With the second anniversary of Superstorm Sandy just around the corner, I was thinking back to the whirlwind of media predictions that preceded landfall. Where would it strike? When would it hit? How bad would it be? Forecasters commented over and over that predicting the path of the storm and its ensuing destruction was particularly difficult because nothing like it had happened before. So I was surprised to learn of an even larger storm from 1821: the Norfolk and Long Island hurricane. If the Norfolk and Long Island hurricane were to hit today, its damage would exceed that of Sandy, Rita, Andrew and Katrina.
Most of the business that were damaged or destroyed during Sandy have been repaired, rebuilt and have since reopened. But some are still recovering, and others have closed for good. So what’s the lesson?
Big storms are near impossible to predict, but they are an inevitable reality of living and doing business on the East Coast. Being prepared puts the odds in your favor and protects your company and livelihood in the event another storm, or other natural anomaly, hits. A thorough examination of your insurance program, risks and potential gaps in coverage is essential to prepare and protect your company. Does your property insurance include drying out coverage? If so, is it reimbursement only, or will the carrier do the work? If insured with an all-risk property policy, is business income, extra expense, business interruption and/or contingent business income included in the property limits, or are they separate? Are there sufficient limits for a significant loss event? How is an elemental loss event defined in the coverage, and when is it qualified as a single occurrence (i.e. wind damage versus water damage due to non-wind driven flood)? Is there an overhead power line exclusion? A dedicated, independent risk management consultant can help ease the burden of this complex task, and ensures that all facets of your operation’s risks have been uncovered and mitigated to the fullest extent possible.
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