Businesses warned to prepare

One in four businesses never re-opens after a disaster, warned a seminar on the best procedures and practices for recovering after a disaster titled Trading with Disaster.

The seminar was held by the Caribbean Alliance for Sustainable Tourism at the Caribbean Hotel Industry Conference in Miami last week.

CAST is a non-profit organisation undertaking collaborative environmental activities within the hotel and tourism sector. A similar seminar is to be held in the Cayman Islands soon.

Deidre Shurland, Director of CAST commented on the fact that the predictions from the National Oceanic and Atmospheric Administration for this year’s hurricane season, is a minimum of 12 to 15 storms, seven to nine predicted as hurricanes with three to five forecast as intense.

According to NOAA since 1995 there has been a significant increase in storm activity in the Caribbean. She gave climatologists’ reasons as including abnormally warm sea surface temperatures, along with other factors that fuel hurricane activity.

‘Warm sea surface temperatures provide the fuel for hurricanes as they move from east to west across the region,’ she said.

Ms Jennifer Nugent-Hill of Tropical Shipping in St. Croix, US Virgin Islands asked whether delegates’ businesses are prepared to respond to and recover from a disaster.

She cited a Chamber of Commerce, USVI pamphlet brought out to help its member prepare for disasters as saying that one out of four businesses never re-opens after a disaster. This is why an operations recovery plan is needed.

The loss of not having one is too high, she said, as the Caribbean is in a medium- to high-risk disaster area.

She pointed out the hazards the region is at risk of as including hurricanes, earthquakes, volcanoes, tsunamis and even shipping disasters.

‘Our waters have ships passing with every conceivable thing on them. How safe are they and are we prepared to deal with a hazard?’ she questioned.

Other knock-on effects of disasters include fires, flooding, mudslides and transportation accidents. ‘A cruise ship fire in port can shut down an island,’ she said.

The phases of effective emergency plans should include: mitigation measures; the ability to prepare to help minimise disaster damage; the ability to respond and provide emergency assistance; recovery, both short and long term.

Some examples of how to prepare before a storm include knowing how to reach insurance carriers after hours and knowing passwords into your staff’s computer systems, she said.

Stan Smith of Smith Orloff and Associates gave an overview of how to survive a catastrophic loss from an insurance point of view.

He emphasised the fact that if you have hurricane coverage to make sure the policy covers floods not just wind damage, and under flood coverage, to make sure this covers tsunamis.

Under policy conditions he warned people to make sure they understand the difference between being covered for replacement cost vs. actual cost value. Replacement cost is the amount needed to replace or repair your damaged property with materials of similar kind and quality, without deducting for depreciation (the decrease in the value of your home or personal property due to normal wear and tear). Actual cash value is the amount needed to repair or replace damage to your home after depreciation.

‘You’ve got to review your policies in depth and if you don’t understand it, you have to sit down with your broker until you do,’ he said.

In the hostile weather environment the Caribbean is in, insurance cannot be underestimated, he said.

Another important aspect to make sure your business has is consequential business interruption coverage. This is in the event your building may not be damaged, but something causes the loss of business, for instance the loss of power or the closure of an airport or downing of telephone lines. He advises people to buy this to cover for loss of business for at least one year.

Insuring separate buildings on a property separately is also a good idea, he said.

Galen Gritzer of Hospitality Renovations Ltd. which handles the re-building of damaged structures urged businesses to develop a plan with key critical staff for what to do in a disaster.

His list of to dos includes doing whatever possible to secure the life of staff members, putting in measures to prevent theft (including putting badges on personnel so you know exactly who is supposed to be there); securing generators and fuel sources; securing tarps for roofs; securing windows and doors with plywood; keeping a/c running if possible to prevent mildew and mould; developing and maintaining road access; creating holding area for debris; isolating and securing utilities services – main distribution.

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