Getting Organizational Hurricane Preparation on Track: 5 Essentials

When a large business or organization has a location or multiple locations in the path of a hurricane there is a lot at stake. Employee and guest safety. The ability to make sales or support customers. Employee livelihoods. And much more. That’s why it’s so important for large organizations to have an up-to-date disaster response plan (DRP) in place. Without one, an already chaotic situation becomes even more confusing and challenging. Yet plenty of large organizations have incomplete or out-of-date DRPs. And that means hurricane recovery efforts can easily go off the rails and end up taking longer while costing hundreds-of-thousands or millions more than necessary.

Who’s Responsible…?
In large companies and organizations, seemingly simple questions such as “who’s in charge?” or “who will be paying recovery costs?” can often be difficult to answer. Take the example of a furniture retailer that experienced hurricane-related flooding in a rented warehouse full of inventory. The company didn’t have a DRP in place and the building manager wasn’t clear on whose insurance would cover the damages. Although he did call for help with mitigating the loss, he later found out that according to the lease agreement his company was not responsible for the flooding damages and the company’s insurance provider denied the claim. Unfortunately, the landlord also stalled accepting liability so the furniture retailer had to file a lawsuit. As the parties fought about who should be responsible for paying the bills, the retailer lost more inventory and was potentially on the hook for paying several hundred thousand dollars in mitigation services costs out of pocket.

While that’s a somewhat complicated situation, even seemingly small considerations can have a big impact on a location. For example, simply failing to retain a generator at a location where power is mission critical. The fact is that the generators used for restoring power are often scarce after a hurricane, so in any situation where power restoration is urgent it’s critical to line up resources ahead of time.

Getting Ahead of Common Challenges
The scope of preparation and recovery complexity for large organizations in hurricane zones can vary widely depending on the number and size of locations and type of business or organization. Generally speaking, however, there are several critical things to be aware of when it comes to effective recovery planning for locations in hurricane zones.

1. Make sure the organization is aligned on recovery responsibilities and priorities
Assign a point person to location who is responsible for overseeing preparation and recovery efforts and coordinating with the corporate office. It’s important that the point person understands insurance-related responsibilities along with who to contact for recovery support. It’s equally important to regularly update point person and contact lists as people change positions or move on to other jobs.

2. Line up essential resources ahead of time
When a hurricane is approaching an area, critical resources quickly become scarce. For example, hardware stores sell out of materials for securing buildings and restoration providers see a huge spike in demand for things like generators. Each location or building should have a plan for securing critical resources in time. They should also talk to restoration providers about pricing and reservation options for mission critical resources, such as generators for power, well before a storm is on the horizon.

3. Understand lease agreements and who is responsible for what
To ensure the maximum payout from insurance for recovery efforts, point people in each location should understand which insurance policies apply to recovery efforts along with mitigation requirements associated with those policies.

4. Build a relationship with a disaster restoration provider
Depending on the intensity of a hurricane and the amount of damage it causes in a region, recovery resources could be spread thin. By building a partnership with a restoration provider your company can ensure that it receives a prioritized response rather than being added to a long list of panicked post-disaster callers.

5. Align key recovery resources as much as possible, including your insurance broker and adjuster, and recovery vendor
Just because a company has insurance doesn’t mean it will take care of all of the post hurricane recovery related costs. At the end of the day, your company is responsible for its property and paying its contractors. That means it’s a good idea to understand what insurance covers and negotiate pricing on key services up front with your recovery vendor and insurance representatives. Taking this step eliminates recovery “sticker shock” and helps ensure more timely and full payments for recovery costs.

An Ongoing Effort
In large businesses and organizations, people are always coming and going and circumstances in different locations can change quickly. That means that hurricane response and disaster recovery planning must be an ongoing effort. If your organization has fallen behind in its efforts, the five steps above are a good place to start to get things back on track. Ultimately, however, you should make sure you have a comprehensive DRP in place and regularly revisit it along with these steps.  

Thanks to Kristy Kleto, National Account Executive, for sharing her expertise in this area!