Sept. 1, 2004—As Florida recovers from Hurricane Charley and North Carolina struggles to restore power after Tropical Storm Gaston, a new Category 4 system is churning in the Atlantic. According to the current forecasted track, Hurricane Frances will strike Florida on Sunday morning with in excess of 130 miles per hour. Though the storm’s track may shift, Hurricane Frances is forecasted to make landfall by the end of this week and has potential to affect residents and businesses across the Eastern seaboard of the United States.



[South Carolina] Governor Mark Sanford met with area mayors ... and urged coastal residents to monitor developing Hurricane Frances. After several such storms affecting the state this year "people will say it's not that bad. A Category 4 or Category 5 storm would be very bad, and it's important we not grow complacent."
Sun-Sentinel, 8/28/04

Hurricane Frances is the fourth hurricane of the 2004 Atlantic hurricane season, following Hurricane Charley, which has caused up to $7.4 billion of damage to homes, businesses, and personal property, according to the Insurance Information Institute. After enduring several severe storms already this month, parts of the Eastern Seaboard, including Florida and the Carolinas, are likely to face strains in emergency assistance, shortages in storm-related supplies, and increased chances of flooding as Hurricane Frances nears Florida’s east coast.

Even if you believe your business is located only in areas that are unlikely to be affected by the storms you may still face weather-related risks if a supplier on which you rely is forced to suspend production. With today's complex, interdependent, and often global supply chains, it is likely that severe weather will have some effect on your operations.

Understanding the potential danger severe weather poses 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?
• 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?
• 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, organizations 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.



Forecasts put Frances anywhere from Cuba to the Carolinas by the end of the week. Residents of those areas should be "paying attention, dusting off their hurricane plans, making whatever preparations they failed to make at the start of hurricane season," said Stephen Baig at the National Hurricane Center in Miami.
The Washington Post, 8/30/04

Once the risk is properly understood and quantified, organizations should review their business continuity plans and emergency response capabilities 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 companies to effectively communicate with all key stakeholders during natural disasters and other crisis events.

Even if your facilities are not hit by Hurricane Frances, your supply chain can be affected by events 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 is spared the effects of Hurricane Frances, it is wise to prepare for not only hurricanes but also other types of severe weather. Although no one can predict when a natural disaster will occur, businesses can protect their people, facilities, and operations by preparing for the worst.

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