Summer can be an unpleasant time along the Gulf Coast for many reasons: sweltering heat, mosquitoes and the bigger problem of hurricane season. Somewhere in the back of your mind is the never-ending question, “I wonder how hurricane season will turn out this year?” Trying to run a successful business and throwing a storm in the mix can make for a bad situation. Fortunately, basic preparation before or shortly after the season begins can help mitigate problems should disaster strike. While certainly not an exhaustive list, below are a few helpful ideas, not in any particular order, to consider preparing your business for when catastrophe strikes.

• Take inventory. If you’ve ever moved, chances are you understand just how much stuff can accumulate over time. A business is no different. Whether you hold a large inventory or not, simple items like office furniture and equipment can add up very quickly when you have to completely restock your entire office. Not to mention the value of your building itself. Knowing what you have, and stand to lose during hurricane season, will help you greatly in the next step.
• Speak to your insurance provider. Now that you have a better idea of what and how much you have, are you fully covered? Speaking to your insurance provider before hurricane season begins can alleviate some of the stress when on the road to recovery Almost 40 percent of small businesses never reopen their doors after a disaster, according to the Federal Emergency Management Agency (FEMA). Only 23 percent of 2,300 small businesses nationwide had business interruption insurance, according to a survey by Womply in the fall of 2017. Some insurance policies cover money spent for loss avoidance measure, such as sandbags and water pumps, and your provider can tell you what is available to you once you start preparing your physical properties.
• Prepare your property. Just a little water can ruin a great deal of things. Computers or other electrical equipment should be unplugged and elevated off the floor by placing them on top of the desks. Emptying the bottom level of bookshelves and filing cabinets is not a bad idea either. And, if possible, anything valuable and worth saving could also be placed on the second story of a business if floodwaters could be a potential problem. And don’t neglect outside; Whether it be patio chairs or umbrellas, benches or parking lot signs, loose items can cause problems during a catastrophe. Other simple suggestions, such as window covers or even cleaning the office gutters to avoid water build up, can go a long way.
• Take pictures. No one wants to fight with insurance companies during hurricane season, and insurance companies don’t want to have to fight with us. Taking pictures – even consider video on your smartphone – inside and out can serve as evidence later to help with value appraisals.
• Assess your operations. While not all business may have this ability, some businesses have the ability to work remotely and offsite. Knowing your key employees and functions and having some functions still running may take some planning, but if possible can once again save large headaches later. Not to mention, planning ahead and having this ability can mitigate a large potential loss of revenues during times when your business may be out of service, such as during hurricane season. Other ideas for productive use of time during down times could include taking continuing education (in another city not affected) or even being able to host meetings via facetime that could otherwise occupy normal office hours.
• Practice. Knowing your operations and performing them at the office can be a very different experience when trying to perform them remotely and miles away. Simple tests of remote systems can prevent an inability to perform those functions later. Having your IT specialist helping you through an issue in person is also a much more convenient task than having to try diagnosing those problems on the fly and separated as well.
• Data Data Data. With the advancement in technology, data can be protected and stored in a number of locations. Whether that be on a service provider’s cloud network or purchasing a portable hard drive to store key documents. There are plenty of options to ensure no important data is lost. While having a hard copy of your insurance policy ready to grab at a moment’s notice is a good idea, it’s also advisable to have a version saved in the cloud for easy access. Keep documents in a safe place. This includes bank statements, tax returns and insurance policies. This is especially easy now since many financial institutions provide statements and documents electronically. If original documents are available only on paper, taxpayers should scan them. They should save them on a DVD or CD, or store them in the cloud.
• Make a plan! Do employees need to make sure they have certain equipment before they leave, such as laptops or other hardware? How much time will employees, and yourself, need to prepare their own families for the incoming storm? Has your location been ordered to evacuate? Waiting for the last minute to make a decision can lead to poor decisions and issues that could have been avoided now having to be dealt with. As the old saying goes, if you fail to plan, you plan to fail!

While these tips won’t necessarily prevent damage or business interruptions, they can help you be better prepared to handle the potential post-storm insurance claims. Remember, the key to accurately evaluating a loss claim is the ability to obtain complete financial information regarding the claimant/insured’s occupation or business. The mutual goals of the insured and the insurer are to mitigate loss, return to normal operations as quickly as possible and resolve the claim in a reasonable period of time. All this should be done while maintaining positive professional relationships with all who are involved.

The Ericksen Krentel team’s experience reviewing claims involving a variety of industries affords us the skills and depth of experience to provide you with a realistic and effective valuation of a business interruptions claim. That includes helping to obtain documents to support or refute a claim, reviewing the relevant documentation to form an initial assessment of the case and identify areas of loss.

Providing a little bit of effort before and during the early phases of hurricane season can save you a lot of time and effort after disaster strikes. While you certainly can’t avoid them all together, we at least have some time to prepare. So, don’t let the next storm catch you off guard. The old saying “an ounce of prevention is worth a pound of cure” really does apply here.

About Ericksen Krentel

Ericksen Krentel CPAs and Consultants, founded in New Orleans, Louisiana in 1960 with offices in New Orleans and Mandeville, believes that serving as the clients’ most trusted adviser is grounded in going beyond the numbers.

That includes helping clients achieve their business and personal financial goals by providing innovative and exceptional services in the following areas: audit and assurance services, tax compliance and planning, outsourced CFO services and business valuations for a variety of industries; employee benefit plan audits; fraud and forensic accounting; business planning; IT consulting; loss calculations; and estate planning.

Learn more at www.ericksenkrentel.com.

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