This year's hurricane season is forecasted to have the third highest level of storm intensity this decade, yet many businesses are not fully prepared for severe weather events. Some lack basic severe weather preparedness plans, potentially placing the business - and the people who work for it - at risk.
In 2003, the Federal Emergency Management Agency (FEMA) reported that 40 percent of businesses do not reopen after a disaster and a further 25 percent of businesses fail within a year. Similar statistics from the U.S. Small Business Administration indicated over 90 percent of small businesses fail within two years due to putting too much reliance on insurance and awards from government agencies.
The data may be nearly twenty years old, but it is just as relevant today as it was then. In the ten hurricane seasons prior to FEMA's report, five had seen average or below average storm intensities as measured by the Accumulated Cyclone Energy (ACE) scale. In the past ten seasons, four have seen above normal storm intensities and two were classified as “hyperactive” - the highest level on the scale.
The bad news for businesses unprepared for severe weather is that the latest hurricane season forecast (PDF) predicts an ACE measurement of 150; which puts it just below the hyperactive level and - if the forecast is correct - will make 2019 the third most intense hurricane season this decade. Furthermore, if recent severe weather patterns are repeated, the hurricanes could reach further inland than ever before - affecting many businesses who have historically not been at risk from severe weather emergencies.
Many Businesses Fail to Prepare for Hurricane Season
Last year, FM Global - a US mutual insurance company specializing in loss prevention services - conducted a survey among its customers affected by Hurricanes Harvey, Irma, and Maria. The company found 62 percent of businesses that experienced an adverse impact due to the three hurricanes were not completely prepared against their impact and/or their consequences.
In a press release, the company's Vice President - Dr. Louis Gritzo - attributed the lack of preparedness to risk denial, risk miscalculation, and an over-reliance on insurance. It was noted that 7 in 10 respondents were going to make changes to their risk management strategies and that 40 percent will invest more in risk management, property loss prevention, and/or supply chain risk management.
Dr. Gritzo commented that relying on insurance to support a business after a natural disaster is a mistake. He said “insurance cannot restore market share, brand equity or shareholder value”, and added “these candid admissions drive home a fundamental truth about catastrophe. People routinely fail to understand or acknowledge the magnitude of risk until they've experienced a fateful event.”
How Prepared is Your Business for a Severe Weather Emergency?
In 2007, the National Safety Council published a course for small businesses with the objective of encouraging them to develop emergency strategies and emergency preparedness plans. Although the course is directed at small businesses and doesn't directly focus on severe weather, the introduction includes an excellent assessment form to gauge each business's readiness for an emergency event. The assessment form consists of eleven questions:
- Does your business know what kinds of emergencies might affect it – both internally and externally?
- Does your business have a written, comprehensive emergency plan in place to help ensure your safety and take care of employees until help can arrive?
- Has your business created and practiced procedures to quickly evacuate and find shelter in case of an emergency?
- Has your business created a communication plan to communicate with employees in an emergency?
- Has your business talked with utility service providers about potential alternatives and identified back-up options?
- Has your business determined operations that need to be up and running first after an emergency and how to resume key operations?
- Has your business created a list of inventory and equipment, including computer hardware, software, and peripherals for business continuity and insurance purposes?
- Has your business met with your insurance provider to review current coverage in case of an emergency?
- Does your business promote family and individual preparedness among co-workers either during staff meetings or via internal communication?
- Have emergency shutdown procedures been developed for equipment such as boilers, automatic feeds or other operations that cannot be left running in an emergency evacuation?
- Has your business worked with your community on emergency planning efforts and helped to plan for community recovery?
Each question can be answered “Yes”, “No” or “Unsure”. Only if eight or more questions are answered “Yes” is a business considered to be on its way to having a comprehensive and effective emergency preparedness in place. From this starting point, businesses taking the course are shown how to best prepare for any type of emergency with special focus on communications, direction and control, training, medical services, and community outreach.
Why Effective Communication is Essential, Before, During, and After an Emergency
Effective communication is essential before an emergency to ensure everybody knows their roles when an emergency occurs. It is essential during an emergency to keep everybody safe, and essential after an emergency to get the business running again as quickly as possible. However, during severe weather emergencies, it is advisable to have a communication system in place that does not rely on one channel of communication to keep in touch with emergency services, employees, customers, and suppliers.
Broken power lines, damaged cell towers, and flooding are frequent occurrences during the hurricane season; and these events can prevent voice calls, SMS texts, and emails reaching their destination. Ensure your business has a communications system capable of supporting your emergency preparedness plan.