Thursday, June 3, 2010

Prepared for the Season?

June marks the return of an annual nemesis, the Atlantic Hurricane Season. In Florida and most parts of the Southeast, local news media are advising us to prepare our homes and families for a possible Hurricane. This is also the time for corporations and risk managers to prepare for a possible hurricane. Here are a few insurance specific areas to think about before a hurricane forecast is issued:
  • Re-visit your limits. Property underwriters suspend activity anytime a hurricane is forecasted for your general area. So it does no good to call your broker a day or two before a hurricane is coming to raise your limits, the time is now. Review your real property and business property limits for accuracy. Another area of concern is business interruption limits. This is a great time to make sure the limits on the policy are aligned with the current budget/revenues (more below).
  • Buy Flood. Flood is fairly inexpensive and easy to obtain. Most property policies exclude flood unless a sublimit has been negotiated. It also has a thirty day waiting period before the coverage goes into effect, so it is critical to get coverage now and not when the meteorologists are tracking a disturbance coming off the Horne of Africa.
  • Wind/Hail deductibles. Be sure to review the deductible language in your insurance policy. Many insureds do not understand most deductibles apply to the insured values of a location and not the amount of the loss at a location.
  • Civil Authority. Review the civil authority coverage in your policy. Do you know the waiting period? Evacuations are common for areas not affected by the storm causing businesses to cease operations. If you are located in an area commonly evacuated, there may be alternative forms of coverage to minimize loss.
  • Contingency planning. Do you know who you will be calling to help with repairs and loss mitigation? This is the time to talk with property restoration companies to determine who can do the work. You can also enter into an agreement where they will come to you first and not when they can “fit you in the schedule”.
  • Business continuity. Does the operations team have a plan to continue operations after a storm? In the event a storm affects a location, you may not have access to the area for a week. Continuity plans should address all CAT exposed locations as well as a combination of one or more affected locations.
 These are a few areas to discuss with your insurance professional, as these are easy things to take care of prior to a storm bearing down on the coast.

For more information, contact
Chip Storm: 813 865-0528  |

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