A worthwhile investment: each dollar a business spends on hurricane protection reduces loss exposure by an average of US$105, a study by global insurer FM Global has revealed.
“Businesses often wonder if they are getting a good return when they invest in preventing hurricane-related wind and flood damage,” said Brion Callori, senior vice president and engineering & research manager at FM Global. “This analysis has yielded a pretty convincing answer. And the 1-to-105 ratio doesn’t even reflect the business repercussions of a major hurricane loss such as damage to reputation, market share, and shareholder value.”
The insurer analysed estimates for over 10,000 wind- and flood-related investments and their associated reduction in property loss and business disruption exposure for 1,800 clients around the world from 2008 to 2017. These estimates are calculated based on actual losses that have occurred at tens of thousands of properties insured by FM Global.
With the 2018 hurricane season beginning, FM Global advises businesses in hurricane-prone areas to expect twin risks of wind and water.
In order to minimise losses from wind damage, the firm advised businesses to have backup power generators, inspect and repair rooftops, doors, and windows to make sure they’re secured, and put away or strap down vulnerable objects such as rooftop equipment and solar panels.
Meanwhile, to deal with floods, businesses should elevate or seal off valuable equipment, fasten storage tanks, inspect fire protection equipment, and prepare to turn off utilities in times of emergency. The need for sandbags can be reduced by ensuring that flood protection products meet rigorous certification testing standards.
“Any business exposed to flood risk should invest in developing and practicing a flood emergency response plan (FERP). Facilities with well-organized flood emergency response plans have nearly 70% less damage, and resume operations sooner than those with no plan or an inadequate one, FM
Global loss history has shown,” the insurer said.
