Flooding is the costliest and most common natural disaster in New Hampshire, and the next several decades are expected to bring at least 10% more extreme precipitation events to the Northeast. Is your business prepared to weather the storm?
Although most New Hampshire businesses have winter weather plans in place, they often overlook the severe weather risks that arise between spring and fall.
Rebuilding takes time and money, two resources that are ever more precious to businesses amid mounting economic pressures like inflation, supply chain issues and worker shortages. Business interruption insurance often takes the brunt of the hit, but coverage doesn’t extend to all costs.
Your business doesn’t have to be at the mercy of unpredictable weather patterns. Consider implementing these best practices so your business is ready for whatever Mother Nature throws its way.
1. Seek out flood insurance beyond NFIP. The National Flood Insurance Program (NFIP) allows homeowners and businesses to purchase flood insurance from the federal government. NFIP coverage pays up to $500,000 for a business’s structure and $500,000 for its contents. It’s a great start, but most businesses will need more coverage than NFIP provides.
Obtaining a private flood insurance policy as well — even if your business is not in a flood zone — can help your business contend with unexpected flooding events, even in areas not previously considered high risk. New Hampshire’s infrastructure is not designed to endure extreme flooding, so extra coverage will be critical should your business sustain significant damage.
2. Mitigate the loss before it happens. If your business is in the danger zone of an oncoming storm, swift and strategic action can reduce damage and minimize downtime.
Be prepared to seal doorways and cracks with sandbags. Move items off the floor and from lower-level shelves and cabinets onto higher surfaces that are less likely to get wet if flooding occurs. If your inventory includes vehicles or other large assets, temporarily move them off the lot. Take a moment to photograph your business’s property before disaster strikes for insurance purposes.
Don’t forget about your plumbing and electrical systems. Consider getting professionally installed check valves to reduce the risk of sewage backup. Have your circuit breakers marked and easily accessible so you can quickly shut off power if flooding threatens your business’s electrical system.
3. Develop an emergency operation plan. What’s your plan to keep your business open if adverse weather damages your business property? Your employees and customers will want to know the answer.
It could take three to four months for a claim on your property to be settled and even longer for repairs to occur. Some forethought can go a long way in allowing your business to carry on.
Details matter when developing an emergency operation plan. Outline work-from-home options if applicable, and clearly define roles, responsibilities and protocols for communication with employees and customers. Your plan also should include data backup solutions, so you can obtain critical business information if your physical location is inaccessible.
4. Have the right coverage. Know your insurance options, and make sure your coverage reflects your business needs. Two key insurance policies to evaluate are business interruption insurance and property insurance.
Business interruption insurance reimburses your business for income loss due to a temporary shutdown due to storm damage. These policies often have a 72-hour deductible period, which means your business must be closed for at least three days before the policy kicks in. Consider choosing a shorter deductible period for a higher premium if your business can’t afford an extended period without income. Also, make sure your business income continuation numbers are up to date based on your current payroll or sales numbers during your yearly renewal to mitigate the claim during the policy period.
For property insurance, check that your building’s valuation reflects current market rates. If your policy is based on outdated values, you may not receive enough coverage to rebuild/repair your property after a storm.
Obtaining separate flood insurance is essential as well. This allows you to cover the cost of flood damage to the property inside your building and any other losses outside the scope of the other types of coverage.
While reviewing all of the parts of a policy can sound time-consuming, a great broker partner can help the process become routine, even as business needs change. Thinking through potential risks and building a plan in advance is the key to riding out storm season with minimal impact on your bottom line.
Jim Walsh is senior vice president and director of sales at HUB International, with New Hampshire offices in Alton Bay and Manchester.
