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FM Global research quantifies the value of hurricane protection expenditure

Every $1 a business in a threat-zone spends on hurricane protection reduces loss exposure by an average of $105, according to a new analysis by FM Global. To arrive at the ratio, FM Global tallied an estimate for over 10,000 wind and flood related investments and their associated reduction in property loss and business disruption exposure for 1,800 clients around the world from 2008 to 2017. These estimates are calculated based on actual losses that have occurred at tens of thousands of properties insured by FM Global.

“Businesses often wonder if they are getting a good return when they invest in preventing hurricane-related wind and flood damage,” said Brion Callori, senior vice president, engineering and research manager, for the company. “This analysis has yielded a pretty convincing answer. And the 1-to-105 ratio doesn’t even reflect the business repercussions of a major hurricane loss such as damage to reputation, market share and shareholder value.”

Actions to take

To help minimize the effects of costly wind damage, organizations should have backup power generators ready, rooftops inspected and secured, doors braced, windows covered, and vulnerable objects put away or strapped down, including rooftop equipment and solar panels.

Businesses can prevent flood damage by elevating or sealing off valuable equipment, fastening storage tanks, inspecting fire protection equipment, and preparing to turn off utilities. Flood protection products that meet rigorous certification testing standards can reduce the need for sandbags.

Any business exposed to flood risk should invest in developing and practicing a flood emergency response plan(FERP). Facilities with well-organized flood emergency response plans have nearly 70 percent less damage, and resume operations sooner than those with no plan or an inadequate one, FM Global loss history has shown.

For additional information on preparing for natural hazards, visit http://www.fmglobal.com/nathaz



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