Multiple Storms and a New Category Introduced: What Dealerships Need to Know About Hurricanes

Preparation is key to getting through any natural disaster. In Florida, the main risk to your dealerships are hurricanes and tropical storms. As hurricane season begins earlier each year, there is no time like the present to start.

Ask yourself these questions:
  1. Could business continue if the city or streets near my dealership are closed?
  2. How could I serve my customers’ needs if my facility needed to close for months?
  3. Could my business survive if it was closed for weeks or months?
  4. Will it affect deliveries or my business contacts?

As reported by the American Red Cross, almost half of all small businesses affected by a major disaster, such as a tornado, flood, earthquake or hurricane, do not reopen their doors because they were unprepared. Even if your dealership is not in danger of a storm, there are plenty of other natural disasters to worry about and having a plan is vital.

Preparation Is Key

Consider incorporating the following before disaster strikes:

  1. Check local flood maps and have your building inspected by a licensed professional to ensure the roof and other connections comply with the wind loading requirements for your area.
  2. Consider installing impact-resistant film on your windows.
  3. Gather a list of vendors and telephone numbers that are critical to your daily operations. If you heavily rely on one or two vendors, consider adding one outside of your area.
  4. Prepare a list of companies that can assist you in recovery efforts, such as removing debris, moving and computer services.
  5. Prepare a list of your employees and their contact information.
  6. Arrange for communication with clients, customers, and employees to keep them informed.
  7. Diversify your customer base, products, and sales locations, this will prevent significant loss if most of your customers are affected by the hurricane.
  8. Take before and after pictures of the business for insurance purposes.
  9. Shut down all incoming power, electric, gas, water lines, computers, copiers, etc. to not create excessive surge when power is restored.
Prepare for Business Continuity and Recovery

Dealers in South Florida should be concerned about flood damage. While business interruption and many property and casualty policies do not cover flood damage, The National Flood Insurance Program includes the option of buying the coverage.

Beyond reviewing the policies, have your business appraised every five years, conduct an inventory of your supplies and equipment, and leave this information in an off-site location.

In the wake of a disaster, the primary goal should be to restore customer confidence by getting the doors open as soon as possible.

Additional tips, provided by the Florida Automobile Dealers Association:
  1. Be aware of your responsibility to mitigate damages following a storm. Your insurers require you to secure your premises and prevent further damage from wind and rain following a storm.
  2. Develop a plan for your replacement inventory; several dealers noted that it was vital to remove damaged vehicles before new inventory can be brought in.
  3. Most dealerships have difficulties locating skilled labor to help with damaged roofs and other structural work. Contact contractors in advance as supplies may be unavailable after a major storm.

A disaster preparedness plan is something you hope you never use but, proper planning can give you the peace of mind that comes with knowing that your business is ready, willing, and able to shift into disaster response mode, if necessary.

This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice.

 

 

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