such as installing storm shutters or reinforcing their structures.
- What support and resources does the insurance company provide during a hurricane? Some small business insurance companies may help with temporary relocation or expedited claims processing. Understanding these perks and how they work is a good thing to know in emergency preparedness.
Developing a hurricane emergency plan
You hope that a hurricane won’t affect your small business. But beyond understanding and updating your small business insurance policy, having an emergency response plan may help keep you and your business protected.
If you’ve never created something like this before, don’t worry! Follow the steps below to set up an emergency preparedness plan for your business.
- Identify potential hazards: What hazards could occur for your small business during a hurricane? This includes assessing your area’s vulnerability to things like storms and flooding. If you work near the coast, you likely have different vulnerabilities than if you live further inland. Hazards may also vary based on your state, so keep that in mind as well.
- Determine priorities: When a hurricane is imminent, you usually get a few days’ notice. Still, you have a very finite amount of time to act—so what is most important in terms of protecting your business? Securing important documents, moving inventory, and preparing your property are all examples of potential priorities. Consider what you might be able to work on before a potential hurricane to give lower priorities a chance of achievement. For instance, you could create a cloud storage of all your essential documents anytime.
- Establish communication methods: Make sure you have established various methods of communication, such as phone numbers, emails, group chats, etc., for everyone involved so everyone can stay informed and connected. Don’t forget to store information for things like property managers, insurance agencies, and even local utility companies in a place where you can easily find them.
- Create an evacuation plan: If you have a physical storefront or warehouse in an area prone to hurricanes or severe weather events, take time to identify evacuation routes.
- Designate responsibilities: Having designated roles for employees will help ensure everything runs smoothly during emergencies. Assign specific tasks such as turning off utilities or packing inventory.
Once you’ve developed an emergency plan, review it regularly. Keep things like important numbers and assigned responsibilities updated.
What to do after a hurricane
Now that you’ve prepared your small business for a hurricane, let’s talk about what you should do if a hurricane affects your small business.
First, contact your insurance company as soon as possible. They can provide guidance on the next steps you should take and advise you on how to file a claim. Keep all receipts for expenses related to repairs or clean-up and be sure to document all communication with your insurance company.
If your property is safe to visit, you’ll also want to conduct an initial damage assessment. Document with photos or videos of the inside and outside of your property, including any damaged products, goods, or materials.
If you have a storefront or warehouse, check all windows and doors for cracks, broken seals, or shattered glass. Inspect the roof, if possible, and the foundation of your building for any potential damage caused by water or debris.
From there, take steps to help prevent further losses from occurring to your small business. This might include covering broken windows or damaged roofs with tarps or moving any salvageable inventory or property.
Throughout the process, do your best to keep communication channels open with your insurance provider. Be prompt in responding to any requests for information or documentation, and make sure you understand the timeline of your claim.
Final thoughts
No small business owner wants to face hurricane damage. However, understanding your small business insurance policy and having an emergency preparedness plan can help minimize its impact and offer a quicker recovery.
Being prepared can not only provide you peace of mind, but it will also help you focus on running your business throughout hurricane season rather than worrying about the potential implications of every storm.
Thinking about hurricane insurance for your small business? biBerk does not have coastal restrictions when it comes to writing policies—connect with us to learn more!