This is about risk mitigation. To increase the chances that a loss will not shut operations down permanently, organizations must assess their exposures accurately by asking some questions.
- What is the most the organization could lose from a shutdown? Commercial Property insurance policies define “loss of income” as the sum of the expected pre-tax profit or loss and necessary continuing expenses. For example, if the expected profit is $300,000 and necessary continuing expenses are $100,000, the potential loss of income is $400,000. To calculate their exposure to business interruption losses, organizations should refer to their balance sheets, profit and loss statements, and cash flow statements. Insurance companies also have worksheets available to assist with the calculation.
- How much insurance should be carried? Once the organization knows the dollar amount of its exposure, it must decide how much Business Interruption insurance to buy. The key considerations are the length of time the insurance is likely to apply and the coinsurance percentage the organization must meet. Coverage usually begins 72 hours following the damage to the property and ends when business resumes at another location or when the building should be repaired with reasonable speed, whichever occurs first. If the organization decided that the coverage period would be around six months, it could buy an amount of insurance that would satisfy a 50% coinsurance requirement. If the interruption would last longer, higher coinsurance percentage and limits would be necessary.
- How long will it take business to return to normal? Even after operations resume, it could be some time before revenue returns to normal levels. Customers who had gone elsewhere during the shutdown might be slow to return. The standard insurance policy extends coverage for 30 days after operations resume, but some businesses might need more time than that, especially if their businesses are seasonal. For example, a seaside restaurant in New Jersey that makes most of its profits during the summer will need additional coverage even if it can re-open in November.
- How much of the normal payroll expense will continue during the shutdown? The organization will need the continuing services of some employees while it attempts to re-open, but other employees might not be necessary. For example, accounting staff will be needed to pay mandatory expenses such as property taxes and collect receivables earned before the shutdown. Employees who stock shelves will not be needed if there are no shelves to stock.
- Does the business depend on other businesses for revenue? A business can suffer a loss even if its own building is untouched. A loss that shuts down a key customer or supplier or damage to nearby property that causes authorities to close off access to the street can devastate a business’s bottom line (this happened to many businesses affected by 9/11). Special insurance coverage is available to protect against this possibility.
Our insurance team can help you answer these questions and identify insurance companies that can meet coverage needs. With some effort and planning before a loss happens, an organization can emerge from a shut down and return to profitability.
As the fires rage in Northern (and Southern) California, a topic like this is worth writing about. Earthquakes are always a threat, but floods, wildfires, hurricanes, and such are more apt to strike in the warmer summer months.
Please be safe and healthy.
There are three very important steps you can take to limit the effect natural disasters have on your life and property and expedite your recovery process.
1. Planning. There are some basics that any natural disaster plan should include:
- Always have several escape routes mapped out. Each family member should know where to meet, who to call for help, and where to call to signal their safety to other family members. Your family safety plan should be posted in a central location and the escape route and emergency contact numbers should be reviewed every six months.
- If possible, store irreplaceable items and documents like birth, marriage, death, and divorce certificates; passports; deeds; social security cards; expensive jewelry; and heirlooms in a safety deposit box during high-risk seasons if you live in an area frequently hit by natural disasters. You may also put video or photo documentation, a listing of serial numbers, appraisals, and receipts for these items in your safety deposit box.
- Scan your photos to your computer. You can store your photos with an online storage service or make a CD to place in your safety deposit box.
- You should have an emergency overnight bag ready to go for every person and pet in your family and always keep a credit card, emergency cash supply, and personal identification with you during high-risk seasons.
As far as disaster-specific planning goes, here are some key points:
Flood planning. Many people live in possible flood areas and don’t realize it. For example, those living in areas that recently had a wildfire and those living downstream from a dam could have problems with flash flooding. Those living in or near a construction area could find their risk of flooding increased due to changes in water flow patterns. You can assess your risk of flooding by contacting your local building authority and your insurance agent. Since basements aren’t usually covered by typical flood insurance policies, those with a basement need a plan on moving their valuables to upper-levels. Do make sure that you have an escape plan, as discussed above, in place for your family.
Hurricane planning. Most people in areas prone to hurricanes are already on high alert during hurricane season, but do keep in mind that hurricanes and the stormy remnants are often unpredictable. The flood planning from above is applicable to hurricane planning. Additionally, you’ll want to have a supply of nails and plywood ready to go so that you can board-up your home before evacuation. Remember, if your local authorities issue an evacuation, then you need to heed it.
Wildfire planning. Wildfires can begin unnoticed and spread rapidly with little forewarning. An effective evacuation plan is vital in many cases. If you do have forewarning, then stay tuned to the emergency broadcasts and follow the evacuation directions from local authorities. Remember to take your emergency evacuation bag with you.
If you’re under a warning, but haven’t been advised to evacuate yet, then you might have time to turn off your gas lines and propane tanks, soak your roof and shrubs with water, move flammable furniture to the center of rooms, and move large valuables to the safest location possible.
Tornado planning. Unlike many other disastrous events, leaving your home during a tornado warning is seldom a wise move. Everyone in your family should know where they should go during a tornado warning. While a basement is ideal, not everyone has one. You can use a central room; preferably one that doesn’t have windows or overhead objects. Be sure your emergency kit and phone numbers are in your designated room.
Earthquake planning. Follow the directions from tornado planning. You might also want to place an emergency kit in your vehicle and at your place of employment. Check to make sure your child’s school is also well-prepared.
Aside from living in an area not prone to natural disasters, there isn’t much you can do to avoid them. However, unlike most other natural disasters, wildfires can sometimes be prevented. You can personally prevent fires by being careful when using open flames, maintaining your chimney flue, and not throwing cigarettes outdoors. Of course, wildfires can happen regardless of your personal care with fire.
You can help to prevent flames from impacting your home by creating a defensible space. In fact, some insurers are now inspecting properties for defensible space before issuing or renewing policies. Your insurance agent, local agricultural organizations, and federal agencies like the American Red Cross and FEMA are valuable information sources on creating defensible spaces. The damage of flooding can also be limited by planning water diversions and landscaping as protective devices.
Last, but certainly not least, you should make sure your existing insurance is providing adequate protection. For example, your regular Homeowners policy most likely won’t provide coverage if a boulder falls or rolls into your home since such would be considered an earth movement and need to be covered by Earthquake insurance. Another example would be your regular Homeowners policy not covering damage from a water or sewage system outside your home breaking, or damages from a flash flood, as these would fall under Flood insurance. If you obtain Flood insurance, keep in mind that the coverage won’t become effective for 30 days and your basement usually still won’t be covered.
With COVID-19 forcing non-essential workers to work from home, home prices are seeing an upward trend. Recent builders reports are showing a fast upward trend in new construction.
Inventory is dipping, prices are going up and people are looking to upgrade to slightly bigger homes so that they can work from home comfortably.
Most have heard the wise adage about not judging a book by its cover. However, like it or not, first impressions are lasting. For example, a potential buyer pulls up to your home for sale. Their initial judgment is based on if they like what they see on the exterior, or curb appeal. Since most buyers won’t even get to the interior if they don’t like the exterior, first impressions are of the utmost importance concerning real estate.
Updating the exterior of your home is an excellent way to add curb appeal to older, drab, and outdated homes. This is true whether you’re building equity in your home over the long-term, planning to sell, or just looking for a DIY project. The cost, time, and labor associated with curb appeal projects vary greatly. That said, there are multiple weekend warrior projects that will give your home a simple facelift, but not break your back or wallet during the process, such as:
1. Front Door. Replacing a worn, outdated door can add instantaneous curb appeal with just a few hours of work. A decorative door with hand carved elements or glass work can add interest and help set your home apart. A cheaper option is to update your existing door with a bright, fresh, complementary paint color. In most cases, you shouldn’t be afraid of bolder colors that, again, can help set your home apart. You can always consult a color expert or decorator if you’re unsure about how a color will work.
2. Entry Way. Consider staining or painting your concrete walkway, porch, and/or steps at your home’s entry, but be sure that the paint/stain you select at the home improvement store is specifically for concrete. You can rent or buy a power washer to thoroughly clean stone and brick entry ways. You can use paving stones, stepping stones, or brick to make a quick, relatively inexpensive walkway if you don’t already have one.
3. Trim, Shutters, and Molding. Adding a fresh coat of paint to the trim that frames your windows can help give your home character, an eye-catching pop of color, and highlight the size and number of windows. Adding shutters or window boxes can give the home some dimension and depth from the street. You might also consider adding prefabricated molding. It comes in a variety of different styles and easily attaches to the front of the home.
4. Greenery. Adding some attractive greenery is a cheap, quick, and easy way to add curb appeal. It’s okay if you don’t have a green thumb. Plant nurseries carry a variety of low-maintenance, ready-to-plant or ready-to-hang plants that will require little of you. On the other hand, if your yard is looking more like a jungle than a yard, then it’s time to get the yard equipment out. Foliage can be an asset when it’s complimentary, but can easily become a negative when overgrown and obstructive.
5. Welcome Home. Add some welcome home accessories that match the style of your home, such as light fixtures, a porch swing or seating area, door knob, mailbox, and welcome mat.
Working in high temperatures, humidity, under direct sun, in high indoor radiant heat, or with limited air movement increases your risk for heat stroke and dehydration. You could then experience fatigue, confusion and difficulty concentrating, a dangerous combination.
Drink several glasses of water in the morning. Start your day hydrated.
2. Drink before you’re thirsty.
If you wait until you feel thirsty to take a drink, you’re already on your way to being dehydrated. Plan to drink one cup of water every 15 minutes so you can stay hydrated all day.
3. Carry extra water.
Pack an insulated water bottle on your tool belt or wear a hydration backpack. You’re more likely to drink enough water when it’s accessible.
4. Choose cool not ice water.
Ice water tastes refreshing, but it causes your stomach to constrict and reduces your fluid absorption rate. Drink cool rather than ice water to improve hydration.
5. Limit caffeine.
Caffeinated beverages like soda, coffee and energy drinks have a diuretic effect that contributes to dehydration. Choose decaffeinated beverages or water instead.
6. Avoid alcohol.
Alcohol acts as a diuretic, which can dehydrate you. Avoid drinking alcohol within 36 hours of your shift to also avoid dehydration.
7. Remember to eat.
Although food won’t replace water, certain foods do contain water. Eating also stimulates your thirst response and prompts you to drink more, so take meal and snack breaks during the day.
8. Drink electrolytes.
When you sweat, you lose beneficial electrolytes. Replenish your body with a carbohydrate-electrolyte drink.
9. Monitor your urine.
Your urine can indicate your hydration level. Aim for pale urine.
10. Work smarter.
Schedule physically demanding tasks for early morning or later in the day when the temperatures are cooler. You can also share duties or rotate demanding jobs with a co-worker, and take frequent breaks.
11. Dress appropriately.
The clothing you wear can help you stay cool and avoid heat stress. Choose lightweight cotton that promotes airflow and avoid synthetic materials that trap heat when possible. A sun hat can also protect you.
12. Get a physical.
Use your health insurance coverage to see your doctor before the summer heats up. Talk about your specific health, job and ways you can stay hydrated and healthy all summer.
On the construction site this summer, you can stay hydrated and avoid heat stress when you drink enough water. Use these tips to protect yourself as you work.