Engaging in these pre-loss activities can help businesses to manage storm-related incidents and preserve operations to the greatest extent possible. Without such planning, many businesses may be unable to survive the devastation brought by a natural disaster.

Even if your business is located in areas unlikely to be affected by these storms, you may still face weather-related risks, if a supplier or vendor on which you rely is forced to suspend production, or can no longer provide data processing or call center services, for example. With today's complex, interdependent, and often global supply and outsourcing chains, it is likely that severe weather will have some effect on your operations.



"Hurricane Charley is going down as one of the most costly natural disasters of all time. There has not been a storm of this magnitude to hit the west coast of Florida in over 70 years."
Edward Lawson, President and CEO, 21st Century Holding Company, South Florida Business Journal, 8/16/2004

Understanding the potential impact uncontrollable severe weather such as hurricanes can have on your business, and preparing for it, is the key to managing weather-related risks. Your employees should know what to do before, during, and after a storm hits. To gauge preparedness and protect your people and business, you should be asking the following questions:

• Do I understand my potential natural-disaster losses and how to mitigate impacts?
• Is there a formal plan in place to manage such risks? How do I inform key stakeholders about policies and procedures?
• Do employees and operations managers know what to do in an emergency? Have crisis scenarios been reviewed and response plans tested?
• How can I continue operations if employees must vacate a facility? How can I determine when it is safe to re-enter?
• How can I manage and minimize the impact on my supply chain?
• What is my post-storm plan?
• Is there a plan in place to effectively communicate with my employees, customers, suppliers, the media, public officials, and the general public?
• Have I established accounting and technical protocols to accurately measure and track the extent of my losses? Can I adequately capture, manage, and report damages?
• Have I established procedures to back up and/or recover digital data that could be lost during a storm? Do I know what expert resources I can call upon when data recovery is required?
• Will my current policies sufficiently cover any natural-disaster property and casualty claims, including business interruption losses? How can I present my claims to ensure maximum recovery?

To begin to answer these questions, an organization should start with a natural hazards risk assessment to understand the potential impact of severe weather on its business. Computer modeling can be used to analyze and quantify property risks and develop strategies to help mitigate natural hazards.

Once the risk is properly understood and quantified, an organization should review its business continuity plans, emergency response capabilities, and crisis management plans to ensure that people know what to do in the event of a storm watch, warning, and emergency — and after the storm hits. Understanding the organization's insurance assets and being prepared to file claims can also have a significant impact on a company's ability to quickly resume business after a storm hits. It also is critical for a company to communicate effectively with all key stakeholders during natural disasters and other crisis events, and thus have procedures and policies in place to ensure that communication with employees, government officials, and other audiences occurs in a timely manner at all stages of an incident.



Charley is virtually certain to be the most expensive natural disaster in the decade since the Northridge, Calif., earthquake, which had inflation-adjusted insured losses of about $15 billion.
CNN, 8/17/2004

Just as importantly, given the information age in which we live, a business needs to consider what digital data to store on and off premises as well as how it can recover that data if there is a significant power problem or damage to facilities in which computers and servers are located. If the damaged computers are not handled properly, valuable information that could aid with business recovery could be lost.

Even if your facilities are not impacted directly by a storm, your supply chain can be affected by events across the country or halfway around the world. You should take steps to identify, quantify, and prioritize critical weather-related risks that may impact your supply network and develop strategies to mitigate the exposure.

Hurricane season continues until November, so even if your business was spared the effects of Hurricane Charley and Tropical Storm Bonnie this time, it is wise to prepare for the remainder of the season's storms. Although no one can predict when, where and with what intensity a weather-related incident will strike, businesses can protect and preserve their people, facilities, and operations by being best prepared for the worst.

You may not be able to control the weather. But you can control the impact it has on your business.

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