Published in ALM/Law.com/Daily Business Review
After a relatively quiet start to the 2023 hurricane season, the tropics are heating up as we inch closer to the statistical height of the Atlantic Basin hurricane season – September 10. August 29 marks the 18th anniversary of Hurricane Katrina and the 2nd anniversary of Ida. As Florida prepares for Hurricane Idalia, it should be a reminder to businesses in other hurricane-prone areas to be prudent in reassessing their preparedness plans as well. As we approach the final stretch of the summer, a drastic increase in wildfires and rapidly increasing tropical weather patterns should garner everyone’s full-attention.
Our Adams and Reese Crisis Preparedness and Response Team is here to assist individuals, businesses, and community leaders with disaster preparedness and response. Since we are in the dog days of summer, we categorized 10 critical tips based on “Yogi-isms,” - one-liners made famous by baseball legend Yogi Berra.
1. Create a Business Emergency and Preparedness Plan
“You can observe a lot by just watching.”
It sounds simple, but you have to take action – NOW. You should have a written plan that outlines procedures evacuating employees, defined staff responsibilities, securing business property and key assets, implementing business continuity actions, and post-storm recovery processes. Employees are an essential part of your business, so they need to be aware of the plan and know what to do in the event of a natural disaster. Publishing these plans and these expectations to your employees is imperative. The plan can also include a maintenance and operations preparation checklist - routine inspections will help you address potential risks, threats, hazards, or things that could occur on and around the business property.
2. Establish Communication with Employees/Customers/Vendors
“It was impossible to get a conversation going, everybody was talking too much.”
Communication during a crisis is the most important function of any organization. You must have a communication infrastructure in place prior to a disaster in order to be most effective. Update the emergency contact information for your employees, customers, and vendors. Ensure the effectiveness of your communication systems; this plan should include how you will communicate with employees, customers, and vendors/suppliers before, during, and after the natural disaster. Update vendor lists and be aware of their disaster policies. In the event of a disaster, establishing that all employees and their families are safe should be the first priority.
3. Designate a Disaster Recovery Team
“We made too many wrong mistakes.”
This team should be responsible for implementing the business emergency plan and coordinating the recovery efforts. Test your business emergency plan. This will help to identify any gaps in the plan and ensure that everyone knows what to do. Plan how you will secure your business property – boarding up windows, securing any outdoor furniture or equipment, and/or working with your office-building manager and owner to determine roles and responsibilities of property owners and tenants.
4. Review Insurance Coverage and Policies
“Baseball is 90% mental … the other half is physical.”
Review your business insurance coverage and policies; have property regularly appraised; know the deductible and all policy contract language; and make sure you have adequate coverage for the business. Become familiar with required information needed for incident and property loss reports, and update those as needed.
5. Be Familiar with Contract Language
“I knew I was going to take the wrong train, so I left early.”
It is extremely important to understand the language and legal terms within policies and contracts. For example, you hear “force majeure” a lot around natural disasters. The force majeure clause is typically included in contracts to excuse certain obligations of the parties in unforeseeable and unavoidable catastrophes, such as natural disasters. A well-written force majeure provision will adequately spell out rights and obligations of each party should a hurricane or other natural disaster occur. Depending on the extent of the natural disaster, a party may obtain temporary relief from performing under the agreement, such as providing a service or paying rent. Likewise, if the disaster is severe, a force majeure provision may allow the parties to terminate the agreement or renegotiate terms that reflect the post-disaster situation. The more that you can specify in your contract language, the less you will be relying later on courts’ interpretation.
6. Photograph/Video Your Business Assets
“The other teams could make trouble for us if they win.”
Photo and video documentation of the condition of your buildings and assets prior to any loss are extremely important to any insurance claim. Document anything in your property that is going to be of value. Document, Document, Document - in any coverage or insurance dispute, documentation is extremely valuable and can reduce the timing of receiving insurance proceeds, compensation, and financial recovery assistance.
7. Back Up Data and Files
“Do you mean now?”
Work with your IT team to establish a plan to back up all data, business records, financial information, and customer files, so that nothing is damaged or lost in a natural disaster.
8. Have a Business Back-Up Location/Review Work from Home Policies
“If you don’t know where you are going, you will wind up somewhere else.”
Do you have a backup physical location for your business in case of a long time away? What are the work from home policies and needs of your employees to enable them to work from home? Know the plan of how you will operate your business if you do not have the resources of being back in your building, losing power, Internet, etc. It may take some time to recover, so have plans in place to get your business back up and running if your current location is inaccessible for an extended period.
9. Stay Informed About the Weather
"In theory there is no difference between theory and practice. In practice there is.”
You always want to make sure you have the right weather information. Accuracy and technology have improved so much in tracking weather patterns. Hurricanes in particular are forecasted from early in their developments all the way to landfall. This information is relayed in real-time for businesses to prepare and react accordingly. Know where and how you are getting that updated news and how you can best communicate that news to your employees, so that they are aware of when the business could possibly re-open.
10. Understand the Recovery Resources Available to Your Business
“It ain’t over ‘till it’s over.”
The lifeblood of recovery is cash, and pre-planning is important because in most cases, as it may be six months before seeing the first federal dollar of disaster recovery assistance. Understand what funds your business may be eligible for and how these funds can be leveraged and maximized. The main outlets are the FEMA Public Assistance Program, Hazard Mitigation Program, and Housing and Urban Development funding which comes through Community Development Block Grants. However, there are more than 1,500 federal agencies and programs that can be leveraged with initial funding received from FEMA, not to account for additional funds available at the state and local levels.
Let us touch on several –
- Small Business Administration and its low-interest disaster loan programs
- Economic Development Administration
- S. Department of Commerce
- National Institute of Standards and Technology for manufacturers
- Public Works Program
- Federal Housing Administration
- S. Department of Health and Human Services for healthcare entities
- S. Department of Education disaster assistance programs for schools
- Livestock Indemnity Program for farmers
- Emergency Conservation Program
- Emergency Forest Restoration Program
- EXIM for exporting companies
- MARAD for maritime firms
- FAA for airports, all to name a few.
There are many programs, and of course, requirements and exceptions for them all, so we encourage businesses to take the time to understand these opportunities before a disaster hits.
About the Adams and Reese Crisis Preparedness and Response Team: Thanks to our regional footprint across the Southeast, our team is familiar with a host of natural disasters that can strike, both with advance notice and without warning. Our team members have helped businesses and individuals with proactive disaster planning for events such as hurricanes, and our experience includes post-natural disaster relief counseling in the event of an unanticipated weather event such as a tornado or flood. We address issues including insurance claims, business interruption, liability, employment issues, and related litigation that may arise following a severe weather event.