Winter hazard awareness – why preparation is vital
“When talking about business resiliency programs and understanding how organizations can thrive through adverse business conditions, reminding business leaders about complexities that can arise from winter weather is key,” he said.
Alongside the logistical challenges caused by the pandemic, supply chain and workforce shortages are amplified during periods of hazardous weather.
“The value of establishing and maintaining a holistic risk management program, anchored in preparedness, is high,” Hernandez continued. “From an underwriting standpoint, that starts the analysis, and when weather events are considered, the impact it has on a business gets amplified – it’s a tipping point.”
Winter weather events continue to evolve across America, as exposures such as ice are becoming more prevalent in locations that were not necessarily a part of the conversation before.
“It becomes important to examine potential business disruptions and how they prepare to absorb the shockwaves of those disruptions,” he added.
Adaption is the next steps businesses need to contemplate.
“Clients need a risk management element that includes business resilience and winter weather,” Hernandez mentioned. “Typically, we’ll hear that businesses are well prepared for hurricanes and wildfires; equally, winter weather can be very disruptive.”
Companies that incorporate all potential weather-related exposures into their risk management structure, business continuity plan and crisis management programs, will likely receive better responses from underwriters.
From an underwriting perspective, Hernandez noted that three things stand out the most when it comes to winter weather and resilience: region, building characteristics, and the reliability of power supply for a business.
“Given the sensitivity of certain business operations, if power is down for minutes, it matters,” he emphasized.
Having a robust understanding of how essential the power supply from a utility is to a business is critical for underwriters.
“In the past, I would say that power supply wasn’t typically included in the discussion, but it has grown in importance,” said Hernandez. “Underwriters are starting to have conversations about utilities and power distribution, and where a business will fall in the priority level from a restoration standpoint.”
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If a business is reliant on automation or robotics, backup power resources and making arrangements to establish agreements with local third-party power providers should all be a part of their risk management approach.
The need for owners to understand the risk profile of their business has increased in importance as regional landscapes adapt to climate change and unprecedented weather events occur.
“As risk profiles change, the call to action about how underwriters assess change shifts as well,” Hernandez said. “Following risk assessment, businesses can then make decisions about what strategies they need to implement, and what level of business resiliency will be adopted.
“It starts with planning and ends with being able to mobilize as soon as possible.”