Ensure Your Grocery Store's Safety During Natural Disasters

In the wake of Hurricanes Helene and Milton, the catastrophic impact weather can have on our lives, homes, and businesses are top of mind for many Americans. Independent grocery owners know that it is crucial to safeguard their business against unforeseen disasters. We asked Houchens Insurance Group, an IGA Red Oval partner, for advice on protecting independent grocery stores during these severe weather events.

"It is imperative to have a robust insurance and risk management program that addresses potential losses," Houchens Insurance Group Consumer Staples and Practice Leader Wells Gunn said. Keep reading for his tips on essential disaster preparedness plans and the importance of thoroughly reviewing your property policy and deductible structures.

Disaster Preparedness Plans

Disaster preparedness is the cornerstone of protecting your grocery store from natural and man-made disasters, Gunn said. He recommends retailers start by developing a comprehensive disaster preparedness plan that includes:

• Risk Assessment: Identify potential hazards such as fires, floods, hurricanes, and earthquakes that could affect your store.
  
  
• Emergency Procedures: Establish clear procedures for evacuation, communication, and emergency response.
  
  
• Employee Training: Ensure all employees are trained on emergency procedures and know their roles during a disaster.
  
  
• Emergency Supplies: Stock up on essential supplies such as first aid kits, flashlights, batteries, and non-perishable food items.
  
  
• Regular Drills: Conduct regular drills to keep everyone prepared and aware of the procedures.

The Houchens Insurance Group (HIG) team will walk clients through a risk assessment, identifying items to properly assess a grocer's risk profile. Following the assessment, the team will identify areas of focus that the group is excelling in, meeting the standard in, or areas that need attention.

Thorough Review of Your Property Policy

Next, Gunn recommends performing a thorough review of your property policy to ensure you have adequate coverage. Pay close attention to the following aspects:

• Building Limits: Ensure your policy covers the full replacement cost of your building. Underestimating this amount could leave you underinsured and face significant co-insurance penalties.
  
  
• Contents/Inventory Limits: Verify that your policy includes sufficient coverage for your store's contents and inventory. In addition to the overall replacement cost, make certain that you have adequate spoilage limits.
  
  
• Business Income & Extra Expense Limits: Business income protects your store’s net profit and continued operating cost if your store is forced to close temporarily due to a covered disaster/cause of loss. Extra expense coverage can help cover additional costs incurred to keep your business running during repairs or for temporary relocation.
  
  
• Wind/Hail Deductibles: Understand your policy's deductible structure for wind and hail damage. These can vary significantly and impact your out-of-pocket expenses in the event of a storm. It is common, especially in coastal areas and states that are affected by severe convective storms, to see wind/hail deductibles between one and five percent.
  
  "Analyze and be aware of any exclusions and/or separate wind/hail deductibles," Gunn said. "Retailers should also ensure their property coverage has appropriate replacement cost limits to avoid co-insurance penalties."

Gunn said Houchens Insurance Group performs a thorough analysis of their clients' and potential clients' insurance and risk management programs free of charge. Non-clients can hire HIG as a consultant to perform this work as well.

The Importance of Flood Coverage

Flood coverage is often overlooked but is vital for protecting your business.

"It's important to note that flood damage is not typically covered under standard property insurance policies," Gunn said. "Retailers must know what flood zone your locations are in."

Gunn encourages retailers to consider:

• Sources of Flooding: Flooding can result from various sources, not just storm surges. Rising water from rivers, lakes, streams, and the backing up of sewer drains and parking lots can also cause significant damage.
  
  
• Flood Insurance: Invest in a separate flood insurance policy to cover potential flood damage. This policy can help cover the cost of repairs and replacement of damaged property.
  
  
• Flood Preparedness: Implement flood preparedness measures such as installing flood barriers, elevating critical equipment, and ensuring proper drainage around your property.

"The key element on flood coverage is identifying what flood zone the retailers property falls in," Gunn explained. "This determines the risk or likelihood of future flood risk. The federal government has a program called the National Flood Insurance Program (NFIP), where a business can secure $500,000 on building coverage and $500,000 in in contents coverage."

Gunn added that for businesses that need additional flood coverage limits over the $500K NFIP limit, you can secure excess coverage.

By taking these steps, you can better protect your grocery store(s) from potential disasters and ensure that you have the necessary coverage to recover quickly, Gunn said.

"Remember, being proactive and prepared is the key to minimizing the impact of any disaster on your business."

To learn more about Houchens Insurance Group, click here.