Business at risk: 5 intense hurricanes are forecast in the Caribbean

According to the forecasts of the National Service of Meteorology of the USA, 16 tropical cyclones are expected in the Caribbean for the 2019 hurricane season. Of this total, five could be intense, four would be moderate hurricanes, and seven would reach the category of tropical storm.

According to a press release, the conclusions of the Global Risk Report 2019, published by the World Economic Forum in collaboration with Marsh & McLennan Companies, the adverse effects of climate change and extreme weather conditions are among the five main risks with higher probability of occurrence and impact, which would undermine the physical, economic and reputational integrity of the companies.

Each climate event causes unique damages; that is why it is essential that companies have a preventive plan that mitigates a subsequent crisis. This preventive plan may consist of:

• Know your risk exposure

Before the arrival of the hurricane season, it is essential to know that not all risks are transferable (insurable), so it is vital an adequate analysis of the dangers of each company to determine the insurable and those that by their nature are not transferable, although it is possible to mitigate them.

• Determine the scope of your policy

Before the arrival of the emergency, it is imperative to understand the terms, coverage areas, and specific aspects of your insurance policy. It is recommended to establish service protocols with your insurance advisor and the insurer to review processes and steps to follow in situations of a claim.

• Know the state of the property where the company is located

In case of any risk situation, it is recommended that you have an inventory of the current condition of the properties with the objective that the policy or insurance that is under analysis for payment, is adequate and that covers the possible damages.

• Investigate business continuity plans

A storm could affect the operations of companies and suppliers due to unexpected situations, for example, lack of energy, cutting of telecommunications, obstruction of roads and ports, among others. That is why it is advisable to have alternative partners and parallel shipping methods to avoid possible interruptions in the supply chain.

• Explore innovative solutions

Traditional policies are no longer the only solution: parametric insurances, or those based on pre-defined historical parameters, are gaining ground due to their simpler adjudication processes and faster payment. Parametric insurance is designed as a complement to traditional insurance policies. Its use and strategic effectiveness vary according to the needs of each client.

• The work team is always first

If a business is affected by a storm, employees and their families are likely affected as well. Before a storm, it is recommended to instruct them by defining crisis management procedures and thus prevent any accident involving human losses.

The hurricane season officially began on June 1 and will end on November 30, hence the importance of having a plan that mitigates risks within companies and their collaborators, especially in the areas that could leave more affected.