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Risk in Context

Preparing for Hurricane Lane’s Impact

Posted by Paul McVey August 22, 2018

Hurricane Lane, a Category 4 storm with peak winds of 155 mph as of Wednesday morning, is forecast to move close to or over the Hawaiian Islands later this week, bringing high winds and heavy rain over the next several days. As of this writing, a hurricane warning is in effect for Hawaii County and Maui County, while hurricane watches are in effect for Kauai and Oahu, Hawaii’s most populous island.

Although it is uncertain whether the storm will directly hit Honolulu and other population centers, businesses should monitor the path of the storm and be prepared to take quick action to protect their people and properties and minimize disruptions during and after the storm. They should also be ready to immediately begin the process of restoring damaged property, resuming business operations, and recovering insurance.

Concentrate on Employee Safety

Your people and their families may be personally affected by the storm and their well-being should be a main area of focus. Before the storm, ensure that those affected can get to safety and make other preparations. Keep in touch with them during and after the storm and provide humanitarian assistance if needed, including guidance on how they can manage their own insurance claims.

Review Insurance Coverage

Before the storm arrives, you should familiarize yourself with your insurance coverage, understanding key definitions, sublimits for flooding and other coverage areas, and other terms in applicable policies. Stay in close contact with your in-house insurance and operations team leadership, your broker’s claims advocates, and insurers and establish a framework and protocols for gathering information and filing a claim once the storm passes.

Secure Your Property

Prior to and after the storm, you should take actions to minimize dangers to and on your property. For example, you should remove standing waters to reduce the risk of ground or structural collapses, disconnect equipment in the event of a power outage, and safely remove any dangerous materials, debris, and wildlife or chemicals brought in by floodwaters.

Document Your Losses

Pre-storm planning will help you be ready to file a potential insurance claim immediately afterward. Be prepared to:

  • Document property damage, including verbal communications, immediately to avoid loss of information due to memory loss or employees leaving the company. Gather photo or video evidence without jeopardizing employee safety, including using drones or other aerial surveillance.
  • Gather relevant records, including inventory, payroll, purchase orders, and business operations.
  • Keep track of service interruptions, noting the time, location, and reason for any interruption.
  • Raise potential coverage questions and dispute issues early with your insurer’s claims team. 
  • Capture financial losses. A best practice is to create a new ledger to track all loss-related expenditures and use a unique accounting code to capture recovery-related labor costs.

Hurricane Lane could pose a major challenge to your business interests in Hawaii. But being prepared can help you better protect your operations and employees and aid in your recovery after the storm.

Related to:  Property , Casualty

Paul McVey

Paul McVey is a managing director at Marsh. He is Marsh’s National Chief Property Claims Officer and a member of the company’s US Client Advocacy Services leadership team.