Herzlich writes the Small Business column in Newsday.
Anthony Arpino, owner of Sorrento's in Long Beach, is as ready as he can be for the next big storm.
Arpino, who has been rebuilding his 15-year-old Italian specialty store since superstorm Sandy, has elevated his refrigerated cases off the floor, moved refrigeration compressors onto the roof and invested in new double-insulated doors to replace the ones that were destroyed. He's hoping to reopen in time for the July 4 holiday.
"I've tried to do what I could because I can't lift the store up," says Arpino, 46. "I'm trying to limit the damage if the water comes again." And given the active hurricane season experts are predicting this year, he appears to be making a wise choice.
There's the potential for three hurricanes to make landfall in the United States this hurricane season, which began June 1, according to an AccuWeather forecast. And local continuity and disaster experts are encouraging businesses to start planning now and not wait until another major storm occurs.
"Think mitigation and preparedness," says Walter Oden, Long Island branch manager for the U.S. Small Business Administration, who recently addressed more than 60 attendees at an emergency preparedness seminar hosted by Nassau County Executive Edward Mangano. "We've had just about every natural disaster except for a typhoon."
Payouts may not cover youSandy was an eye-opener. In the storm's aftermath, the SBA received 2,732 applications for Long Island business disaster loans, approving 746 loans totaling about $74.1 million to date Islandwide, says Oden.
But not all businesses qualify for those types of loans, and many were left haggling with insurers and footing a large part of the bill themselves.
Arpino is still negotiating with insurers on payouts; to date he said he has received about $12,000 in insurance money. He's had to fork more than $80,000 of his own funds to rebuild his store, which took in two feet of water. He had business interruption insurance but it's only covering food spoilage, a small part of his claim, notes Arpino, adding he thought it would cover much more.
Experts say that's not uncommon.
"Insurance will not cover everything even when you think it does," says Gregory Serio, former superintendent of the state insurance department and now managing director at Manhattan-based consulting firm Park Strategies, who spoke at the Nassau seminar.
Unfortunately, many policyholders don't recognize the gaps in their insurance coverage until filing a claim.
"Understand the terms and provisions of a policy when it is received," Serio advised at the seminar. "This is complicated stuff and you have to connect the dots in your policy."
But insurance is only part of the equation. Businesses must have an overall plan for dealing with any disaster, says Lucille Wesnofske, regional director of the Small Business Development Center at Farmingdale State College, which operates disaster recovery centers in Island Park and Lindenhurst.
"I'd rather err on the side of caution than be caught totally off guard and deal with the aftermath," notes Wesnofske.
Assess risks now
Do a risk assessment to understand what your risks are, and estimate the potential impact to your business from those risks, suggests Andrew Weitzberg, executive vice president of Brae Group Inc., a Smithtown-based business continuity consulting firm, and president of the Long Island Chapter of the Association of Contingency Planners.
Understand how to mitigate and offset potential losses, including making alternative plans if you can't work at your facility. Back up data and store electronic copies of your documents off-site, he said. Also establish a communication plan with employees, suppliers and customers in case of disaster.
"Start your conversations now," says Weitzberg. "The earlier, the better."
Before the next storm strikes
- Understand, review and update insurance policies
- Create a business continuity plan (see ready.gov/business-continuity-planning-suite)
- Designate an emergency response coordinator and backup coordinator
- Make a video of your entire building and inventory contents
- Devise a communication plan for customers, suppliers and employees