Disasters – and the stress they cause in the evacuations, impact and recovery phases – have created unhealthy levels of stress for business managers both in the disaster areas and in disaster prone areas like California.
We sat down with Lars Rathje in the Los Angeles office of Lockton, the global insurance brokerage, to talk about what managers and individuals can do to mitigate their losses.
Hurricanes and earthquakes have dominated the news over of the last weeks. What are a business’ obligations to employees in crises like these and how do they insure against these losses?
Organizations have an obligation to protect the physical premises as much as possible and keep employees and the public safe. The insurance side for large organizations is complicated, but well established. All good insurance brokers have run scenarios of losses like the hurricanes through risk models. The tricky part is the pre-loss work of protecting the organizations assets, most importantly their employees.
If you evacuate from an approaching wildfire in California insurance coverage will often pay for your hotel in a safe area. Does that also apply to people fleeing hurricanes?
Most commercial policies do not include coverage for hotels for employees in safe areas. Business insurance is designed to protect the balance sheet of an organization and get them up running quickly. Some policies will pay for hotels near the work site so that employees can be brought in to work when there is no available housing. Some individual and family plans will pay for evacuations and housing/ hotels. This is a great time to check your policy and to make sure you have your insurance information with your other important papers when you evacuate.
Does business interruption insurance apply while your business is either evacuated or out of business during a disaster and recovery period?
Yes, in most cases. Check your policy or call me for a review.