Summer storms can pose a serious risk for businesses with inventory. In 2019, the Congressional Budget Office estimated commercial business damage from summer storms at $9 billion. Your business may be at greater risk if your product is located in vulnerable warehouses or out in the open exposed to the elements.

These weather risks are hard to predict and can affect your inventory at any point in your supply chain, so it’s important to understand the dangers that exist and properly manage summer storm risks for your business and inventory.

Timing and Threats

Summer weather is often unpredictable. It’s sunny one minute and storming the next. Storm season is long in many parts of the country and businesses face risks from several different kinds of storms.

  • Summer thunderstorms—Throughout the spring and summer in some areas of the country, these storms can come on quickly bringing heavy rain, wind, hail, thunder and lightning. Some storms can be severe enough to spawn tornadoes. Major risks include water intrusion from leaks and flooding, wind and hail damage to structures and exposed inventory, fires from lightning strikes or debris damage from the wind.
  • Flash flooding—The greatest risk of flash flooding is from late spring into early summer, and flooding can occur separately from thunderstorms. Even light showers or snowmelt can lead to flooding in some areas. The FEMA flood map portal can help inventory owners gauge their warehouse and inventory location’s risk to flooding.
  • Hurricanes—Typically hurricane season begins in June and goes through November. Tropical storms, tropical depressions and full-fledged hurricanes can do a lot of damage to inventory, due to torrential rains, high-speed wind, storm surge, flooding and tornadoes. Buildings and product are vulnerable to wind, flood and fire damage. Because hurricanes cause severe damage across a wider area, recovery can stretch to weeks or months, leading to business interruption.

Storms can also occur at any time of the day or night, which can impact your inventory during transit, receiving, handling or storage. It’s important to consider these risks and take steps to protect product from the weather.

Key Steps to Manage Summer Storm Risk

Protecting your inventory involves holistically considering and guarding against the risks you face from several different perspectives.

Insurance

Take time to read your policy documents before a storm hits. Verify that your coverage is up to date, make sure all necessary parties are listed as named insureds, check your limits and deductibles, note your endorsements and exclusions, and make sure you understand the process for filing a claim.

Most inventory insurance covers perils such as:

  • Fire
  • Flood
  • Hail
  • Earthquake
  • Wind

This means you’re protected from most losses due to summer storm damage.

If you have questions about your policy or coverage, contact your insurer to make sure you’ll be prepared for a storm. You’ll want to understand where you are most vulnerable and what steps are required to meet your policy obligations.

Emergency Plans

Emergency response planning can take a lot of the stress out of dealing with summer storms. A plan gives you time to think clearly, ready your organization and practice what actions you’ll need to take during an emergency. These are the key steps:

  • Create an emergency plan, considering facility and staff preparation and emergency team roles, location vulnerabilities, storm prep, evacuation and accessibility after the storm. Ensure proper documentation, employee training and routine drills.
  • Determine emergency supply needs, such as a back-up generator, sump pump and water. Maintain adequate stocks as needed.
  • Keep duplicate records of essential and sensitive documents, either physically or with a digital backup that is technically secured and insured with cyber liability insurance.
  • Be prepared to act when necessary, forwarding calls to a handy mobile phone, moving inventory and other property to a more secure location (policies through Lockton Affinity will cover up to $50,000 of emergency removal expense in the event of an impending storm), unplugging electronics, sandbagging around the building, boarding up windows, or other tasks as you are able.
  • Decide ahead on a communication plan, including notifying vendors, customers and employees of potential delays and setting a point of contact for emergency communications.

Emergency Supplies

Gather the supplies and equipment you will need in a storm now, before you need them. The right gear will not only help you weather the storm but allow you to minimize the damage to your inventory.

Inventory organizations may need these as well as additional supplies:

  • Flashlights
  • Batteries
  • Weather radios
  • First aid kits
  • Fire extinguishers
  • Generators
  • Fuel
  • Sump pumps
  • Tarps
  • Sandbags
  • Plywood panels
  • Floodproofing materials

Supplies should be prepared ahead of storm season and regularly inventoried. Some emergency supplies have a short shelf life and may need to be restocked during the summer storm season.

Partnerships

The right partnerships can help you better manage the risk of summer storms. Working with experts, such as your insurance representative, can help you plan for what-if scenarios to make sure you have the coverages you need. Strong partnerships with vendors and customers can also help you bounce back after damage from a storm.

For more information about preparing for summer storms and protecting your inventory, contact Lockton Affinity.