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But tornadoes are not the only disaster preparedness target. In early 2013, Febru­ary's Wimer Storm Nemo dumped 40 inches of snow on Connecticut, leaving 700,000 customers without power and causing 18 deaths. And, in October 2012, Superstorm Sandy devastated the Mid­Atlantic and New England regions, killing 285 people and causing more than $75 billion in damages.

The examples of natural disasters are endless, and what is most concerning is that many of the most devastating U.S. disasters struck unsuspecting regions where such weather is uncommon. While Mother Nature may be unpredictable, all of us are at risk for at leasF-one type of natural disas­ter or another. We cannot prevent natural disasters, but we can prepare.

A COSTLY EXPERIENCE For long-term care (LTC) facilities, the risk is even greater because so many lives are cared for under a single roof. A single-site facility may spend several hundred thou­sand dollars in extra expense, expediting ex­pense, and emergency evacuation expenses. This number increases with each additional site. In addition to the actual evacuation expenses (hotels, transportation, food), a facility could potentially incur hundreds of thousands of dollars in expenses for genera­tors, additional linens, facility protection and myriad other items, all resulting in a substantial loss of revenue for each day that business is inoperative.

An LTC organization also must consider the value of the "soft costs" during and after a natural disaster, in terms of distress to the

The team leader must have the time and flexibility throughout the year for opportunities to continue to examine, hone, and refine the disaster recovery plan.

26 • AUGUST 2013 • RESOURCE GUIDE

staff, distractions from strategic work plans, and interruptions in the claims process. Finally, organizations need to strongly consider their General and Professional Li­ability exposures relative to the evacuation of residents. What happens if a resident is injured or killed during an evacuation? Are you protected?

The considerations seem endless, but the most important question is: "How do

I maximize insurance coverage and limit

my financial exposure? And, how do I plan

for evacuations and ensure that my liability

policies will protect my residents-even if we

must evacuate the facility?" From prepared­ness to recovery, the following information can serve as a primer for preparedness­from critical business considerations pre­disaster to best practices post-disaster.

BEFORE THE EVENT: Form a recovery team. The first step is to establish a cross-functional onsite disaster recovery team that will meet at least every trimester. This team should be responsible for evacuation planning and execution, as well as the organization's speedy recovery thereafter.

First, identify a strong team leader and provide explicit responsibilities, similar to a job description. This is a time-intensive role, requiring commitment throughout the year-not just in the aftermath of a disaster. The team leader must have the time and flexibility throughout the year for opportunities to continue to examine, hone, and refine the disaster recovery plan. Clearly define how the CEO or other executives will interact with the team leader, as this can be a source of contention if not properly defined before a disaster occurs.

The best leaders will have a solid team supporting them, so choose the team members carefully. They should come from a cross-section of all levels and functions within the organization. Rather than treat­ing the disaster recovery team as an "added responsibility," engage team members on the basis that the team is part of their professional development and the organiza­tion's succession planning.

Develop an evacuation plan. A well­defined plan will address the following elements and considerations:

• Command Center. This should be your central hub of planning, communica­tion, decision making, adjusting as the disaster evolves, etc. Where will it be located? Who will run it?

• Food. Who is your food vendor? Do you have a backup food vendor? What are your residents' dietary consider­ations? How will you supply the vendor with patients' dietary needs?

• Medication. How will you safely trans­port and maintain medications, includ­ing oxygen, injectables and ingestibles? What medications do your residents need? How will their needs be commu­nicated to a receiving facility?

• Shelter. Are there established arrange­ments with nearby receiving facilities? Are the arrangements reciprocal? Do you have prenegotiated hotel rates at hotels?

• Transportation: Ambulatory resi­dents. Does your have enough vehicles to transport residents, or do you need arrangements for group transportation? Other transport considerations-ALS, BLS, and wheelchair lifts/ramps, etc. What route will the vehicle will take from the site to the hotel? If that route is no longer available, what is Plan B?

• Transportation: Nonambulatory residents. Are vehicles equipped to transport nonambulatory residents? If not, do you have relationships and es­tablished arrangements with local EMS crews? Do you have nonambulatory residents on the second floor or higher? If so, do you plan to carry immobile patients, or do you own chairlifts?

• Patient identification. What "tagging" system will be used to identify every patient? What information does a tag need? (i.e., name, medications, diet, name of evacuated facility, name of receiving facility, other medical/behav­ioral considerations).

• Communication tools. What if phone lines are down? What if cellular signals are disrupted?

• Communication plan. Who is responsible for writing, approving, and sending notification to residents, families and employees? How will com­munication be sent? Will you use social networks like Facebook and Twitter to

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communicate with families? If so, who is responsible and what information are you authorized to share?

that may not be that common in your geographic region.

Sublimits. A sublimit is part o£ rather than in addition to, the limit that would otherwise apply to the loss. In other words, it places a maximum

• Individual patient arrange­ments. The more patients you can readily return to family, the less professional liability you have during an evacu­ation period. Are patients' families willing and able to pick up and care for the resi­dent in the event of a natural disaster? Have you document­ed patients' status/preference? Do you have updated family contact information to make

Timothy E.J. Folk

on the amount available to pay that type of loss. For example, under a commercial property policy with a $200 million blanket limit applicable to loss from all other causes, there may be a $100,000 sublimit on coverage for loss from flood, a $500,000 sublimit on loss

arrangements? from earthquake and a debris • Labor pool. What employees removal sublimit of 25 percent

will likely be able to come of the direct-damage loss to work during a regional amount. evacuation? To make it easier It is critical to understand for employees to work during what the sublimit is for the evacuation, will you offer evacuation response expenses, employees and their families Chris Keith business interruption, and (and pets) lodging at the same hotel or remediation. Also, know what event will other facility that houses your resi- officially trigger an evacuation-depend-dents? ing on your insurance policy structure,

Develop a shelter-in-place plan. While an evacuation plan is critical, there may be many situations such as a tornado, flood warning or air contamination warning, when it is best to stay inside to avoid any uncertainty outside. In these situations, a Shelter-in-Place Plan is essential. This plan is different than the evacuation plan. For example, determine what areas of the building will serve as "shelters." Keep in mind that a tornado will require shelter on the ground floor or below ground, while a flood warning would require a different shelter location.

Next, develop a warning system for the facility, as well as a system that accounts for who is in the building during an emer­gency. With regularity, test the warning system, practice the in-shelter plan, and check the stock of emergency supply kits.

CONSIDER YOUR INSURANCE Covered Perils. A professional broker can determine Covered Perils and assess your level of coverage for wind, storm, and flood. Consider expanding the policy to

include some level of coverage for perils

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sublimits may only apply at the insured's discretion (i.e., evacuation when safety of patients is at risk) or at the discretion of an official governing body (i.e., the state, the county or the National Weather Service).

Be aware of your insurance policy's exclusions-including the breadth of those exclusions. A "flood" exclusion is narrower than a "water" exclusion, and those differ­ences can change your recovery costs by dramatic amounts. Consider the following:

• Are you eligible for National Flood Insurance Program (NFIP) coverage? If so, do you have it specifically for each building?

• Is your "extra expense limit" part of the blanket limit or part of the stand-alone limit?

• Does your policy make you subject to proportional spending of the extra expense limit over specified time peri­ods, or do you have access to the whole amount up front?

AFTER THE EVENT: RECOVERY An insurance broker's response to a disaster is just as critical as preparing for it. Brokers

must fully understand an organization's financial exposure in the wake of a disaster and be equipped to leverage various areas of the policies to maximize recovery. Ex­penses need to be appropriately "bucketed" into the .various sublimits available. Were the costs related to civil authority, business interruption, evacuation expense, real/per­sonal property damage, expediting expense, or others? The most important post-disaster

. step is the initial reporting of the claim. It's not what is said, but how it is said.

In the face of disaster, brokers should operate in an onsite project management capacity so that all the remediation and restoration processes of your vendors are funneled through them. The broker should work in concert with forensic accountants to help the organization limit financial exposure. Maintaining a central, onsite risk management role, the broker and the sup­porting claims managers can ensure that the claims strategies are executed in the best way for your organization.

SUMMARY The trend toward more violent and de­structive weather patterns unfortunately shows no signs of abating. It is more im­portant than ever for owners and financial officers at assisted living and LTC facilities to consider consulting with a professional broker well versed in disaster planning and recovery. A professional broker can help you stress-test a disaster plan and then improve it, or can help implement a plan if one is not currently in place. Mother Nature has proven too many times that disaster can strike anywhere, anytime-the recent May 2013 devastating tornadoes in Oklahoma City are just the most recent proof. And, organizations will only be as strong and resilient as the preparation and recovery plans in place. Ln

Timothy E.J. Folk is vice president and producer at The Graham Company, a large property and casualty and employee benefits brokerages in the Mid­Atlantic region. Contact him at tfolk@grahamco.com or call (215) 701-5231.

Chris Keith is a producer at The Graham Com­pany. His primary focus is on the health and human services industry and has a particular expertise in the area of Captive formations. Contact him at ckeith@grahamco.com or call (215)701-5297.

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