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The Atlantic hurricane season runs from June 1 to Nov. 30, but it peaks sharply during August, September and October. The latest forecasts predict this will be one of the most active seasons in history, in terms of frequency and severity, though it is always important to remember that even a single hurricane or tropical storm making landfall can still be a devastating event.

Hurricanes pose unique risks to the construction industry ranging from project and labor force disruptions to concerns about the availability and price of construction materials. This is even more true this year, which requires merging hurricane preparedness and response plans with the realities of COVID-19. Because hurricanes cannot be avoided, preparing for them is the only way to manage these risks. Ensuring the personal safety and wellbeing of affected individuals is the first priority. After that, here are some key issues, and suggestions for handling them, that may help guide construction companies through the storm.

Site Protection

Construction contracts often place responsibility for site protection on contractors. Where those duties exist, failing to properly carry them out can lead to enormous losses that then turn into liability claims. This could be anything from removing materials that can become projectiles, covering exposed ventilation shafts, and sealing electrical conduits to ensuring that key equipment such as generators and pumps can remain functional in a storm. One way to approach it is to imagine sustained 100-mph winds and relentless water, and then make sure preparedness efforts are likely to survive that kind of test. This is not the time for guessing. It is far better to go through a rigorous analytical process now than in a courtroom years later.

Documenting the condition of the property is also crucial. It can accelerate recovery and help avoid disputes down the road, in terms of the project and the insurance claims that come out of it.

Insurance Coverage

Hurricanes are insurable. Flooding is insurable. Their financial impacts are insurable. But only if coverage is properly placed sufficiently before a storm arrives. Once a construction site is in the zone of danger from a given storm, it is far too late to make changes to coverage. For example, if a contractor needs help analyzing how its policies (including an OCIP or CCIP) might respond to a CAT 3 hurricane, retaining coverage counsel that represents policyholders is a key addition to its internal risk management team and insurance broker.

After the Storm

Once the storm is over, it is time to get to work on recovery. Start by addressing urgent needs, such as de-watering or securing areas that were damaged during the storm to protect from further losses if possible.

It is also critical to simultaneously begin the insurance claim process, which begins with giving notice to all potentially relevant insurers. This may mean more than just property insurers, it might also include environmental insurers, liability insurers and others.

After notice is given, insureds should start tracking their losses so that they do not have to try to re-create them later. They also have a duty to cooperate with their insurers, such as allowing the inspection and salvage of damaged property or the review of financial information to support claims for lost income and increased expenses. Insureds may also be required to give a proof of loss, and it is important to keep in mind that the time to act on these items may be subject to relatively short periods of time, even before recovery efforts are complete.

Insurance companies have teams made up of adjusters, forensic accountants, engineers, consultants and coverage counsel. Insureds should have that same expertise on their team as well—a group that has been battle-tested through prior events instead of trying to learn it as they go. Just like site protection and coverage assessment, the time to get that done is now, rather than waiting until after a storm comes through. Doing that proactively can save valuable time when the full range of expertise is needed to response to a catastrophe.

Contractors are process-driven companies. They do not undertake large projects without adequate planning ahead of time, and the discipline to follow through with that planning. That same approach works for hurricanes as well—make a plan ahead of time, implement that plan, make modifications when warranted and see things through to completion. With any other approach, there’s no telling where things might end up.

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