Wednesday, May 31, 2006

Blow, Winds!

“You cataracts and hurricanoes, spout!” Welcome to the first week of our hurricane season.

Dr Jim Siebert, Director of Meteorological Operations for Weather Insight, says there were 15 hurricanes last year (2005) compared to an annual average of five. Of our 2005 hurricanes, seven were considered “intense” versus the annual average of two-and-a-bit. He expects the current pattern to continue for several years.

(I got all this in a roundabout e-mail from Candace L Renaud, a principal of Renaud Sero Advisors, which specializes in commercial real estate services.)

Siebert also notes that this year weather conditions are prime for another record-breaking hurricane season. Weather Insights, which provides tailored weather services for the energy industry, places the probability for hurricane activity along the Gulf Coast this year at 47%. That’s a lot of risk.

So Renaud created some tips, things that an office tenant can do in advance to help minimize downtime and speed up payment of an insurance claim. Shortened for posting, the tips are:

1. Secure all critical documents, including your lease and insurance policies. Scanning these into a digital format and backing up the information offsite is a good way to insure all documents are safe. Also, securing all documents digitally may help employees working remotely to access critical files and continue working either from home or another city.

2. Secure records relating to tenant improvement expenses if your company contributed to those costs. This information will help expedite an insurance claim if necessary.

3. Make or update equipment and furniture lists. If possible, take digital photos. Secure them offsite.

4. Review lease provisions that relate to damage and destruction to the premises and make sure you follow those procedures if the premises are damaged. This is critical to insuring that rent is abated from the date of the destruction. Typically the tenant is responsible for notifying the landlord (usually in writing) of the damage.

5. If the building or premises is damaged to the extent that the space cannot be occupied, examine solutions for alternative office space.

6. Establish accounting procedures in advance for any possible storm damage. Also, establish procedures for employee payroll and operating capital during any possible downtime.

7. Make sure you have established an emergency communication plan for employees. Know who is evacuating, where and how they can be reached. It will also be helpful to have this information for vendors and sub-contractors.

You should know, I switched No. 6 and No. 7 in Renaud’s tip list because I want to emphasize how critical this disaster communication linkage is. You should know how to reach your people – and they should know how to reach you…in case this year's blows are as bad (or worse) than the last.

I bet the entire set of tips (rather than this shortened version) is yours for the asking if you e-mail Renaud Sero via its website. And thanks to Renaud herself for developing these tips.

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