Hurricanes and Tropical Storms: Response and Recovery

The heavy rain, wind, and flooding that hurricanes and tropical storms often bring can damage your property and that of key customers and suppliers, disrupt transportation networks, restrict your ability to access your premises, and lead to power outages and other service interruptions. For businesses, recovery and restoration in the aftermath of a major storm can take time and consume significant resources. But acting quickly can help limit the effects on organizations and people and enable businesses to resume normal operations sooner.

During the recovery period, organizations should focus on the following:

Crisis Management and Communications

Implement your crisis management plan quickly and appoint your crisis management teams to coordinate your response. This will allow you to understand the potential impacts of a storm on your people, operations, and property. It can also help you make policy and strategy decisions to best manage those impacts, including whether to allow employees to take paid time off and/or shift operations to locations unaffected by the storm.

Protecting Employees and Physical Assets

Make it your priority to account for all employees and protect property and assets from further damage. Be ready to provide frequent updates on employee and property recovery efforts to senior executives, response teams, and other stakeholders.

If access to your property is restricted in whole or in part as a result of a storm, make sure it is safe and secure before allowing widespread access. Inspect the property to identify and address potential hazards from the storm — including roof or wall collapses, damaged electrical wires, gas leaks, and broken perimeter fencing. Once the property is ready to be safely accessed more widely, take steps to prevent further damage in the storm’s aftermath.                             

Humanitarian Assistance

Be prepared to aid employees and their families during and after the storm. Consider providing physical, social, emotional, and financial help to your people. Aside from professional counseling and support services, you may also wish to offer personalized assistance. An employee claims assistance program can complement your existing humanitarian assistance program, with advisors providing guidance on homeowners, renters, flood, and personal auto insurance policies and claims.

Business Continuity

Once safety issues have been addressed, turn your attention to keeping your business running. Your plans should cover the management and logistical process for continuing or resuming and recovering interrupted critical business functions. Coordinate support between corporate headquarters and affected locations. Pay specific attention to ensuring networks, applications, and data are available since this will help support business continuity. Also consider allowing employees to work remotely and bringing people back in prioritized shifts, as safety and security of affected locations allow.

Insurance Coverage

Although every event is different, hurricanes and tropical storms often bring similar questions about whether and how property, business interruption, environmental, and other forms of coverage will apply to specific storm effects.

In property policies, for example, pay close attention to definitions, key terms, and coverage triggers related to:

• Wind-driven water (also called “storm surge”): Some policies consider storm surge under the definition of flood, while others consider it under named windstorm.
• Ingress/egress and civil authority: When governments shut down particular areas or prohibit access to specific locations in the aftermath of a storm, these two extensions will often come into play. 
• Service interruption: Any protection for power outages and other interruptions that are afforded by property policies will typically only apply after a 24- to 48-hour waiting period, and only in the event of damage to a utility’s property. Some policies will also only respond if damage occurs within a specified distance from an insured property.

It’s crucial to understand the specific wording in your policies and whether any extensions or exclusions will apply in specific circumstances. Insurers’ interpretation of such language will also be critical.

Claims Management

Some elements of property insurance coverage will require policyholders to provide specific documentation of loss. For example, service interruption claims must generally be accompanied by a precise timeline of an interruption, evidence of notice to a utility, and details about the specific nature of an interruption, including the type of equipment damaged, the cause, and its distance from a policyholder’s insured premises. Visual evidence, such as the real-time imagery and video that can now be captured via drones, aerial vehicles, and satellites and meticulously analyzed, can help property owners document their loss especially where properties are inaccessible or otherwise compromised and expedite their claims.

To learn more about how you can prepare for, respond to, and recovery from storms, contact your Marsh representative or visit Marsh’s Hurricane Resource Center.