[Editor’s Note: SPW Legal Editor Tiffany Comprés, who practices with the renowned international produce trade law firm, Sandler, Travis & Rosenberg, P.A in Miami, had planned a column on growers’ rights regarding bad shipments; given current events she’s focused instead on Irma and its likely aftermath. Look for Part 2 on bad shipments in her next update.]
Here in Florida we are waiting for Irma, checking our water stores, and shuttering the windows. What should you be doing to protect your business in the event of a storm or other natural event?
Ideally, you would have a business continuity plan in place and have spoken to your insurance agent or attorney to ensure you are appropriately insured. Even if you haven’t had a chance to take these steps, here are a few actions you can take to safeguard your business if you are facing a potentially catastrophic event.
First Things First: Check Your Insurance And Find Proof
Find your insurance documentation – flood, casualty, CGL, and other business-related coverage. For example, some insurance covers business interruption, and you will need to have that handy. Locate not only the certificate of insurance, but also the full policy,
including the jacket. Check the deadline and other requirements for giving notice to the insurer in case of an event that triggers coverage.
Generally, notice must be given as soon as possible after the event. Familiarize yourself with the requirements. Keep the documents in a safe place (uploaded to a service like Dropbox is great – you can access them from anywhere). Take an inventory and photographs/video of the covered property (whether it is real estate, equipment, inventory, or other property) before and after the event, and store these in a safe place as well.
Meeting Contractual Obligations
If there is a possibility that you may not be able to meet your contractual obligations, check the relevant contracts. For example, if you are a grower, will the disaster affect your crops? If so, check contracts with your buyers. If you are a broker, will the disaster affect your communications or affect a key buyer, causing downstream losses?
Also check contracts with vendors – if vendors are affected your business may suffer upstream losses. All of these agreements may have “force majeure” provisions that allow one or both parties to suspend the contract due to a natural disaster or other catastrophic event under certain conditions. Familiarize yourself with these provisions, and safeguard copies of the contracts.
Who’s Protecting The Property?
Do you lease or own the building in which you operate? If you lease, check your lease agreement to determine who has responsibility for protecting the premises. Also check the local landlord-tenant law to understand who is responsible for protecting the property if the lease is silent on that point. The law will also indicate under what conditions and pursuant to what procedures you, as a commercial tenant, may vacate the property and/or withhold rent if a natural event causes damage. If you own the property, make sure it is protected.
Providing For Employees
Consider the impact a disaster could have on your employees’ ability to return to work. Also consider whether you must pay them for the time off. Employers have many legal obligations to their employees. The laws addressing these issues are complex, and you should discuss this with your employment law attorney. You are also required to protect your employees from injury on your premises, which may prompt you to close if conditions are dangerous.
Where To Get Help
The Small Business Administration (SBA) and FEMA have disaster programs for small businesses. The SBA currently has one specifically for businesses affected by Harvey here. You can learn more on SBA disaster programs here. The USDA also has farm loan programs that can help growers in times of disaster here. These resources are available to you thanks to our taxes. Don’t let them go to waste!
[This column is published for the purposes of providing a general understanding of the law. It is in no way a substitute for individual legal consultation and anyone with a legal problem should not rely on these answers but should instead consult their attorney. If you have a legal problem and do not know an attorney, call your local Bar Association’s Lawyer Referral Service.]