Planning, preparation, and analytics in focus as potentially active hurricane season begins

June 1 marks the beginning of the 2025 Atlantic hurricane season, which could be costly to businesses. Today, the National Oceanic and Atmospheric Administration published its annual hurricane season forecast, predicting a 60% chance of above-average activity in 2025 (opens a new window) (see graphic at the bottom of this page).

Specifically, NOAA anticipates that:

· 13 to 19 named storms will form in the Atlantic Ocean during hurricane season, which runs through November 30.

· Six to 10 of these storms will become hurricanes.

· Three to five of these hurricanes will be major storms — category 3, 4, or 5.

Of course, all it takes is a single storm in a certain location to produce potentially devastating losses for an individual business. That’s why it’s important for all organizations with properties that could be at risk this season to be ready.

Modeling risks

Data is crucial to modeling and quantifying natural catastrophe losses; if your organization faces a loss this hurricane season, your data could make or break your claim. It’s therefore vital that you work with your brokers to ensure you have accurate and complete data about any and all of your properties that could be at risk over the next several months.

At a minimum, you and your broker should focus on three specific areas:

1. Construction, occupancy, protection, and exposure information (also known as COPE data). Specifically, you should:

   1. Ensure you have an accurate inventory of the primary materials used in the construction of buildings and other properties in hurricane-prone regions.

   2. Catalog how buildings and other properties are used and who typically occupies them.

   3. Document any and all protections that exist for properties against various hazards.

   4. Identify potential exposures that could arise from surrounding areas.

2. Secondary characteristics. These include elevation of first floors — to estimate storm surge exposure — along with opening protection, window ratings, and roof types. For most hurricane models, this data is not necessary, but it can help organizations and their brokers reduce uncertainty by enabling more accurate forecasts of potential losses.

3. Insured values. These are often underestimated, which can lead to gaps in property and business interruption coverage. Organizations should work with their brokers to review these values when policies are placed and renewed. Specifically, organizations should ensure accurate figures regarding the total cost of physical structures, their contents — including machinery and equipment or stock/inventory — and business interruption values. Inflation and other financial impacts to your business year over year should be included and updated as necessary.

Using analytics during storm season

Effective data and analytics can also help to inform choices for at-risk businesses when a storm is imminent. Throughout hurricane season, NOAA’s National Hurricane Center will publish regular updates regarding named storms, including their formation, speed, path, and more. Additional details can also be obtained via:

1. Moody’s RMS and Verisk (formerly AIR), two leading hurricane modeling firms, which publish periodic event footprints that can help businesses anticipate potential losses.

2. EigenRisk, which publishes alerts about total insured values and locations within predicted wind bands.

As organizations look to mitigate potential damage, limit operational disruptions and business interruption, and resolve claims more effectively, these reports can be invaluable. For example, EigenRisk alerts — available to Lockton clients — are updated every six hours, providing important context that businesses can use to prepare for and respond to storms.

Getting ahead of storm activity

Ahead of potential losses, businesses should ensure they have business continuity and/or disaster recovery plans they can quickly put into action when a storm is imminent. Hurricanes can bring damaging wind, storm surges, heavy rains, and dangerous flooding. Hurricanes can also bring cyclonic disturbances that form in rain bands and contribute to the formation of tornadoes.

Business owners should consider all of these potential risks as they plan and prepare. Key elements of the planning process should include:

• Defining roles and responsibilities for of employees, contractors, and visitors.

• Cataloging loss prevention steps to be taken when a storm is imminent, including how to safeguard employees, buildings, equipment, and operations.

• Looking ahead to the recovery phase, during which a system for identifying and cataloging all damage and keeping robust records will be essential.

Document, document, document

After a storm and any accompanying danger has passed, businesses should be ready to assess any impacts and report losses to insurers. Businesses should also notify their brokers’ claims advocates, who can provide important support throughout the claims process to expedite financial and asset recovery.

Businesses should also assemble predefined claims teams, drawing on both internal and external resources. Team members and other stakeholders should meet often, including shortly after the storm, and stay in regular communication.

To facilitate the resolution of property and business interruption claims, documentation is crucial. Insureds should photograph or record video of all impacted areas, highlighting anything that is different about the property and the business as a result of the storm. Businesses should also keep track of all extra expenses required to restore normal operations.

Whether you’re planning ahead or facing an imminent storm, Lockton is here to help. For more information or for assistance, contact a member of your Lockton team.