Severe weather, such as winter storms, hurricanes and floods, can cause devastating and costly damage to any business. In fact, on a global level, extreme weather events are projected to cost the global economy $700 billion annually by 2030, according to the Climate Vulnerability Monitor.
To best protect themselves, most businesses, both large and small, prepare themselves with insurance policies that account for their unique needs and exposures. However, these same businesses often take a “set it and forget it” approach to severe weather coverage, which can leave them out in the cold when disaster strikes.
To minimize a storm’s financial impact and to maximize insurance recovery, businesses must remember to do the following:
- Review your policies. Long before a severe weather event has the opportunity to ruin a business, you should take the time to review, understand and retool your policies. When doing this, it’s important to remember that different policies may respond to disasters in a variety of ways, so it’s important to do the research upfront to ensure that you are prepared. In addition, remember that some policies may feature exclusions that void coverage in various scenarios. Reviewing these coverage features with your insurance broker will ensure that you know what type of protection to expect following a disaster.
- Have a contingency plan. Once your insurance coverage is in place, you’ll want to prepare for the worst and have a contingency plan for your business. These plans should include insurance policy files, inventories of all owned property, a list of suppliers and contact information of key stakeholders. It is also a good idea to have a disaster response team in place. This team should include company leadership, risk management personnel, insurance coverage counsel, brokers and forensic accounting experts.
- Be proactive. Once you are aware that a storm is imminent, you can mitigate potential damages by securing material assets. This can involve things like moving materials and property to safe locations, securing your facilities and more.
- Notify your broker and insurance company. If your business is impacted by severe weather, it’s critical to notify your insurance broker and company immediately, as this will ensure that your coverage will kick in. This typically involves providing specific details regarding the loss. Be sure to document any losses as well to ensure you are getting the most for any damages.
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