Extreme weather is often in the news, and too often, it shows up on a business’s doorstep – and on the roof, the floors, the desks...and everywhere else. The average business may not encounter every type of bad weather, but some companies are likely at risk of experiencing some sort of extreme version of what Mother Nature can dish out.
In fact, insurance claims from natural disasters are on the rise, reaching $120 billion in the United States in 2022, according to data compiled by Munich Re, a global provider of reinsurance, primary insurance and insurance-related risk solutions.
So aside from investing in a few more umbrellas, what should a business do to prepare for extreme weather?
How to Put Together a Natural Disaster Plan
If you really want to be prepared, plan that your company being hit by extreme weather is a matter of when, not if. The more prepared you are, the more likely your business will bounce back from an extreme weather event – or work through it unscathed.
There’s a lot to creating an extreme weather plan and developing one can seem overwhelming. But your plan doesn't need to be created overnight. It can be an ongoing project, and if a natural disaster struck when your plan was 37% finished, you’d be 37% better off than having no plan. Besides, planning for the worst will help you and your staff become more familiar with the inner workings of your company – and it may help your business run better even if you never do encounter extreme weather.
In any case, if you’re developing a natural disaster action plan, it may be wise to think about the following – and consult an expert in business and risk planning.
1. Scrutinize your insurance.
If you want your business to be as extreme-weather-proofed as possible, insurance is your last line of defense. Your business might be as prepared as can be for an oncoming natural disaster, but if the weather gets the best of you, at least somebody else can pay for the damages.
Tyler Pattat is a franchisee of ServiceMaster Restore, a commercial and residential restoration company with locations in Memphis and Jackson, Tennessee. Pattat says that insurance should be at the top of everybody’s minds. He had a client several years ago experience a natural disaster and suffer damage to 16 buildings on their property. There was no emergency plan in plan – but worse, the client didn’t have much of a relationship with their own insurance agency, which meant that figuring out how much the insurer would pay dragged out far longer than it should have.
“It should have taken 12 months to work through this, but their carrier and relationships dragged it out over 16 months and devastated the customer,” Pattat says.
He also recalls another client that was insured but the deductible was a million dollars. The client apparently didn’t realize that – and it almost broke the company.
“If energy or fuel backups such as a diesel generator are needed, regularly test your system and establish proper contracts with fuel suppliers for emergency fuel deliveries.” —Rick Krapes, insurance agent, COUNTRY Financial
2. Study your liabilities.
If something really bad happened, what would your strengths and weaknesses be? For instance, if your business is spread across the country or a region, a strength may be that a tornado or hurricane could only destroy some of your locations. On the other hand, that could be a risk, too. If your business is spread out, arguably there’s more of your business that is susceptible to damage by extreme weather.
“We recently spoke to a supply chain manager of a major hospital organization that has high liability across the country. The manager was concerned about multiple regions and shared examples of storms that affected each area where a business was located,” Pattat says. “Ultimately, the manager decided that they needed a national response plan to help in any time of need.”
And keep in mind that studying your business’s liabilities is a smart move, even if your weather remains pleasant and safe year-round. If your company isn’t hit by a flood or forest fire, it might, for instance, be the victim of a cyber or malware attack. You could start off with a plan to protect your company from extreme weather but end up coming up with ideas that help you a completely different extreme situation.
3. Inspect your buildings.
Rick Krapes is a COUNTRY Financial insurance agent, based in Kansas City, Kansas, and he says that “just like your annual health exam, routine inspections are important.” When looking at your property, try to get a sense of whether it can withstand bad weather. The idea here, Krapes says, is to “complete any maintenance needed to ensure it can stand up to severe weather, before bad weather strikes.” And it isn’t as if this is wasted time if the weather cooperates. If you do find some problematic issues with your building or property, you’d want to fix it, anyway.
4. Create a message tree.
Krapes suggests creating some sort of message system, where you have a way people can reach each other if, say, the internet and power is out. He also suggests having emergency contact information on hand, so if something were to happen to an employee, you can reach their loved ones.
5. Create the actual plan.
That is, what do you do if there's an earthquake or a blizzard that shuts down your company? For some small businesses, that may not be that difficult; maybe you close up shop. But what if your company can’t do that, or do that easily? How will you keep your employees and customers safe if they’re in the path of danger? What’s the plan? Whatever your answers are, add them into your plan.
You’ll also want to think about where critical information to run your business is stored – in the cloud, for instance, where a storm can’t get to it – or in a brick and mortar establishment that can be flooded. And you may need to readjust if you realize that the destruction from a tornado could completely destroy your business.
6. Test and continually monitor your plan.
In other words, if you think have a plan to combat extreme weather, you’ll need to see if it works.
“If energy or fuel backups such as a diesel generator are needed, regularly test your system and establish proper contracts with fuel suppliers for emergency fuel deliveries,” Krapes says. “Can you imagine relying on a back-up, only to find out it’s not functioning properly when you need it most?”
That is, this isn’t something you can set up and forget about.
“Re-inspect and replenish emergency supplies,” Krapes says. “First aid supplies are often used throughout the year for non-emergency situations. To make sure you’re prepared, regularly check your emergency supply inventory.” He also suggests testing any life safety equipment as well as flashlights, radios., and batteries.
You’ll also want to regularly or occasionally conduct simulations and drills. “For both your business continuity and emergency preparedness plans, even if it makes the office moan,” Krapes says.
The Bottom Line
You'll never think of everything that should be in your plan, and if something goes wrong, you and your employees will probably not do everything right. But if you have an extreme weather blueprint that you can quickly adopt, you're in better shape than a company without a plan. Planning for the worst often helps everything to work out for the best.
