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FIORITO ON INSURANCE
Keep Your Restaurant Afloat During Hurricane Season Planning ahead is the name of the game when it comes to hurricane season. Even in a relatively inactive season, as is expected for 2015, coastal areas can still experience as many as 12 name storms, seven of which will become hurricanes and three that will evolve into Category 3 or higher storms.
Bob Fiorito, Vice President of Business Development at Hub International Robert.Fiorito@ hubinternational.com
Because even businesses with employee
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rom June through November business owners must take a two-pronged approach to survival: firstly, crisis communications, management and business continuity planning and then back up efforts with the proper insurance coverage. Before Disaster Strikes A crisis communications, management and business continuity plan in place will help ensure employee stability in the workplace. Pre-determined employee notification channels will be critical to disseminating information should the need arise. Business owners should have employee contact information at their fingertips, while also establishing a toll-free hotline number or social media site that can facilitate com-
communications and business continuity recovery plans in place can suffer a setback as a result of a storm, it’s important to examine your disaster coverage.
munication during a storm. Similarly, understanding each business’ individual risk is key to necessary business continuity planning. It is smart to isolate the business risk first. Is it wind, power outage or hurricane damage? Will your restaurant be down for a week, a day or a month? Review your assets and make sure the operations that are most critical have built-in redundancy or are covered by insurance.
56 • June 2015 • Total Food Service • www.totalfood.com
When Disaster Strikes Because even businesses with employee communications and business continuity recovery plans in place can suffer a setback as a result of a storm, it’s important to examine your disaster coverage. There are a variety of policies to help coastal businesses recover from an event – each involving a different aspect of the restoration.
Business income coverage. Take a hard look at your business income coverage limits, which include loss of income as a result of an event - are they sufficient? Extra expense coverage often accompanies business income coverage for necessary business costs, such as setting up business in a temporary location. Based on the risks you identified above, can you build in enough cash reserves, or will you need to rely on insurance coverage, in case of an event? Go through a potential business interruption to determine the estimated monthly costs for both loss of income and extra expenses. How long will it take you to get your business up and running again? How much can you afford to lose? Base insurance coverage needs on identified risks to ensure that any business interruption will be covered to the greatest extent possible. Contingent business income coverage. What if your business isn’t in a storm zone, but a key supplier of your business goes down due to a storm and as a result your business can’t meet demand? Contingent business income coverage can bridge these gaps. Ordinance or law coverage. Depending on the age and condition of the facility, when rebuilding after a storm, additional building codes may apply. For example, if your facility was built in the 1980s, new code requirements may be mandatory when rebuilding. Additionally, if a building was only half destroyed, most local municipalities will require the entire building to be demolished and rebuilt, often costing more than the insurance will reimburse. Flood coverage. It’s important to realize that most property policies exclude flood coverage. Secondly, businesses typically buy minimum