Disaster Recovery Journal

come of the disaster. Those who elected not to evacuate for Hurricane Katrina, for example, contributed to it becoming one of the deadliest hurricanes on record. We should take responsibility for our own safety, and that means supporting the safety of others. Similarly, those who consider their actions as only pertaining to themselves are probably less likely to make decisions that may benefit the company but generate additional effort or difficulties for the person making the choice.

In contrast, what do you see in someone who does pay attention to disaster preparation advice? Those who responded to the threat of Hurricane Irene loaded up on water and non-perishables; stocked the home with flashlights, batteries and candles; secured windows, cars, and outdoor furniture; and heeded the advice of authorities and evacuated where recommended. Those with social media savvy leveraged the power of their networks to quickly share information during the storm and, afterward, organize grassroots relief efforts, do-it-yourself movements, and local fundraisers.

This type of behavior demonstrates a choice to be proactive about responding to problems, a sense of personal ownership over circumstances, and a desire to be a responsible and helpful member of the community. It is the sum of these individual efforts toward preparedness that makes cities, and thereby families, offices, and neighborhoods, better able to face the event and aftermath of disaster. While many may view such preparatory efforts as wasted time and money due to the lack of widespread damage from Hurricane Irene, these actions indicate one’s capacity to successfully manage many more problems to come – in the home and in the workplace.

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Alison Kashin is the chief creative and technology officer for Lootok, a specialized business continuity practice based in New York City, with support from consultants around the world. Lootok’s team, an integrated force of seasoned business continuity experts and specialists in related fields, offers a cross-industry approach to engage people in ways that traditionally the world of risk doesn’t consider.

 INSURANCE

Insurance Recovery for
Businesses with Tornado-
Related Damage and Losses

By NICHOLAS J. ZOOGMAN & KENNETH BERLINE TROTTER

According to the National Weather Service, 800 tornadoes are reported nationwide in an average year. This results in 80 deaths and more than 1,500 injuries. The tornado season of 2011, however, was one of the most active and deadly. There were more than 1,200 tornadoes and 568 deaths. This year the tornado activity in the United States was also widespread — impacting states in the central, south, mid-Atlantic, and northeast regions. Beyond the tragic loss of life and property suffered by individuals and families, these tornadoes left small businesses and corporations in dire financial need as a result of property destruction and interruption of commerce.

Faced with great economic losses, communities impacted by tornadoes should carefully determine whether they have insurance that may apply to the resultant losses or damage and actively pursue that coverage in order to maximize the recovery that is provided by the applicable insurance policies. Businesses that managed to elude damage from the storms of 2011 also should take stock of their coverage to assure they have adequate coverage for any future tornado or other natural disaster that could impact their business.

1. What Types of Insurance
Policies May Cover Tornado
Damage or Loss?

Businesses that suffered property
damage or loss of business income as
a result of a tornado should review all
of their insurance policies for possible
sources of coverage. First-party property
policies may provide coverage. Policies
covering “event cancellation,” “environ-
mental,” “maritime,” or “warehouse”
losses may also provide coverage. A
policy does not have to specifically say
that it insures tornado damage in order
to provide coverage. Under an “all-risk”
policy (in contrast to a “named perils”
policy), once the insured shows they
have suffered damage it becomes the
insurer’s obligation to prove that the
damage is specifically excluded from
coverage. “Named peril” policies may
expressly provide coverage for wind-
storms such as tornadoes.

2. What Insurance Coverage May
Be Provided for Damage or Loss
Caused By a Tornado?

First-party property policies typically provide coverage for physical loss or damage to both real and personal property. In addition, property policies also usually provide coverage for expenses incurred by the insured to prevent, mitigate, or minimize the effects of a tornado on the insured property such as boarding up windows or covering roofs damaged by winds to prevent additional damage. Many policies contain clauses specifically covering such “loss prevention” or “sue and labor” expenses, and the common law in many jurisdictions may obligate insurers to reimburse those expenses. Costs to remove, clean up, and dispose of debris after a tornado may also be covered.