Weathering the storm
Hurricane season for both the Atlantic and Eastern Pacific regions ends on the last day of November.
This has been a relatively calm year. However, National Oceanic and Atmospheric Administration (NOAA) statistics show that on average, 11 tropical storms develop over the Atlantic Ocean, Caribbean Sea and the Gulf of Mexico each year.
Many of these storms remain over the ocean and never impact the United States coastline. Six of these storms become hurricanes each year.
“In an average three-year period, roughly five hurricanes strike the U.S. coastline, killing approximately 50 to 100 people anywhere from Texas to Maine,” NOAA says. “Of these, two are typically ‘major’ or ‘intense’ hurricanes.”
And businesses that are hundreds of miles from a coastline can also be affected by hurricane and tropical storm force winds, tornadoes and flooding, says Zurich American Insurance Co.
You should know your risks, and make plans to ensure your business’ survival.
Preparing for and surviving a hurricane
After gaining strength over the Gulf of Mexico, Hurricane Katrina made landfall on the Gulf Coast on Aug. 29, 2005, near Buras-Triumph, La.
According to NOAA, Hurricane Katrina was the most destructive storm in terms of economic losses. The latest tally of costs estimates that insured losses will reach approximately $60 billion (including flood damage).
When all is said and done, the storm could cost the Gulf Coast states as much as $125 billion, NOAA estimates. At least 1,836 people lost their lives in the storm and resulting floods.
Hurricane Katrina had sustained winds during landfall of 125 mph. There have been stronger storms, including the Labor Day Hurricane of 1935 (winds approaching 200 mph), Hurricane Camille in 1960 (190 mph), Hurricane Andrew in 1992 (165 mph), and Hurricane Charley in 2004 (150 mph).
We now are at the five-year anniversary of Hurricane Katrina, and there are still thousands of displaced residents in Mississippi and Louisiana who are living in temporary housing. There is still much rebuilding to be done to homes and businesses.
Due to the magnitude of the storm, there was no way to prevent some of the damage. How does one prepare for and guard against a 13-foot storm surge, which is exactly what tire dealer Jack Andry, of Jack’s Firestone in Bay St. Louis, Miss., experienced?
However, some of the damage could have been prevented if the coastal residents had created a plan ahead of time on how to lessen some of the storm’s effects.
If your business is in an area that could be affected by a hurricane, here is some expert advice from Zurich American Insurance on how to weather the storm.
1. Develop a written hurricane preparedness plan.
2. Determine how best to provide emergency backup power for your facilities. In new construction, make sure that hurricane protection and emergency power backup are key design features.
3. Buy flood insurance if there is even a chance of a flood in your area or the potential that storm surge will affect your property. Review the National Flood Insurance Web site at www.fema.gov for more in information.
4. If located in a low-lying area, arrange for an alternative storage lot at a higher elevation where vehicle/equipment inventory can be relocated prior to a hurricane. It is recommended you have signed contracts that reserve your space for the alternative storage facilities.
5. Depending on your business type and size, develop a relationship with a security guard service in order to receive priority treatment for your post-hurricane security needs.
What should be included in your preparedness plan? Zurich suggests the following:
1. If your business has multiple locations, each location should have a written plan.
2. The plan should include a simple list of tasks for all phases of hurricane operations, including pre-season preparedness, hurricane watch, hurricane warning and after the hurricane.
3. Include specifics for the protection of buildings, data, records, equipment and inventory.
4. Provide a hurricane “chest” stocked with essential supplies for each location or department, and make sure all employees know where it is located.
The chest should contain a list of vendor contact information for utilities, phone, sanitation, fuel, security contractors and off-site storage.
It also should include emergency communications equipment; flashlights; plastic bags; rolls of hazard tape; new padlocks and key sets; and prepaid and non-activated phone cards for long-distance calling to manufacturers, employees, family members, etc. Other items that will not fit in the chest, but are good to have, include diesel fuel generators and extra fuel storage containers.
5. Consider which employees will be available to assist with hurricane preparation, as some may reside in mandatory evacuation areas and may not be available.
6. Determine who you want to implement your plan, assigning hurricane preparation tasks to individual employees or teams depending upon the size of your facility.
7. Develop an emergency contact list with 24-hour telephone or cell phone numbers that will enable management to contact essential employees.
8. Communicate a policy that identifies when employees will be released from work, as well as the company’s expectations regarding how and when employees will contact management to determine when they are to return to work.
Hurricane Katrina update -- Dealers recover from the storm, battle other issues
Four years ago, Modern Tire Dealer visited tire dealers along the Gulf Coast who had been in the path of Hurricane Katrina.
Now, five years after the storm, we checked up on the dealers to see how their recovery was going.
His business also has been hurt by insurance costs that escalated following the storm. He says the prices are driving people away from the area. The population in his market has dropped 15% to 20% since Hurricane Katrina, he reports. “No one can afford to live here. We need affordable insurance to help these people. And when the population drops, taxes go up. Fewer people, higher taxes. It’s a double-edged sword.”
Also, the recent oil spill hurt his business, too, by reducing the number tourists who would come to vacation on the waterways. “The oil spill took away our tourism this summer.”
Jimmy Taylor, who owns Performance Tire & Wheel in D’Iberville, Miss., says the first couple of years following the hurricane were difficult, but things are back on track. They have a better perspective now, and the last four months have been very good.
He’s had no change in tire suppliers over the years, preferring to stick with the ones that helped them through the difficult times. (Like the other dealers, he’s dedicated to Bridgestone Americas Tire Operations LLC and Consolidated Tire & Oil in Baton Rouge, La., his distributor.)
Insurance costs are higher, says Taylor — and are worse for home-owners than businesses.
(Concerning commercial insurance costs, Bob Tschippert, head of Zurich’s Global Automotive Industry in the Americas, reports, “One loss event should not be the sole driver of your insurance premium, and a single catastrophic event does not change Zurich’s commitment to serving the insurance needs of tire dealers, as well as businesses in the automotive and trucking segments. Zurich’s approach to underwriting is an integral part of our businesses. We take it very seriously and work to try to achieve a balance between our customers risks and the price of their insurance policy.
“We work to establish a total risk profile that is applicable for each business. We then respond by setting a price that will help achieve the right balance between covering the costs of the risks and having the ability to deliver when it matters. This is why we stress the importance of working with our customers to help minimize the risk factors they can control, so when the unexpected happens, they can focus their attention on dealing with the threats facing their business at that critical moment.”)
David Gray, co-owner of GrayWood Automotive LLC in D’Iberville, notes the local economy is down, business is slow, but “our doors are still open, we’re holding our own.”
And the storm even brought them opportunity for growth. Since Katrina, the dealership has purchased land across the street from the store for more parking, and has added a building to the property that now houses its offices and a vehicle detail shop.
Gray was able to sell the house he bought following Katrina (which replaced the one he lost in the storm), and he and his wife, Anjanette, who is the dealership’s office manager, are looking into buying properties forced into foreclosure.
The oil spill did affect his business this past summer. “We have not seen any tourists. Absolutely none. And they made up a good part of our business. Used to be a couple of times a day, we’d get a call to pick up stranded tourists at their hotels, fix their tires, etc.” With the hurricane, economy and oil spill, “It’s been a roller coaster ride,” Gray says