Hurricane Season 2024: Preparedness for Business Owners

Brace yourselves: Hurricane season is just kicking off, and this year's is forecasted to be very active. Colorado State University (CSU) forecasters predict five major hurricanes (those with winds above 111 miles per hour) out of 23 named storms.¹ AccuWeather also predicts a "super-charged" season, with 20 to 25 named storms across the Atlantic basin, including eight to 12 hurricanes.²

The forecasted explosive hurricane season is driven by unusually warm waters in the Atlantic basin and temperature changes in the eastern Pacific Ocean, which are expected to cool thanks to La Niña. This could potentially worsen the severity of the Atlantic hurricane season.

With that on the horizon, what's a property owner in a hurricane-prone area to do? RPS Area Assistant Vice President Brian Eidelbus walks us through hurricane preparedness for business owners, focusing on the critical steps businesses should take to help ensure safety, minimize property damage, and get properly protected in the event of a loss.

The Importance of a Business Continuity Plan

"Business continuity is critical for all operations, although this looks different depending on the needs of operation and industry," says Eidelbus. "If, for example, the clients are in the service industry, they must determine whether to remain at their physical locations or set up temporary, alternative locations. Businesses also must ensure their information systems are in the cloud so relocation goes without a hitch."

Eidelbus also recommends that all non-essential businesses evaluate their ability to work remotely.

"A business continuity plan should be nimble, as the intensity and trajectory of a storm can change very quickly," explains Eidelbus. "Businesses should be able to pivot and address changes as they arise."

Businesses should know each employee's location and how a storm might affect them. Ensure all employee contact information is current ahead of any storm. Some companies have dedicated HR systems and regularly check that the information is current and accurate so everyone is accounted for.

Depending on the organization's size, implement annual hurricane preparedness training and evacuation sessions to keep employees safe and the business running. An evacuation plan should include routes, employees to contact, a designated person who remains onsite to perform essential functions of shutting down critical items, emergency contact information, and special instructions regarding hazardous materials and equipment if needed.

Be Proactive All Year Round: Risk Mitigation and Insurance Options

Businesses should take specific steps and precautions throughout the year to minimize property damage before the hurricane season. This helps protect the property and improve a client's risk profile with insurance carriers.

"For example, evaluate the roof's condition and, if necessary, replace it with a brand new one. This will help mitigate damage and open insurance market opportunities for Property insurance, especially in catastrophe-prone areas," says Eidelbus.

He also stresses the importance of insureds knowing what to do if they've incurred property damage after a hurricane, including contacting their agents and carriers.

"I recommend having this conversation with your clients when purchasing insurance and as a reminder during renewal. For example, let clients know what the carrier expects in the event of property damage, such as securing the property to prevent further damage, theft, or vandalism."

In this challenging Property insurance market, review your insured's risk tolerance and budgetary parameters concerning lender requirements and purchasing catastrophic wind coverage versus self-insurance. In addition, coverage options should be reviewed to address specific exposures beyond property damage post-hurricane, such as Business Interruption and Extra Expense insurance.

"The insurance market is constantly evolving, so it's important to have these conversations with clients regularly to determine what insurance options are available to them and address how they can play a critical role in minimizing losses," says Eidelbus. Having these conversations in the calm before the storm is vital preparation for when winds start to howl.