Power outages are on the rise across the U.S., due to poorly-maintained and outdated power infrastructure, increasingly severe weather and to prevent the outbreak of catastrophic events like forest fires.

When done to avert fire danger, blackouts can save lives and prevent significant physical damage to local homes and businesses. And yet, rolling blackouts that gradually move through cities and rural areas, shut down businesses and other critical operations can cause reliability issues when these organizations are offline for more than a few hours.

Taking a business offline often means a loss of both income and inventory. Businesses can prepare with these 5 steps:

  1. Think ahead. Make sure you’ve got a generator or some form of backup power. Don’t wait until there’s an outage and they’re sold out. If a windstorm is expected on the West Coast or a hurricane is rising on the East Coast, know your utility may shut power down as a precautionary measure. Stay up-to-date by signing up to receive automatic text or email messages from the utility or regularly check their website for updates.
  2. Talk to your insurance broker. Just because the power was turned off and your business experienced a loss, doesn’t mean the loss is covered by your liability policy. Find out what’s included in your current Property, General Liability and Business Interruption (BI) policies by talking to your insurance broker about your risk. Loss of income is only covered under your BI policy for a catastrophic event like a storm or a car crash into a power line. When the utility shuts off power proactively, a loss of income would not be covered by a BI policy. Work with your broker to determine what’s covered and what isn’t on your policies.
  3. Conduct a business risk/impact analysis. Try to determine how a power outage will affect your business. Consider computers, emergency lighting, HVAC equipment and more. Do you have backup power in place for critical components needed to operate your business and ensure your employees and/or the public are safe?
  4. Develop a plan. Consider staff, space and systems. Staff: If at the office, consider who can be sent home during an outage. How can they work without power? Space: If the office loses power, security systems will be down, too. What can be done? Systems: Computers, communications systems, payroll, etc., figure out how to function with systems down for more than 24 hours. How will you communicate with customers, staff? If a service company, how do you continue to serve your customers?
  5. Practice the plan. Conduct drills. Consider doing a full employee training drill without power to prepare staff.

Sudden power outages cost as much as $150 billion annually.1 Take a lesson from the California rolling blackouts – it’s critical there is a power outage plan for your business in place today to deal with tomorrow’s inevitable.

Contact your HUB Risk Services specialist for more information on sheltering your business from a blackout – planned or unexpected.

1 https://www.popsci.com/story/environment/why-us-lose-power-storms/