One of the most active months in terms of hurricanes and tropical storms along the United States’ east coast, August marks the anniversaries of two of the most devastating storms ever to strike the commonwealth – Hurricanes Camille and Gaston.
First knocking on Virginia’s doorstep 50 years ago on August 19, 1969, Hurricane Camille – one of just three storms ever to make landfall as a Category 5 hurricane – killed 153 people and caused nearly $1 billion worth of damage, when adjusting for inflation, in the Commonwealth alone.
Just over 35 years later, Hurricane Gaston hammered the central part of the state, dumping nearly a foot of rain in some areas and leaving much of Richmond underwater. More than 120 local roads, including parts of Interstate 95, had to be shut down due to flash floods. Several buildings in the downtown area had to be condemned and at least 1,000 residents were forced from their homes.
While the 50th and 15th anniversary of Hurricanes Camille and Gaston, respectively, should serve as an opportunity for remembrance, Robert N. Bradshaw, a veteran insurance expert and president and CEO of the Trusted Choice Independent Insurance Agents of Virginia, says they should also provide local business owners a grim reminder of what Mother Nature is capable of producing.
“Even 15 years later, many businesses around Richmond are still feeling the lingering effects of Gaston,” Bradshaw said. “But what’s more troubling is that many of those affected businesses are no longer around at all, and not because of poor business practices, but because of the effects of the storm itself.”
According to FEMA, an estimated 40 percent of businesses affected by a natural disaster never reopen. In addition, another 25 percent end up failing within the first year following the disaster. Bradshaw said that no business, regardless of size or location, is immune to these dangers.
“While small businesses are especially vulnerable to the effects of hurricanes and other natural disasters, even massive corporations can see the damage a storm can have on the manufacturing, supply chains and communications that are so heavily relied upon to serve customers and clients and generate revenue,” he said. “For these reasons, it’s critically important that businesses take the necessary precautions so that they do not find themselves a part of that 65 percent of businesses that fail within the first year after a storm hits.”
The Commonwealth of Virginia State Corporation Commission Bureau of Insurance issued a statement earlier this month that urged businesses to plan now for natural disasters, and Bradshaw said he hopes local business owners take the SCC’s message to heart.
“Throughout my career in the industry, I’ve found that a great deal of policyholders, both individuals and businesses alike, sometimes fail to understand what is included in their policies and, more importantly, what is not,” he added. “In the event of a claim, knowing these things and being prepared can be the difference between simply paying your deductible or facing tens of thousands of dollars in out-of-pocket expenses, or worse, closing your business’s doors for good.”
For example, standard policies do not typically cover flood damage, which is often a byproduct of hurricanes. For this reason, Bradshaw said it’s critical that all Virginians re-evaluate their plans now so that they’re not left out in the storm.
The SCC advocates that most businesses, especially those in high-risk areas such as designated flood zones and coastal areas, consider business interruption insurance, which covers the loss of income a business might experience following a natural disaster. It also recommends considering separate automobile insurance policies, since standard business insurance only covers real property.
The most important thing, experts say, is reviewing insurance coverage regularly and adjusting it, as needed. According to the SCC, understanding your policy, what it covers, and how much you will need to make necessary repairs and continue to pay operating expenses in the event of a natural disaster, should be of utmost importance.
“How you plan for, and deal with, disasters can determine whether your business survives,” Virginia Insurance Commissioner Scott A. White said in the SCC’s statement. “Having the right insurance coverage and keeping it updated regularly is a must when preparing for the unexpected.”