How risk managers can respond to Hurricane Milton

Hurricane Milton made landfall near Siesta Key, Florida as a category 3 hurricane with sustained winds of 120 mph.

The storm also spun off numerous tornadoes across Florida resulting in fatalities in St. Lucie County.

Heavy rain and wind gusts of 60 to 70 mph are still battering parts of the Space Coast and nearby shores. Milton will track farther over the Atlantic today, but breezy conditions will persist over much of the Florida Peninsula.

Acrisure Re’s initial assessment found that in areas like Pinellas and Hillsborough counties, there were reports of downed trees, power lines, traffic light outages, and significant debris blocking streets.

Due to the landfall position, Tampa Bay did not experience what could have been the worse case scenario in terms of storm surge inudation, however, heavy rainfall and hurricane force wind did impact this area.

A sustained wind of 74 mph and a gust of 98 mph was reported at a NOS station at Middle Tampa Bay. Milton dropped significant rainfall with the highest rainfall totals north of the center. More than 18 inches of rain was reported in St. Petersburg.

After restrengthening into a category 5 storm for the second time yesterday, Acrisure Re says that Milton has now begun to weaken as upper-level shear and dry air disrupt the inner core of the storm, as forecasted.

However, it is still a powerful storm with maximum sustained winds of 145 mph, making it a category 4 hurricane.

Further weakening is expected, as the storm turns to the northeast towards the west-central coast of Florida, but Milton is still forecasted to be a category 3 or 4 storm at the time of landfall with an expanded wind field.

This will bring impacts far from the center of the hurricane and landfall location, although the biggest impacts will be just to the south of landfall, which is projected to be near Sarasota, Florida.

Even though the hurricane is weakening, Milton is anticipated to bring powerful winds, heavy rain and catastrophic and life-threatening storm surge to many parts of central and south Florida.

A Storm Surge Warning is in effect for:

• Florida west coast from Flamingo northward to Yankeetown, including Charlotte Harbor and Tampa Bay
• Sebastian Inlet Florida to Altamaha Sound Georgia, including the St. Johns River

A Hurricane Warning is in effect for:

• Florida west coast from Bonita Beach northward to Suwannee River, including Tampa Bay
• Florida east coast from the St. Lucie/Martin County Line northward to Ponte Vedra Beach

A Storm Surge Watch is in effect for:

• North of Altamaha Sound Georgia to Edisto Beach South Carolina

A Hurricane Watch is in effect for:

• Dry Tortugas
• Lake Okeechobee
• Florida west coast from Chokoloskee to south of Bonita Beach
• Florida east coast north of Ponte Vedra Beach to the mouth of the St. Marys River
• Florida east coast from the St. Lucie/Martin County Line to the Palm Beach/Martin County Line

A Tropical Storm Warning is in effect for:

• Florida Keys, including Dry Tortugas and Florida Bay
• Lake Okeechobee
• Florida west coast from Flamingo to south of Bonita Beach
• Florida west coast from north of Suwanee River to Indian Pass
• Florida east coast south of the St. Lucie/Martin County Line to Flamingo
• North of Ponte Vedra Beach Florida to the Savannah River
• Extreme northwestern Bahamas, including Grand Bahama Island, the Abacos, and Bimini

A Tropical Storm Watch is in effect for:

• North of the Savannah River to South Santee River South Carolina

What does it mean for businesses?

Naturally, in the event of a hurricane the risk of substantial losses is also elevated, and businesses must always hope for the best, but prepare for the worst.

EuroTempest’s Dr Adam Lea says: “The most destructive element in a hurricane is frequently water, not wind, both from surge and extreme rainfall.

“The other areas risk managers might consider are; for investors, reviewing their capital allocations in areas at high risk of hurricane activity, reviewing (re)insurance cover to check they are adequately protected, and assessing the businesses liquidity and reserves.

“Companies should be taking a look at their business interruption and disaster recovery plans – making sure their supply chains are secure as well as their own operations.”

What impacted businesses can do now

Senior management must understand the impact and ramifications of a catastrophic event affecting their business.

Robert Glasser, a managing director in BRG’s Business Insurance Claims practice, says: “Management must quickly effectuate alternative suppliers, manufacturing operations, warehousing, distribution, technology, and other operational components to get back on their feet with minimal disruption to their supply chain, manufacturing, or distribution of product or services.”

He advises that businesses can take several steps to respond to disasters including:

• Crucially, businesses must protect the safety of their employees and customers. For example, a hotel should have evacuation plans and safe areas on the property for those who ride out the storm.
• Property damage can be mitigated by boarding up windows, shutting down damaged utilities, and/or moving inventory and stock to a safer location.
• Maintaining backup financial and operations files off site or in the cloud can facilitate a faster restart to operations and a smoother insurance process.
• A business must then put into action its pre-planned recovery team to assist with safety and property preservation. Notify your insurance broker, which will put the insurance company on notice and trigger the assignment of an adjuster to begin processing the claim.