Jonathan Edewards

Startling Stats about Business Closures following Extreme Weather

What happens to small businesses that suffer from an interruption of business?

Power outages, water damage, unavailability of employees to report to work, and the inability of customers to access your business could force you to close up shop in the aftermath of a major storm.  What happens then?

The Hartford has published this terrific graphic that demonstrates the importance of comprehensive Business Income insurance protection:

For the full article and graphic, visit the The Hartford’s website here.

 

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OSHA’s new Chemical Hazard communication standards

A timeline for implementing OSHA‘s new chemical warnings (HCS 2012)

Most businesses have chemicals used for cleaning & manufacturing.  OSHA has changed the rules for posting notices of potential hazards.

Keep up-to-date on the “Global Harmonization System” (GHS):

1. Keep employees safer from chemical hazards

2. Reduce the likelihood of fines for non-compliance.

Here’s what you need to do:

Step 1: Take the time now to become educated on the new hazard communication standard requirements by viewing OSHA’s side-by-side comparison document at

www.osha.gov/dsg/hazcom

Step 2: By Dec. 1, 2013, train all employees on the new classification and labeling system.

Step 3: By June 1, 2015, modify your current written hazard communication program accordingly.

Step 4: Also by June 1, 2015, obtain updated safety data sheets (SDS) for all chemicals within your facility. (Distributors have until Dec. 1, 2015, to ship containers and SDS.)

Step 5: By June 1, 2016, modify all labels within your facility to comply with the new standard.

Need help? Call your insurance agent

Call me to get connected with your insurance company’s loss control department.  Your insurance company is interested in avoiding losses to your business and has a “Loss Control” team whose job it is to help business owners prevent accidents and claims from occurring.

Are you screening Job Applicants effectively?

Plan and follow a procedure when hiring

Does your business have a procedure or checklist to ensure that you hire the right employee who is capable of doing his/her work safely and productively?

Hiring the right employees impacts:

  1. Overall safety
  2. Workers Compensation
  3. Likelihood of facing a lawsuit or property loss.

EMC Insurance Companies is sensitive to this employment concern and has created an informational guide that details the benefits of prework screening in the hiring process and outlines steps employers can use to develop their unique and integrated program.

Using appropriate prework screening, you can:

  • Determine whether or not job candidates can safely perform the essential physical demands of the job for which they applied, were selected and given a conditional job offer
  • Use a properly constructed assessment tool that is medical in nature and legally defensible because it is based on measurable task criteria (such as written job descriptions using functional analysis data)
  • Know, step by step, how to establish their pre-work screening policy and measurable protocols.

Get Help.  Your insurance agent is there for you.

Call me and ask for “the Prework Screening Guide,” prepared by the Loss Control department of EMC Insurance.

Keep Your Shorts Dry: Bill & Rita’s Business Continuity Plan Story

Bill owns a dry cleaning and uniform rental business in Beaumont, Texas.

Rita was born at sea, at the tail of an old frontal boundary, where convection and low-level circulation around an upper-level low developed from a little windstorm into a big windstorm.

Rita is Hurricane Rita–a category 5 that hit in 2005.

In our last exciting episode of Edewards.net, we suggested the need for business owners to have Business Continuity Plan, so that they can operate their business in the wake of a disaster.  A business that can get back on its feet quickly can meet the desperate needs that suddenly arise, turning disaster into opportunity.

This is the story of Bill & Rita, and how a Business Continuity Plan played out in real life.

Originally, Hurricane Rita was not forecasted to come near Beaumont. In fact, it was supposed to hit down the coast about 150 miles. But, the weather pattern made a fast change and Hurricane Rita came charging straight through. The entire community evacuated, and Bill’s employee’s scattered across several states.

Though Bill had a rudimentary emergency plan in place, it did not account for power loss or for the shortage of food and supplies after the hurricane. It took Bill a week to reopen his business.

However, when he did reopen, he discovered there wasn’t much of a need for dry cleaning among his customers. There was, on the other hand, a huge need for a laundry service in the community. Local contractors needed clean clothes, so Bill’s company stepped up to fill this demand with a wash, dry, and fold service.

Though many of his employees had made their way back to Beaumont and were ready to come back to work, schools had not reopened yet, so they needed a place where their children could be supervised. To solve this issue, Bill allowed his employees to bring their kids to work. Some of the kids pitched in and worked (perhaps not the best idea from a workers comp standpoint, but probably OK if the activity was very safe, such as folding laundry).  Younger children played in a conference room that was converted into a kid-friendly area complete with video games and toys.

Hurricate Rita

Rita hits the Texas coast

“Though we had a basic emergency plan in place and were fortunate enough to reopen relatively quickly, we knew we could do a lot better,” said Bill.

After Hurricane Rita, Bill immediately took additional steps to be better prepared for the future. As a result, Bill drafted a plan to board up and secure buildings prior to evacuation and created a more in-depth communication program that requires employees to contact their supervisors within 48-hours to let them know their location and a phone number where they can be reached. In addition, he stocked-piled supplies including bedding and linens, hygiene products, and enough food to feed 15 key employees for up to three and a half days. Those key employees, who are critical to getting the business back up-and-running, have been identified and notified, and Bill has worked with local authorities to get them clearance to return to the area early.

Additionally, Bill has installed showers and a natural-gas generator. He also contacted his power provider to arrange for his utilities to be turned back on within 48-hours of an incident.

“I can’t imagine any business moving forward without a plan. If businesses are up and running, individuals can receive a paycheck and the community can stabilize,” concluded Bill. “If businesses are able to recover, the local economy is able to come back. It’s so critical.”

This material is directly adapted from the federal government’s excellent disaster preparedness website, http://www.ready.gov, which provides sample BCM plans and a boatload of other useful information.  Special thanks to Sonia at Golden Eagle Insurance who pointed it out to us.  Thanks, Sonia!

Does your business have an Earthquake Plan?

The Big One hits.   Power is out.   Roads are blocked.   Supplies are limited. 

How fast can your business get back on its feet? 

Can you be better prepared than your competitors?

Could you gain new customers by being ready when other businesses are not?

 

Los Angeles and Orange County California Fault Map

Fault Lines in Southern California

Here are some strategies for preparing for the earthquake, before it hits.

  • Establish a Business Continuity Management Plan (BCM) that takes crisis management, and business recovery, into consideration. If a BCM is already in place, review and update it as needed for earthquake readiness.
  • Consider where your employees live and discuss plans for continuing work.  How will they get to work if routes are blocked?  How will you communicate with them if cell phones & telephones & internet connections are down?  Can you establish and agree upon predetermined procedures that can work around such complications?
  • Brace all tall shelves and cabinets, tall machinery and equipment, or any top-heavy objects that could topple.
  • Brace and support overhead-mounted fixtures, suspended ceilings, piping, heaters, and other overhead-mounted devices.
  • Plan for continuous plant security.  How will you protect your property from looters?
  • Provide auxiliary equipment and energy supplies for critical services such as communications and lighting.
  • Provide adequate support for mainframe computers.  Back up your data at an off-site location.
  • Provide flexible fuel supply connectors to avoid ruptured gas lines, etc.
  • Bolt down and secure fuel-fired appliances, along with any pressurized gas cylinders.

    Insufficiently secured gas cylinders

    Will these gas cylinders break loose of their chains and roll?

  • Provide isolation valves for piping systems.
  • Provide alternate energy sources for vital equipment and services.
  • Plan for customer and client awareness and communications.
  • Provide an alert and warning system for all personnel on the premises.
  • Designate a BCM Coordinator and a BCM Team. Assign responsibility to specific employees for advance arrangements to initiate the plan.
  • Conduct a business impact analysis and risk assessment of the facility and its operations. Upgrade deficient areas.
  • Upgrade the facility to current earthquake codes.
  • Inspect tanks, stacks, signs, and chimneys for deterioration and bracing. Repair and strengthen as necessary.
  • Identify and designate safe shelter areas in the structures.
  • Identify and designate at least two evacuation routes for all areas.

 Next up: What to do AFTER the earthquake hits

Catastrophe in Japan raises Earthquake, Flood Concerns in California

As Californians watch the news coverage and YouTube videos of the devastating earthquake and tsunami that occurred in Japan, many have started to wonder, “Are we vulnerable, too?”

The geology off the coast of Japan is very different from the California coast, so an exact repeat isn’t likely.  However, California is certainly an earthquake zone, and much of Southern California and Central California is vulnerable to flooding.

The fact is: almost all property insurance excludes coverage for earthquake and flood.  That means that your homeowners or businessowners insurance policy will not reimburse you if an earthquake or flood (including tsunami) causes damage to your home or business.

And that exclusion extends to resultant damage, too.  For example, if an earthquake causes your property’s gas lines to rupture, or causes an overload to your electrical system, which sparks a fire, the resulting damage–burned buildings and burned contents–will not be covered by insurance.  The cause of loss in that example is earthquake.  The earthquake caused the fire, and the fire caused the damage to property. Even though fire–by itself–is normally covered, the fire was caused by the earthquake, and therefore all the damage falls under the earthquake exclusion.

Ditto for resultant damage from a flood.

Earthquake insurance can be purchased as a separate insurance policy in addition to your homeowners or businessowners policy.  Although earthquake insurance is very expensive (expect to pay about as much as your standard property insurance policy, or more), and typically will carry a high deductible, an earthquake insurance policy will offer you the reassurance that you won’t lose everything when the “Big One” hits.

Flood insurance, on the other hand, is very inexpensive, and every property owner should purchase a policy, even if the risk looks minimal.  The fact is that every property is located in some kind of a flood zone — it is just a question of whether it is a in a moderate-to-low zone or high risk zone.  About 25% of all flood insurance claims are from moderate-to-low risk areas.

Many property owners believe that in the event of an earthquake or flood, the government will step in and provide disaster assistance.  This is true, but only if the President declares a disaster, and even so, Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, the monthly payment would be around $240 a month ($2,880 per year) for 30 years, in addition to the mortgage loan that is still owed on the damaged property.

Insurance can be purchased quite easily, and it’s the best way to protect the time, energy, and money that you’ve invested in your property.