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Risk in Context

Protecting People and Operations as Hurricane Harvey Approaches

Posted by Robert W. O’Brien August 25, 2017

With Hurricane Harvey gathering speed and strength in the Gulf of Mexico, businesses should be prepared to take rapid action to safeguard employees and minimize business disruptions. Here’s what you should focus on as the storm approaches the Texas coast.

Focus on People

Your employees and their families are likely to be personally affected by any storm that threatens your organization. Ahead of the storm, help your people get to safety and make other preparations. During and after the storm, stay in regular contact with them and provide humanitarian assistance as needed.

Stabilize Your Property 

Before allowing widespread access to your property, work with trained specialists to correct any conditions that could endanger people or contribute to further damage. For example:

  • Remove standing water and ensure structures are not at risk of collapse.
  • If the power is out, disconnect all equipment that could cause injury or damage from a sudden power restoration.
  • Remove any dangerous materials debris and wildlife or chemicals brought in by floodwaters.

Document Your Losses

Being ready to file a potential insurance claim will be critical to your post-storm recovery. To assist forensic accountants and claims specialists after a loss, you should be ready to:

  • Document any material information, including anything you receive or share verbally in conversations with customers and suppliers. Doing so right away can help avoid the loss of information as memories fade or key employees leave the company.
  • Collect photo evidence. Without jeopardizing employee safety, take aerial or ground-based photos or video of standing water and record progress as it recedes in order to measure resulting water damage.
  • Capture financial losses. A best practice is to create a new general ledger account to more easily document any extra expenses incurred. Similarly, use a unique accounting code to capture all labor costs related to your recovery.
  • Keep track of service interruption details. Wherever possible, note the time, location, and reason for any interruption, along with the specific affected equipment used by utility providers — including substations, transmission lines, and distribution lines — and distance from your property.
  • Evaluate your losses in writing. Be ready to provide:
    • The most recent physical inventory.
    • Payroll records for employees used in cleanup and recovery, including tasks performed, specific hours worked, and pay and overtime rates.
    • Purchase orders or estimates of all contracts for repair or replacement of damaged assets.
    • Profit and loss statements for the two years prior to the event for all affected locations.
    • Fixed asset register and depreciation records.
    • Budgets and forecasts prepared before the loss to depict anticipated loss results.

Managing the effects of a storm or other natural catastrophe can be a challenge, but you can position your organization to better protect your employees and bottom line. And you can work with your risk and insurance advisors to manage your claim and accelerate your recovery.

Robert W. O’Brien

Robert O’Brien, managing director of Marsh USA, Inc. is a senior property claims officer of Marsh’s National Property Claims practice.