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.
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
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.
A COSTLY EXPERIENCE
BEFORE THE EVENT:
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
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
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:
The team leader
must have the
time and flexibility
throughout the year
for opportunities to
continue to examine,
hone, and refine the
26 • AUGUST 2013 • RESOURCE GUIDE
• 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
• 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
• 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
WWW. LTLMAGAZINE .COM
must fully understand an organization's
communicate with families? If so, who
that may not be that common in your
is responsible and what information are
financial exposure in the wake of a disaster
Sublimits. A sublimit is part
and be equipped to leverage various areas
you authorized to share?
o£ rather than in addition to,
of the policies to maximize recovery. Ex• Individual patient arrangethe limit that would otherwise
ments. The more patients you
penses need to be appropriately "bucketed"
into the .various sublimits available. Were
apply to the loss. In other
can readily return to family,
words, it places a maximum
the less professional liability
the costs related to civil authority, business
on the amount available to pay
interruption, evacuation expense, real/peryou have during an evacuthat type of loss. For example,
ation period. Are patients'
sonal property damage, expediting expense,
under a commercial property
or others? The most important post-disaster
families willing and able to
policy with a $200 million
. step is the initial reporting of the claim. It's
pick up and care for the resiblanket limit applicable to loss
dent in the event of a natural
not what is said, but how it is said.
from all other causes, there may
disaster? Have you documentIn the face of disaster, brokers should
Timothy E.J. Folk
be a $100,000 sublimit on
operate in an onsite project management
ed patients' status/preference?
coverage for loss from flood,
capacity so that all the remediation and
Do you have updated family
a $500,000 sublimit on loss
contact information to make
restoration processes of your vendors are
funneled through them. The broker should
from earthquake and a debris
• Labor pool. What employees
removal sublimit of 25 percent work in concert with forensic accountants
to help the organization limit financial
will likely be able to come
of the direct-damage loss
exposure. Maintaining a central, onsite risk
to work during a regional
management role, the broker and the supevacuation? To make it easier
It is critical to understand
for employees to work during
porting claims managers can ensure that
what the sublimit is for
the claims strategies are executed in the
the evacuation, will you offer
evacuation response expenses,
best way for your organization.
employees and their families
business interruption, and
(and pets) lodging at the same hotel or
remediation. Also, know what event will
other facility that houses your resiofficially trigger an evacuation-dependdents?
ing on your insurance policy structure,
The trend toward more violent and desublimits may only apply at the insured's
structive weather patterns unfortunately
discretion (i.e., evacuation when safety of
shows no signs of abating. It is more imDevelop a shelter-in-place plan. While
patients is at risk) or at the discretion of an
an evacuation plan is critical, there may be
portant than ever for owners and financial
official governing body (i.e., the state, the
officers at assisted living and LTC facilities
many situations such as a tornado, flood
county or the National Weather Service).
warning or air contamination warning,
to consider consulting with a professional
broker well versed in disaster planning and
Be aware of your insurance policy's
when it is best to stay inside to avoid any
exclusions-including the breadth of those
uncertainty outside. In these situations,
recovery. A professional broker can help
exclusions. A "flood" exclusion is narrower
a Shelter-in-Place Plan is essential. This
you stress-test a disaster plan and then
than a "water" exclusion, and those differplan is different than the evacuation plan.
improve it, or can help implement a plan
ences can change your recovery costs by
if one is not currently in place. Mother
For example, determine what areas of the
dramatic amounts. Consider the following:
Nature has proven too many times that
building will serve as "shelters." Keep in
disaster can strike anywhere, anytime-the
mind that a tornado will require shelter on
• Are you eligible for National Flood
recent May 2013 devastating tornadoes in
the ground floor or below ground, while
Insurance Program (NFIP) coverage? If
Oklahoma City are just the most recent
a flood warning would require a different
so, do you have it specifically for each
proof. And, organizations will only be as
strong and resilient as the preparation and
Next, develop a warning system for the
• Is your "extra expense limit" part of the
recovery plans in place. Ln
facility, as well as a system that accounts for
blanket limit or part of the stand-alone
who is in the building during an emerTimothy E.J. Folk is vice president and producer at
gency. With regularity, test the warning
The Graham Company, a large property and casualty
• Does your policy make you subject
system, practice the in-shelter plan, and
and employee benefits brokerages in the Midto proportional spending of the extra
check the stock of emergency supply kits.
Atlantic region. Contact him at email@example.com
expense limit over specified time perior call (215) 701-5231.
ods, or do you have access to the whole
Chris Keith is a producer at The Graham ComCONSIDER YOUR INSURANCE
pany. His primary focus is on the health and human
amount up front?
Covered Perils. A professional broker can
services industry and has a particular expertise
determine Covered Perils and assess your
in the area of Captive formations. Contact him at
AFTER THE EVENT: RECOVERY
level of coverage for wind, storm, and
firstname.lastname@example.org or call (215)701-5297.
An insurance broker's response to a disaster
flood. Consider expanding the policy to
is just as critical as preparing for it. Brokers
include some level of coverage for perils
RESOURCE GUIDE • LONG-TERM LIVING • 27