How To Weather The Worst Of Storms In Your Business

Scott Menath by Scott Menath, Special to bizNEVADA

Many people watched the news with horror as Hurricane Michael swept through Florida and Georgia last month. How could anyone defend themselves against this threat?

 

The impact of the hurricane’s sustained 155 miles per hour winds was almost complete in its devastation of Mexico Beach, a shoreline community of the Florida panhandle. Scattered like ruins were fragments of a once thriving neighborhood and nearly nothing was spared. That is, with the exception of what many news reports calling the “Miracle Home.”

The spacious white house owned by Dr. Lebron Lackey and his uncle, Russell King, looked impossibly untouched while surrounded by shattered debris in all direction. As it turns out, the survival of the home wasn’t a miracle at all, but rather was the result of foresight and an investment in being prepared for the worst. Dr. Lackey shared that it only cost an additional 15-20% in materials and building costs to construct a home that was designed to withstand 250 mile-per-hour winds.

The lesson is obvious for business owners in today’s thriving corporate climate. Yes, these are good times being experienced by most in Nevada, but is your organization prepared for when the next big storm hits? For many businesses, the next tempest may actually be caused by Mother Nature, be it of strong winds, or a raging firestorm. Many buildings in flood zones, high waters are always a risk. But, there are many other threats to the health and wellness of a business. These can include embezzlement, lawsuits, and workplace injuries. And, while many could properly argue that the #MeToo movementof reporting workplace sexual abuses is advancing gender equality and safety, it’s also exposing corporations to radically elevated legal risks to the leadership at all levels of an organization. Sure, things may be going great for your business today. But, are you as prepared as you can be for the next great storm. Have you built your business to withstand 250 mile-per-hour winds?

Sadly, as is the case in Florida and Georgia, and also with the devastating fires last year in Santa Rosa, California, the tragedy extended well beyond the natural disasters. Because it was the day after when many of the victims discovered they were insufficiently insured. Many in Santa Rosa had coverage for their homes, based on a valuation that was ten and twenty years out of date. Few of those homeowners could afford to rebuild their houses with the settlement they received.

Almost all businesses are insured. But, all too many of them are grossly under-insured, leaving them in a position of great vulnerability. Many had employed a “set and forget” approach where they streamlined their insurance coverage many years ago when the local economy was in a tailspin. Not only did they make their coverage “lean and mean,” but they based it on valuation that only made sense in a crashed economy, when contractors were gasping for air and would work on the cheap.

In today’s super-heated climate, if a building you own takes a big hit, you are going to be shocked to know how expensive it is to rebuild in a market where labor costs and materials have skyrocketed. Undervaluation isn’t just an issue when it comes to your building. Many businesses have increased their inventory and equipment to record levels, but haven’t made the insurance adjustment to ensure they are covered if something bad should happen.

In the event of a legal storm during this increasingly litigious business environment, are you confident you have the coverage you need to keep you afloat? Many business owners have woefully inadequate coverage for these types of all-too-frequent storms. Ten years ago, businesses in Nevada were forced to take on much of the risk themselves just to preserve their thin margins. Now as business is booming, there is no better time to weatherproof your investment of a lifetime. Because, as we all know, the storms will come again at some point.

How do you know if you’ve got 50 mile-per-hour or 250 mile-per-hour coverage? It’s simple. Meet with the right insurance professional and get a thorough review of your policy. Don’t wait until the storm sirens ring. It’s when the skies are blue, and the sun is shining that you should make sure you are properly prepared.

Pick up the phone, and take the first step to get coverage strategy reviewed. It may just be the most important business call you’ll make this year.

Scott Menath is a principal at Menath Insurance, a local independent insurance broker. For more information regarding the information in this article, Scott may be reached at 800-756-6507

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