"The federal government was shut down for two consecutive days. The Office of Personnel Management estimated that for executive branch offices the cost of the shutdown is between $63 million and $67 million a day."
CNN.com, 9/19/03

Hurricane Isabel highlighted the need for businesses to manage not only weather-related risks, which will continue long after the storm passes, but also a portfolio of risks that have the potential to impact a company's bottom line. Isabel also illustrated that there is no substitute for information, knowledge, and preparation in managing weather-related and other risks.

As the storm passes and normal business operations resume, executives should be asking several questions to gauge their organizations' ability to handle insurance claims if their operations sustained damage and also to mitigate weather-related and other risks in the future:

• How can we adequately capture, manage, and report damages?
• Have we established accounting and technical protocols to accurately measure and track the extent of our losses?
• Do our property and casualty policies cover us if we have a claim? How can we present our claims to ensure the maximum recovery from insurers?
• If we cannot recover insurance claims, how can we recoup losses?
• Is there a formal plan in place to manage weather-related risks?
• Do employees and operations managers know what to do in an emergency?

"Well over 1,500 flights were canceled at airports in the major Eastern cities. As the storm moved north, all flights to and from the Washington Metropolitan area's airports were likely to be canceled."
David Stempler, President of the Air Travelers' Association, CBSNews.com 9/19/03

• Do we have a plan in place to effectively communicate with our employees, customers, suppliers, the media, public officials, and the general public?
• What can we do to assure employees, suppliers, customers, and the general public that our company is prepared for weather-related risks?
• What are the procedures for a storm watch? A warning? An emergency?
• How can we continue operations if employees must vacate a facility?
• What should we do after a storm passes? How can we determine when it is safe to re-enter a facility?
• Do we clearly understand our potential natural-disaster losses? How can we mitigate the expense?
• How can we manage and minimize a storm's impact on our supply chain?

Executives can take advantage of several solutions to protect their businesses and recover from an unexpected disruption of normal operations associated with a natural disaster, including:

Property Claims Consulting — Help navigate through a property loss, from reporting the claim, collecting loss data, quantifying damages, policy/coverage interpretation through settlement.

Forensic Accounting and Claims Services — Assists in all aspects of measuring and documenting property damage, business interruption, and extra expense damages. Also helps establish processes and accounting protocols to track loss-related costs and expenditures, determines initial damage estimates, and assists throughout the entire loss measurement process.

Claims Consulting — Provide pre-loss valuation, property damage, contents, and time element calculation, claim preparation, business interruption and extra expense, fidelity and stock loss claim calculations, and appraisals.

Risk Technologies — Through the use of information management systems, risk technology services help companies manage claims administration as well as regulatory and legal inquiries.

Property Loss Consulting — Create a loss management plan that includes the scope of property damage and reinstatement costs and develop a loss prevention plan that establishes mitigation strategies and a location-specific emergency response plan.

"This will be a marathon, not a sprint," said Jimmy D. Staton, a Senior Vice President with [a power] utility. "This recovery will take days, not hours."
New York Times.com, 9/19/03

Strategic Risk Communications — Provide timely and appropriate information to reassure different audiences - including employees, shareholders, clients, analysts, the media, vendors, and the public - that you are effectively managing hurricane-related challenges.

Crisis Management — Provide real-time, on the ground assistance to help companies prepare for and recover from a natural disaster, which can continue for a pre-determined time period during the actual response phase.

Business Continuity Management — Ensure that your business can survive a catastrophe by developing a recovery plan to aid in quickly restoring essential services and determining the appropriate procedures and tasks associated with storm watches, warnings, and emergencies.

Emergency Response Planning — Organize a team to prepare your facility for an approaching storm and direct preparedness, response, and recovery efforts. Safeguard employees, visitors, and the public, and specify primary and back-up emergency operation centers.

Natural Hazard Risk Consulting — Conduct a natural hazards risk assessment to understand the potential impact of severe weather. Computer modeling can be used to analyze and quantify property risks and develop strategies to help mitigate natural hazards. Other services include maximum foreseeable loss studies, corporate vulnerability assessments, insurance purchasing/risk transfer, and captive insurance development.

Supply Chain Risk Consulting — Identify, quantify, and prioritize critical weather-related risks that may impact your supply network and develop strategies to mitigate the exposure. Assist in identifying alternate sources of materials if the storm created greater demand and shortages.

If you have any questions or would like additional information, please contact us.