Are your small and mid-sized clients ready for an emergency?

Opportunity abounds for property and casualty insurance professionals to advise Canadian small and mid-sized businesses on how to plan for natural catastrophes, says an industry claims veteran.

After a year in which Canada’s P&C industry handled more than 270,000 insurance claims to repair almost $9 billion in fire, flood and hail damage, small and medium-sized businesses need advice from their brokers and insurers on how to build emergency response plans, says Joe Turcotte, executive vice president of insurance services at First Onsite Property Restoration.

“For large facilities, their insurance companies are visiting, they’re sending out engineers, and they’re walking [their clients] through their preparedness,” Turcotte tells CU in a recent interview. “But those midsize and smaller locations, they’re not getting visits. They’ve got to rely on their broker to give them some advice, or maybe their insurer will flip them some information.

“But just having an emergency response plan in place is critical, and that’s something so many companies don’t think about. They don’t know where to start.”

One part of that planning process is to identify things the business can do in advance to prevent damage, Turcotte says. For example, a business can check free online flood maps available to see if they are at risk of water damage.

Taking this into account, a contingency plan could then call for some elementary measures such as raising critical equipment or stock off the floors to avoid flood damage, blocking water access through doorways, and having barriers available to stem the tide of water from entering the building in the first place.

Consider the August 2024 Calgary hailstorm, which caused more than $1 billion worth of damage to cars — with almost half of the damaged cars being total write-offs, according to Insurance Bureau of Canada. A simple preventative measure would have been getting the cars indoors and under protective covering. Many storms come with enough advanced warning to take such simple evasive action, Turcotte says.

Also in the news: An asteroid could hit Earth in 2032: Are insurers prepared?

On the subject of wildfires, he says, “We’ve seen a lot of clients that have not really thought about the combustible loading adjacent to their facility. They keep their buildings in shape, but then they haven’t looked at whether there is debris on the roof or do the gutters need to be cleaned out?”

Cleaning vents is also important. “We’ve seen a number of fires that get started because embers get into a vent that’s not cleaned out, and that will just blow the fire into the facility,” says Turcotte. “We had a massive fire at the Olympic Stadium in Quebec, where a fire was started outside the air intake, and that’s turned into a massive, massive claim.”

Other possible fire exposures include outside gas tanks or exposed gas lines. One important thing to include in an emergency plan is how and when to engage automatic emergency shutoffs.

All of these measures may “seem obvious after the fact — when you’ve had a flood, for instance,” Turcotte says. “But people need to think about it beforehand. Who’s going to do [these measures]? And when are they going to do it?”

Another critical part of emergency planning is knowing where to get help. That means having the right vendors on speed dial. Turcotte says it’s important to vet vendors and ask them questions about their services.

“There’s are a number of good vendors available,” he says. “You will want to ask them, ‘What can you do? How fast can I expect you to be here? Where are you going to put your equipment?’

“All those kinds of things need to be considered.”

And with small and mid-sized businesses, Turcotte says, there should be thought around, “How do I keep my business running?” during a crisis, and “How do I not lose my customers to my competitors?”

Plus, what happens if the disaster happens to a key supplier? Businesses should be asking themselves, “Where am I going to source what I need to continue operating?” Turcotte says.

An emergency plan will answer all of these questions in advance. And brokers and insurers can help their clients put these plans together, Turcotte says.

Feature image courtesy of iStock.com/kickers