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Severe Weather Season is Coming. Is Your Business Ready?

Hopefully, severe winter storms are winding down for the season. This past winter has certainly been tough on U.S. businesses with the bitter cold brought on by the Polar Vortex (not to mention costing the economy about $5 billion.)1 And now severe thunderstorm season is just beginning, followed by hurricane season, which means we’ll have a different kind of storm season to think about.

The extreme winds generated by thunderstorms and hurricanes can cause devastating damage to business structures but one of the greatest threats comes from flooding. According to the U.S. Geological Survey, during the 20th century, floods were the number-one natural disaster in the United States in terms of the number of lives lost and property damage.2 

Extended wet periods can saturate the soil and lead to rising floodwaters, but the intensity of rainfall during a thunderstorm can trigger flash flooding within several seconds to several hours, with little to no warning. Hurricanes are especially dangerous because they can create storm-surge flooding as winds push water onto otherwise dry land. In fact, water can quickly pile up to depths greater than 20 feet.

From property damage to supply chain disruptions, the impact of flooding is often felt far and wide. Let’s look at the impact of severe weather on businesses and what you can do to prepare and recover quickly from damages and area-wide events.

Build High if You Can...But Stay Prepared Regardless
Proximity to water is the biggest risk factor for flooding, according to the report, Reduce Flood Damage to Businesses, published by the Insurance Institute for Business & Home Safety (IBHS).3 The best way to deal with a flood is to stay out of its way. For example, elevation is typically your friend and you should avoid building a new facility on a floodplain if possible. Flood maps are available from the Federal Emergency Management Agency (FEMA) that identify 100-year and 500-year flood zones throughout the United States to help when locating a new facility.

But many businesses don’t have much of a choice in the matter given limited construction budgets for more expensive locations or the availability of raw land to construct new buildings in many markets. And still, high elevation may not protect you fully from the impacts of a flood. The IBHS report notes that approximately 25 percent of all flood damages occur in relatively low risk areas that are not located in mapped flood zones.

Businesses may try to flood-proof their buildings by covering doors and windows with plastic sheets, plywood shields, etc., especially if given advance notice of the approach of a hurricane. But the effectiveness of these measures is often limited due to the extreme pressure applied to exterior walls during a flood. Basements are particularly vulnerable to flooding, not just because water can flow into them but also because they will be under increased hydrostatic pressure exerted by the surrounding saturated ground.

Consider Your Place in the Supply Chain
Unfortunately, severe thunderstorms and hurricanes are not isolated events. They usually impact large areas and, for a business, they can impact the entire supply chain. A study called Flood risks and impacts: A case study of Thailand’s floods in 2011 and research questions for supply chain decision making4 noted that because of Thailand’s outsized role in global manufacturing, the severe floods it experienced in 2011 reduced global industrial production by 2.5 percent. Electronics manufacturers and auto companies were particularly hard hit. Damages from the flood cost the world’s top three non-life insurance companies $5.3 billion in claims.

What You can do to Prepare for Severe Flooding
You can’t control the weather but you can ensure that your business is prepared to respond to flooding this year. In addition, having a restoration partner that you trust on call can prove to be one of the most critical elements of your disaster planning.

You can also work with Interstate on a Pre-Loss Risk Assessment. Risk managers need to know what assets are at risk and what safety concerns need to be addressed. The beauty of a risk assessment is that it helps you understand what is pressing, as well as helps establish your top priorities when preparing and dealing with the aftermath of a disaster.

Business continuity planning can help prepare you to maintain your position in the global supply chain while the waters recede. Companies with a plan can minimize loss of market share, protect their reputation and brand value and reduce their overall exposure from lost business opportunities. Utilizing an Emergency Response Management approach, business continuity planning takes into consideration the specific threats to your business from flooding, and other disasters, and how they impact every area of your operations. And once the plan is finalized, you’ll receive actionable steps to test and maintain the plan so you’re always prepared for the severe weather seasons ahead.

Remember, flooding can cause as much damage to structures as the high winds of severe thunderstorms and hurricanes...or more. But taking the time to prepare for these seasonal events now can help you mitigate, if not eliminate these potential threats to your business.

Sources:
1 AccuWeather, Polar vortex’s bitter cold could cost US economy $5 billion, though the worst may be over, January 31, 2019.
2 USGS, “Significant Floods in the United States During the 20th Century—USGS Measures a Century of Floods,” Charles A. Perry.
3 Insurance Institute for Business & Home Safety, Reduce Flood Damage to Businesses.
4 International Journal of Disaster Risk Reduction, Flood risks and impacts: A case study of Thailand’s floods in 2011 and research questions for supply chain decision making, Haraguchi, Masahiko and Lall, Upmanu, December 2015.

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