Financial Preparedness

Wild Weather Catching Small Businesses Off Guard - How Medical Practices Can Prepare

October 17, 2013

In October 2012, Superstorm Sandy devastated the east coast with heavy winds and storm surges that flooded major cities and shorelines while dumping record snow in West Virginia and knocking out power as far away as Ohio.

Add Sandy to a growing list of freak storms. In the summer of 2012, a violent string of thunderstorms called a "derecho" left a 700-mile trail of destruction across the Midwest and mid-Atlantic. A freak October blizzard in 2011 left millions of New Englanders without power for weeks only months after Hurricane Irene did the same. And in July 2011, a massive "haboob" sandstorm turned a sunny Phoenix sky black in a matter of minutes.

Weather events like these are increasingly the stuff of news headlines. In 2011 alone, a record 14 separate disasters struck the U.S., each costing a billion dollars or more in damages.1 Insured losses were the fifth highest on record, exceeding $35 billion.2 11 weather events caused at least $1 billion in losses in 2012, which was also the warmest year in the United States since recordkeeping stated in 1895.3 Unpredictable weather seems to be the new norm.

Being unprepared can be costly


Don’t let your practice become a statistic

One in five small business owners has experienced a loss or business interruption.6

30% of small businesses say they closed their business for at least a day due to one or more natural disasters7

No one can forecast exactly when and where an extreme weather event will occur. Meteorologists may offer some warning and do a great job of explaining the conditions that created the event. But that's little comfort to a business that finds its doors closed for weeks because it didn't have a plan for weathering the storm in the first place.

Property damage, power outages, closed roads - these and other after-effects of extreme weather can force a business to close with financial repercussions that quickly add up. The event need not be of Katrina-sized proportion. For instance, a snowstorm that knocks out power for a week may not seem catastrophic but its impact on the finances of a small business can be devastating. Absentee employees facing their own personal losses will have a direct effect on a business' ability to function, too.

It's no wonder, then, that an estimated 40% of businesses don't reopen after a disaster.4 Small businesses are especially vulnerable, simply because they often don't have the time or resources to put into creating a comprehensive preparedness plan. With unpredictable weather on the rise, the time for practices to plan is now. Take renewed stock of your risks and make sure your practice is prepared and adequately protected.

Plan for the unexpected

There is much you can do to make your practice more resilient after a disaster. Here are some key areas to focus on.

  • Recognize the potential threats that nature may pose in your geographical area. Consider the usual types of events for your region as well as the freak ones that may not be the norm (such as tornadoes in New York). Then take measures to reduce or eliminate your exposure. A structural engineer or your community building or zoning offices can identify ways to shore up your facility against the effects of earthquakes, high winds, flood and fire. 

    Make sure you have protective systems in place. For example, an emergency generator can provide power during outages. Surge protectors can prevent damage to electronic equipment. Storm shutters can protect glass from flying debris under windy conditions.
  • Back up your electronic patient records and computer data - regularly. This is a critical risk management step that most small business owners overlook at their peril. Fact is, of those companies that experience a catastrophic data loss, 43% never reopen and 51% close within two years.5
  • Develop a business continuity plan. A business continuity plan identifies the specific steps your practice will take to return to operation after a disaster. It requires time and effort, but in the long run, it can help reduce loss, save lives and speed your practice’s recovery.

Make sure you're protected

Many practices discover they're not properly insured until after they've suffered a loss. The results can be devastating financially. As part of your preparedness planning, take some time to review your insurance coverage with a Hartford representative, especially if you haven't done so in a while. Together you can discuss the potential risks to your practice and determine if you have the right coverage - and the right amount of coverage - if your facilities are damaged or operations are interrupted for a period of time. This could include coverage for loss of business income for canceled or missed patient appointments; loss of any perishable stock like temperature sensitive medications; or the appropriate insurance value on high value medical equipment.

Being prepared and protected makes good business sense. A temporary setback does not need to turn into a permanent failure. Plan today to stay in business tomorrow.

Ten Things Your Practice Can Do To Prepare

Know Your Risks

1.   Know the weather trends.  
Identify the types of weather events to which your practice may be vulnerable. Visit and select your state for information and preparedness tips on the natural hazards in your area.
2.   Identify your business-critical assets and operations.  
List essential equipment, medications, services and facilities. Make sure to include utility services such as electricity, water, gas and transportation. Download the Risk Assessment Table.
 3.   Assess the potential impact.  
Pinpoint the emergencies that could occur as a result of an extreme weather event. Identify how each would affect your employees, your property and the critical aspects of your practice. Download the Business Impact Analysis Worksheet.
4.   Understand your insurance coverage.  
Review and update your insurance annually with your insurance agent. Keep insurance information and contact names and numbers in a safe place in case of an emergency.

Focus on Prevention

5.   Secure and protect your building.  
Do everything you can to prevent the possible emergencies you've identified. Install prevention and safety systems and check them regularly.
6.   Protect vital business records.  
Keep your most important documents in a safe that has been tested and listed by UL (Underwriters Laboratories) as being resistant to fire, heat, burglary tools and torches.
7.   Back up data and software daily.  
This can help speed recovery from data loss or hardware failure. Send back-up copies to a location separate from your primary facility at least once a week.

Develop a Plan — and Keep It Up to Date

8.   Create an emergency response plan.  
Establish procedures for communicating an emergency to your employees, shutting down operations, fighting fires, protecting vital records and evacuating the premises. Download the Emergency Response Plan Template.
9.   Create a business continuity plan.  
A business continuity plan spells out how you'll restore operations once an event has passed. Download the Business Continuity Plan Worksheet.
10.   Create an emergency kit and list of contact numbers.  
Include essential items such as first aid supplies, flashlights, tool kit, extra batteries, and bottled water. Make sure the kit is easy to access during an emergency. Download the Emergency Kit Checklist.

Learn more about extreme weather and the impact it can have on your medical practice.

For more information on business insurance coverage for your practice, speak with a Hartford representative at 1-800-417-8054 or visit

1"2011 a Year of Climate Extremes in the United States," National Oceanic and Atmospheric Administration (NOAA), January 19, 2012 
2 Munchener Ruckversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE. As of January 2012 
3 National Climatic Data Center (NCDC), as of September 1, 2012. 
4 U.S. Department of Labor, "Forty Percent of Businesses Shut Down After a Disaster. Will Yours Survive?," December 11, 2011 
5 University of Texas Center for Research on Information Systems, as cited in "Impact on U.S. Small Business of Natural and Man-Made Disasters," Hewlett Packard Development Company, L.P., 2007. 
6 The Hartford’s 2012 Small Business Success Study   
7 National Federation of Independent Businesses, SB411 Facts

© April 2013 The Hartford Financial Services Group Inc., Hartford, CT 06115 All Rights Reserved. All information and representation herein are as of April 2013.

This document contains only a general description of coverages that may be provided and does not include all the features, exclusions and conditions of the policies it describes. Certain coverages, features and credits may vary by state and may not be available to all insureds. You should consult the actual policy language and speak with the appropriate Hartford representative if you have questions. In the event of a loss, the terms of the policy issued will determine the coverage provided. Coverages are underwritten by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford Plaza, Hartford CT 06155, CA lic. #5152.

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