Proper preparation is the key to getting through hurricane season, or just about any natural disaster for that matter!

Certain states are more prone to specific disasters than others. In Florida, we have to worry about hurricanes, in California, it’s earthquakes. But your auto dealership does not have to be located in either of these states to worry about disaster preparedness. Just about every state in the union faces the possibilities of some kind of natural disaster, and emergency preparedness can be the key to your dealership “weathering the storm.”

In Florida, the main risk to your dealership are hurricanes and tropical storms. The official Atlantic Hurricane season runs from June 1st to November 30th.

The earliest predictions for the Atlantic Hurricane Season are in, and for now, officials are predicting a “near average season,” which would make it less severe than 2016. According to an outlook just released by The Weather Company, an IBM company, 2017 should see, “a total of 12 named storms, six hurricanes and two major hurricanes, which matches the 30-year average (1981-2010) for the Atlantic basin.”

The University of Colorado has predicted a similar season with 11 named storms. Other forecasts, such as the official NOAA forecast, are not in yet.

However, auto dealership owners should not let the predictions of a milder season than last year, lull them into any sense of security, remember, it only takes one!

Also, dealers need to always keep in mind that it does not take a major land falling hurricane to put your dealership at risk; even a tropical storm can have an impact.

The time is now for all auto dealers in Florida to be prepared!

Preparedness Is Key

Preparedness is key to being ready for hurricanes, or any natural disaster for that matter. Your Preparedness Plan should be broken down into three categories: preparedness for personal safety, preparedness for structural damage, and preparedness for business continuity and recovery.

Preparedness for Personal Safety

As part of your preparedness for the safety and security of staff and customers, it is always a good idea to assign a “captain” or “emergency coordinator,” to take the lead during any disaster. Check among your staff if you have any employees with military, first-aid, or other specialized training that would make them ideally suited for this task.

Have your captain or emergency coordinator check all public safety gear and equipment, including firefighting equipment and first aid materials. Repair and replace faulty items as necessary. In addition to fire safety equipment and first aid kits, you may want to budget for Automatic External Defibrillators (AEDs), and other “shelter-in-place” supplies that may be needed. Make sure all employees know how to access and use these supplies.

Make sure you have an evacuation plan in place so you are prepared should an emergency occur during business hours. Make certain that considerations have been made for employees and/or customers with medical conditions, disabilities, or other special needs.

Dealerships also should have an employee communications plan. This plan starts with each employee having a list of all employee addresses, home phone and cell phone numbers. A call system should be established, with department heads and other “captains” calling designated employees to find out if their homes suffered damage and if they need any assistance.

In addition to having a plan in place for employee communications, you need to know who to contact in an emergency, and how they can help. Be sure you have contact information for:

  • Local and state police
  • Fire department and emergency medical services
  • Local government officials, emergency management office
  • Local public health agency
  • Local American Red Cross chapter
  • National Weather Service
  • Utility companies
  • Neighboring businesses

It is incumbent on dealerships to create a culture of preparedness among your staff. You may want to consider partnering with community organizations to provide preparedness training workshops, or onsite training for your personnel. You should create an environment where preparedness is taken seriously, and all employees know their role during a disaster or crisis.

Preparedness for Structural Damage

If your dealership is in an area that should come under a hurricane watch or warning, you should:

  • Cover all glass windows and doors with shutters, paneling or other protective material, such as plywood or masonite.
  • Use large plastic bags to protect items such as computers from water damage. It is advisable to have a supply of heavy sheeting, air conditioning duct tape and some sandbags set aside for securing first-floor doorways against flood water.
  • Take before and after pictures of the business or plant to aid in insurance or tax credit claims after the storm.
  • Check drains on the roof of the building to ensure they are clear and able to drain off the heavy rain, which usually accompanies a hurricane. Clogged roof drains could cause the roof to collapse from the weight of accumulated water, or cause damage to the interior of the building if water on the roof becomes deep enough to cover vent pipes and run down inside the building.

Physical preparations should include having enough generators – and the necessary gas – to operate the office and other facilities if electricity is off after a storm or other disaster. If you have a built-in generator for backup power, test it under load to make sure it is operating properly.

Dealerships should make special efforts to secure their service departments from potential damage, and to have generators and other equipment that could help those departments quickly return to work.

If you should need to close your dealership and secure and lock it down in preparation for an impending storm:

  • Advise local law enforcement if the business will be empty of people or if security guards will be on site. If guards are to remain on site, their safety should be provided for.
  • Shut down all incoming power, electric, gas and water lines. Before restoring service, check all utilities. If there is a question about the condition of the utilities, call the appropriate company.
  • Disconnect all electrical appliances and equipment such as computers, copiers, coffee makers, electric clocks, calculators, etc. so they do not create excessive surge when electric power is restored.

Preparedness for Business Continuity and Recovery

Business Continuity

Check your policies before their annual renewal dates to make sure that coverage has kept pace with exposure. That review should be extensive for property and casualty policies and for business interruption insurance.

Business interruption insurance is critical. This type of insurance, often called “business income insurance,” provides money to a policyholder for a pre-designated period to replace lost revenue and cover payroll when a business needs to be shut down due to disaster. Dealerships should study their business interruption policies to be certain of what damages are covered. Business interruption coverage usually only applies to on-site damages from wind, fire and other specific perils.

Business interruption policies and many property and casualty policies do not cover flood damage. The National Flood Insurance Program includes the option of buying business interruption coverage for flood damage. Dealers in South Florida need to be particularly concerned about flood damage.

Many business interruption policies do not pay claims when a business is shut due to off-site events, such as electrical damage when a hurricane knocks down power lines.

In some states, many insurance companies do not include coverage for hurricane damage, also known as windstorm, and for earthquake damage, as part of standard property insurance policies. Businesses and homeowners are usually able to obtain separate policies to cover windstorm and earthquakes. Insurance agents can provide details.

The preparation stage also should include daily electronic backups of important documents, files and databases. Dealerships should make copies of those records and store them in an off-site, physically secure facility. Articles of incorporation, accounts receivable, client records and important personnel and administrative documents should be among the priorities for back-up.

Other key business continuity preparation issues include:

  • Credit: Because insurance payments can be delayed, it is important to maintain a sufficient line of credit for business continuation.
  • Tax Issues: Depending on the magnitude of the disaster, federal aid may be available in the form of tax breaks at the end of the year. Thus, it is critical to stay up-to-date on tax policy changes.


After a hurricane or other disaster, recovery for a dealership involves rebuilding the physical structures and rebuilding the financial structure.

Remember, in the wake of a disaster, the main goal should be to restore customer confidence by getting the doors to your showroom back open as soon as possible, which means even a partial reopening may be better than remaining closed.

Here are some specifics, provided by the Florida Automobile Dealers Association that can help your dealership get back up and running more easily after the storm:

  • Locate a source for mobile trailers in the event that your showroom is demolished. These trailers will serve as headquarters for cleanup and will be useful in the event that your sales operations needs to continue from mobile units.
  • Insure that you have a contractor available who can also help you dry out your facilities. Contractors with drying equipment and dehumidifiers are extremely helpful.
  • Talk to the people that handle your trash dumpsters and be sure that you can get additional dumpster facilities for clean up after the storm.
  • Contact area firms for bobcat and front–end loaders for debris removal.
  • Have a team of handy/strong employees who can help your employees at their homes if necessary.
  • Develop a plan for your replacement inventory; several dealers noted that it was important to remove their damaged vehicles before any new inventory can be brought in. It is important to have a plan because there will likely be a delay, and when you decide to return to sales, you may have insufficient inventory available.
  • Most dealerships have tremendous problems locating skilled labor to help with damaged roofs and other structural work. For those with steel buildings, the need to contact contractors in advance is even more important as these supplies may or may not be available after a major storm.

Cash flow and traditional forms of credit may be interrupted in the aftermath of a hurricane or other major disaster. Your dealership may qualify for federal grants or low-cost disaster recovery loans.

How MBAF Can Help

In the aftermath of a storm or other disaster, you may be facing more than merely physical damage as your business tries to recover.

By combining traditional accounting practices and investigative techniques, MBAF can provide forensic accounting services to help give a disaster-stricken operation an advantage should any legal issues arise.

Forensic accounting is also invaluable when insurers question claims and when important financial records are lost. By recreating documentation, forensic accounting can help decipher the true value of property and help rebuild operation processes.

If the “disaster” is more of the man-made kind, we can help there too! If your business is a victim of digital tampering, sabotage or fraud, forensic accounting can help to uncover the truth and resolve problems.

A disaster preparedness plan for your business is one of those things that you have but hope you never use, rather than need and wish you had! Proper disaster planning can go a long way to giving you the peace of mind that comes with knowing that your business is ready, willing, and able to shift into disaster response mode, whenever it may be necessary.


Important phone numbers and websites to have on hand: