By L. Graham Arceneaux, Esq.

Graham, Arceneaux & Allen, LLC

USFN Member (LA)

First of a Four-Part Series - Coastal Hurricanes

Natural disasters are occurring more frequently and with greater intensity, straining businesses and challenging community resilience.  Recently, Louisiana and surrounding coastal areas have been hit hard with hurricanes and are dealing with the fallout from those storms. It is imperative that businesses plan, train, equip, and evaluate their business continuity plans in anticipation of these events.

Prepare

The Disaster Management and Preparedness Cycle is the ongoing process used to prepare, mitigate, and recover from natural disasters, providing a system to assess and ensure that capabilities are in place prior to, during, and following a large-scale disaster. It is essential that a business perform a “Vulnerability Analysis” to assess their weaknesses in the face of such an incident. 

Things to consider:

If there is a power loss and/or the office is inaccessible, how will email and phone communication be impacted?

How will you communicate with clients/vendors? 

Will you have all necessary contact information if you are not able to access your primary server? 

How will clients/vendors communicate with you?

Is there a cell phone number associated with the business, or will you share personal numbers?

How will management and staff communicate?

If there is a back-up server, how long will it take to compile the data on that server?

Will there be delays due to a high volume of encrypted data? 

Will access to calendar programs be available?

While every business operation is different, the best practice is to develop a checklist of requirements essential to maintain operations in the face of a natural disaster.  Except for tornadoes and earthquakes, there is generally time to run through a checklist to ensure nothing is missed prior to the actual event.

 Some items that checklist should include are:

·        Inventory assets at the physical office, with photographs.

·        Make alternate preparations for communication.

·        Ensure that clients and vendors have your cell number and an alternate email address.

·        Ensure that all team members have alternate email addresses and phone numbers.

·        Have the building management team’s contact information.

·        If data is stored on a physical server on site, ensure that the back-up server is ready.

·        Test the back-up server annually to evaluate how long it takes to compile the data and have   the new server up and running.  (Higher levels of encryption slow the transfer of data).

·        Provide staff members with laptop computers to work remotely or alternatively provide VPN access to the firm/company server.

·        Have copies of all business insurance on hand.

Mitigate

A mitigation plan is a key component of adequate preparation.  Run the possible scenarios of natural disasters in your region and determine the best course of action to alleviate business interruption.

There are two scenarios to consider when mitigating the effects of a natural disaster.  Are the effects of this disaster temporary in nature or more permanent? 

For example, on August 29, 2021, the 16^th anniversary of Hurricane Katrina, Hurricane Ida made landfall near Port Fourchon, Louisiana, as a Category 4 Hurricane.  Ida storm remnants caused unexpected severe damage in the Northeast United States, including tornadoes and catastrophic flooding.  Businesses were heavily damaged and without power for weeks, in some cases.

Building upon lessons learned from Hurricane Katrina, Louisiana was prepared for a direct hurricane strike with days of advance notice.  Accordingly, businesses executed action plans in anticipation of absence from their base of physical operation for an uncertain period of time.  While this scenario was viewed as a temporary interruption for businesses not located in the direct impact zone of the hurricane, it required all businesses to activate their Disaster Management and Preparation protocols in advance of the approaching storm. 

Conversely, in the Northeast, remnants of Ida caused unpredicted catastrophic flooding.  The Northeast was, in large measure, unprepared for the level of damage and business interruption that they experienced.

Hurricanes pose a particular threat to coastal states on the Gulf of Mexico and the Atlantic Ocean, from Texas all the way up to Maine. Hurricane damage can come in the form of tidal surge, flooding, high winds, and power loss.  Tidal surge along the coast can destroy homes, roads, and bridges, often isolating communities for extended periods until infrastructure can be repaired.  Hurricanes can bring significant rainfall, inundating areas for hours causing flooding to homes and businesses. The resulting ground saturation, combined with high winds, can bring down trees, cell towers, and power lines. In a hurricane zone, businesses should anticipate extended loss of power as roads must be cleared of storm debris before line crews from the local utility can begin restoration efforts.  Windows in high rise buildings can be blown in, causing water and electrical damage to office suites.  Moving critical electrical equipment and servers to interior offices, along with original documents, is a best practice to minimize the risk of damage and loss. 

When a hurricane approaches coastal communities, businesses need to implement their Disaster Management and Preparedness Plan to stay in front of the developing storm, preparing for remote work and communications as evacuations may displace people living in the impact zone for days or even weeks.  If damage is sustained, businesses must determine if the damage was a result of wind or wind driven rain as opposed to flooding.  Claims from wind damage or a Federal Flood Insurance Claim will likely be processed by separate adjusters.  If power is not restored quickly, mold can develop and render some properties uninhabitable. 

Lessons Learned 

Be prepared to work remotely for an extended period should there be damage to the physical office complex.  If the physical office is heavily damaged, do you have a plan in place to find alternate space from which to operate? 

It is recommended that you have a commercial realtor’s contact information readily available, should the need for a new office space arise.  The disaster will create increased demand, so it will be highly beneficial to get in front of the process.

Recovery

Now that the natural disaster has passed, the following courses of action are recommended:

·        Assess damage to the physical office and follow the established mitigation plan.

·        Communicate with all staff/team members.  Staff/team members may have suffered damage to their homes or the schools their children attend.  It is important to understand and appreciate the needs of your staff through the recovery process.  Providing daily updates regarding business resumption status is essential; do not leave your staff in the dark. Be prepared to be flexible with staff schedules in anticipation of potential housing, school, or day care issues. 

·        Communicate with clients and vendors.  Provide a clear assessment of the damage in your area and when you plan to be fully operational. 

·        Contact the courts.  Court employees were likely displaced along with everyone else, so it is reasonable to anticipate that there will be delays in the resumption of the court schedule.  Follow the Governor’s Office of Homeland Security and Emergency Preparation (GOHSEP) website to obtain updates on court closures and other government-related responses to the natural disaster.

·        Follow the Federal Emergency Management Association (FEMA) website to identify where Federal aid is being provided and if FEMA has recommended court delays on default actions due to the disaster.

Not all natural disasters can be prepared for adequately. However, by maintaining a robust Disaster Management and Preparation Plan, businesses can position themselves to return to normal operations with far more predictability and less time lost.

Copyright @2022

USFN Report - Winter 2022