EXPERT DISASTER PREPAREDNESS TIPS FROM LANCE EWING

Without proper planning, disasters can leave commercial property owners scrambling to recover amid the chaos. Catastrophes, ranging from impending hurricanes to industrial explosions, can halt operations at your office building, retail store, hotel or apartment. However, thorough preparation before a major event can give you a clear path forward for restoring operations.

Lance Ewing, Vice President of Enterprise Risk Management for Cotton Holdings, Inc., has a rich history of disaster preparedness. Through his many years working in the risk management, insurance, hospitality and gaming sectors, he has led many companies in navigating catastrophe situations, collecting a wealth of knowledge along the way.

Based on his executive experience helping organizations prepare for and respond to disasters, he has shared his expert disaster preparedness tips (and some critical errors to avoid) for commercial property owners. Lance has organized his can’t-miss commercial property disaster planning advice into three categories: pre-disaster, during the disaster and post-disaster.

Pre-Disaster Preparedness

You can begin preparing your business for worst-case scenarios well before disasters occur. This first category of preparedness focuses on prioritizing disasters that could occur, sourcing key vendors for recovery and understanding your insurance coverage.

Tip 1: Prioritize Catastrophes Most Likely to Affect Your Region

Lance recommends prioritizing planning for the disasters most likely to affect your business. These disasters can be natural or man-made.

When prioritizing natural disasters, Lance gives the example that if “you’re in Muscatine, Iowa, the likelihood of a hurricane is pretty remote,” but the probability of snowfall and freezing pipes is much higher. Plan for the top natural threats to your specific area. National or multinational companies may need to tailor several plans for the geographic dangers at their locations.

Man-made disasters can include broken sprinkler heads that flood apartments, criminals that cause your place of business to become a crime scene and supply chain disruptions. “Let’s say you’re a restaurant and you own 16 restaurants and you get all of your supplies from somebody in Ohio,” Lance suggests. “But their plant burns down.” In such a disaster, Lance encourages businesses to prepare backup plans and alternative vendors to keep operations flowing.

Prioritizing the most relevant threats can help you refine your scope while planning for disaster scenarios.

Tip 2: Have Your Partners in Place Pre-Disaster

After prioritizing the disasters most likely to affect your specific region, focus on assembling your disaster recovery partners. “Thumbing through the phone book after the loss happens is not good risk management,” Lance adds.

A strong restoration company is a critical first partner to secure. Restoration companies, like Cotton Global Disaster Solutions (Cotton GDS), can help quickly restore your property and mitigate additional losses. These companies provide the resources, expertise and knowledge to recover your facility. Early collaboration may also give you access to pre-disaster planning and year-round support, such as with Cotton’s FirstAlert! Program.

A second partner to establish is your insurance claims adjuster. The claims adjuster will work to evaluate the damage and determine if it is covered by insurance. As an added tip, Lance notes that “you can actually write your claims adjuster into your insurance policy. You’re seeing many corporations do that because it helps the insurance company know which adjuster you’re going to use.”

A third critical partner to line up is a forensic accountant. A forensic accountant may use investigative tactics to evaluate your loss event and identify lost revenue from halted operations. Their approach can help you holistically understand the full breadth of losses your business incurs.

Certain industries, like healthcare or chemical manufacturing, should also consider connecting with the local fire departments so emergency response personnel can understand ingress and egress to the facility, where critical chemicals are stored and other key details that can facilitate a safe, fast emergency response.

In gathering partners pre-disaster, Lance urges business owners to secure a contract outlining the specific details of the partnership when relevant to help expedite recovery and the settlement of insurance claims. With a master service agreement (MSA) in place, protocols and processes can be set up in advance, facilitating a more seamless restoration process.

Tip 3: Find and Read Your Insurance Policies in Advance

An important component of pre-disaster preparedness includes locating and understanding your insurance policies and coverage. After finding the policies, Lance encourages commercial property owners to “have them available and put them electronically somewhere,” as well as to “make sure several people have [them].” Have backup and digital copies to prevent losing the documents in disasters like fires or floods.

Additionally, Lance highlights the importance of thoroughly understanding your deductibles, exclusions and sublimits from your policies and contacting your insurance company for clarification on any you may not understand.

Reviewing your deductibles can help you prepare your business financially by setting aside the necessary funds to cover the amount you may owe for a loss.
Understanding your exclusions — losses not covered by your policy — can help you identify gaps in coverage in advance so you can look for additional insurance policies as needed.
Knowing your sublimits, which are specified maximums of coverage for specific types of losses, can also alert you to areas where additional coverage may be needed.

Your restoration provider may even be able to help partner with your insurance provider for additional help.

By planning before disasters strike, you can set your business up for a more successful outcome if a catastrophe does occur.

During (and Immediately Following) the Disaster

Lance’s second preparedness category focuses on disaster response and the immediate aftermath. Planning can help you navigate the flurry of fast-paced, fog-of-war decisions in a disaster.

Lance emphasizes that the main goal during a disaster is to save human life and “get your people out, get them to safety — that’s the key and critical thing.” He implores commercial property owners to know that “we can always replace and restore new buildings,” but not employees and clients. Prioritize safety in all situations during disasters.

From there, set your business on a swift road to recovery by documenting the disaster damage, immediately mitigating the loss and tracking disaster expenses.

Tip 1: Photograph and Videotape Everything — And Notify Your Insurance

Immediately following the disaster event, document the extent of the damage for insurance as thoroughly as possible. Lance suggests commercial property owners “take photographs and videotape everything — anything and everything” and even suggests that “if you have somebody who’s licensed to fly a drone, get them to [fly] a drone up inside the building and go through” the damage. The comprehensive documentation will provide your insurance with a clear snapshot of your property before recovery.

Make sure to notify your insurance agent or broker and the insurance company itself. “Don’t just do one versus the other,” Lance warns. He suggests putting both on notice and, importantly, documenting the notice provided. “It is not a phone call,” Lance shares. He instead recommends an email or certified letter to have the notice in writing.

Tip 2: Mitigate the Loss Within Hours

In the immediate aftermath of a disaster, commercial property owners should begin mitigating their losses and prevent additional damage from occurring, once it is safe to reenter the facility.

Commercial property owners should learn their utility shut-off locations, including for gas, water and electricity. If a disaster leads to a busted pipe, for example, shutting off water can help prevent losses from worsening if the water were to keep flowing. Further initial mitigation could include putting up temporary tarps on damaged roofs, closing off damaged areas of your property and setting up fencing if needed.

Mitigation can also involve removing valuables from your property. Casinos and banks, for example, need to focus on getting out as much money as possible. Schools and universities, Lance adds, “may have some famous sculptures, famous artwork or famous books written by alumni. Let’s get those to safer ground, let’s get those to a higher place.”

Tip 3: Create a Separate Accounting “Bucket” for Disaster-Related Expenses

As the initial mitigation efforts begin, you should separately document any costs associated with such efforts. Lance suggests an accounting “bucket” set apart for “restoration companies, forensic accountants, payroll [and] all that stuff that’s related to the loss… Don’t just mix it in with your normal, day-to-day P&L sheet.”

Expenses like newly purchased mops, tarps or security protection could all go into a separate category. Lance even points out that "you may have some of your employees come into work and they’re mopping up water, they’re moving stuff around. You’re paying them, but you’re not paying them in their normal role.” This could be another separate, disaster-specific expense that insurance could potentially cover.

By preparing to take key steps during and just after a disaster, you can navigate the rapid-fire decision making a catastrophe can bring.

Post-Disaster Preparedness

A full recovery after a major disaster “will be a marathon, not a sprint,” cautions Lance. Preparing now for a long road to recovery can better equip your company for a strong disaster recovery response.

Tip 1: Rely on a Good Restoration Company

Though the post-disaster recovery can be lengthy, “your marathon can be shortened by having the right restoration company,” Lance shares. Turnkey restoration companies, like Cotton GDS, provide fire and water restoration, construction, roofing and more all from one vendor. These comprehensive solutions can stop additional losses from occurring.

A good restoration company also comes prepared to work with various governmental agencies to help their clients. This includes partnering with the local government or sheriff’s office for the proper documentation to access and do business in different disaster areas legally. Finding a reputable, competent restoration company can mean the difference between a disjointed, drawn-out recovery and a seamless return to normalcy.

Tip 2: Notify Local Authorities of Status and Capacity

If your business plays a critical or large-scale role in your community, you should consider contacting local authorities about your business’ status after the disaster. Lance recommends notifying the police and fire department about your business’ operating capacity. He does note that such authorities “are going to be flooded” with calls and work, “but at least you’ve done your homework of notification.”

Such notification could build trust with first responders, help them coordinate emergency response across the community and aid with resource sharing for those affected by an area-wide event.

Tip 3: Ask Your Insurance for an Advance Payment

To help cover initial mitigation expenses, including obtaining equipment or paying your general contractors, Lance suggests calling your insurance company and requesting an advance payment. After sending your insurance the photo documentation of your loss, Lance recommends that “a week later, you call them up and say, ‘I want an advance,’” to get money for your early recovery steps.

This advance payment could help your business become operational and prevent your claims from ballooning to even larger amounts from additional losses or business interruption, benefitting both you and your insurance. With the payment, you can gain security for your property, pay to pump water out, get blue tarps for your roof and give what is owed to the restoration companies.

Mistakes and Missed Opportunities

In addition to the above catastrophe planning tips, Lance outlines errors that commercial property owners should strive to avoid in disaster preparedness.

Mistake 1: “It Won’t Affect Me!”

One of the key opportunities commercial property owners can miss is failing to prepare at all for possible disasters. Lance says that “no planning is probably the biggest mistake” he sees. Commercial property owners need to prioritize the key disasters most likely to affect their location and plan contingencies for these events.

Mistake 2: “It Won’t Be So Bad!”

Some commercial property owners may consider various disasters but think that such events won’t greatly impact their operations, so they fail to thoroughly plan. They may wrongly think their business can quickly reopen and very little revenue will be lost after an area-wide event like a flood, so planning is kept to a minimum.

A commercial property owner in this situation may find themselves overwhelmed by the extent of damage and recovery they have to contend with after the full force of a disaster. The effects of widespread, community events can impact vendors and suppliers. Without backups and comprehensive plans already in place, the disruptions can result in long-term downtime for a business.

Mistake 3: “Others Will Take Care of It All for Me!”

A final critical disaster preparedness mistake that commercial property owners can make is solely relying on one partner to fully restore their business. “You have to be self-sufficient in some ways,” offers Lance. Commercial property owners must find ways to be proactive and source important vendors, like a good restoration company, ahead of time.

Solely relying on one particular organization, like the federal government, to immediately handle all aspects of the recovery process can leave businesses ill-prepared to continue their operations. Similarly, waiting for insurance to handle all parts of recovery can mean commercial property owners have inadequate resources or a lengthier recovery.

Bounce Forward After Disaster

While planning for disaster recovery, Lance notes that a business may strive to bounce back to normalcy or to where the company was before. However, he suggests commercial property owners should instead plan for “bouncing forward” toward long-term success instead of just getting by.

A bounce back to pre-event conditions may leave a company at its prior level of underperformance. By taking a realistic approach to the full extent of disaster planning, commercial property owners can take steps to ensure their “bounce back” is swift and brings them quickly to a “bounce forward” ahead of their competition after a disaster.

By following Lance’s expert disaster preparedness tips for businesses, you can confidently approach disasters at your facility, armed with the right resources, people and plans in place. In planning for before, during and after the disaster — and avoiding the critical mistakes — you can set your business apart and truly “bounce forward” into a successful, seamless recovery.