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On Thursday, July 7, Georgia Hauffe and the other managers of the Panama City, Fla., beach merchandise shop Shipwreck Ltd. battened down the hatches. Hurricane Dennis was coming, and their business wasn't but more than a block away from the beach.

"There's not a lot we can do," says Hauffe.

After the storm passed on Sunday, the store reopened with a skeleton crew on Monday. Business was extremely slow--and would be until Friday--but the building and its merchandise within were largely intact except for the freestanding sign in the driveway, which always seems to get torn apart in storms, Hauffe says.

Hauffe says her building has now survived hurricanes Dennis, Ivan and Opal. "So far, so good," she says, though she admits that the all-metal building would probably not survive a direct hit from a really bad storm.

All businesses on the Gulf Coast, or any high-risk region, essentially bide their time with disaster. But according to David Atkinson, who's been an adjuster for more than 30 years, some businesses bide their time better than others.

Much of the defense against hurricanes is built-in to a structure during construction, says Atkinson. For example, some of the best protection for a roof against storm wind and extreme temperature changes comes from the roof itself, a type called a single-ply membrane roof, which was only introduced in the last 20 years or so.

For the high-rise condos and hotels that are now sprouting up above beachfront property all along the Florida coast, Atkinson heralds the structures known as "Lloyd's towers." These structures--devoid of solid surfaces facing the beach--are designed to allow wind and water to pass through, even gut the building, but leave the main structure intact. "It won't give up the ghost," says Atkinson.

Many large companies also safeguard their businesses by buying policies that cover business interruption and ingress and regress. They can also buy what's known as suit and labor coverage, says Atkinson, which ensures that a carrier will use every means available to protect their insured's business.

Atkinson recalls a flood 15 years ago in Alabama that threatened to wash away a box manufacturing company. The company knew the flood was coming. Managers had five days to prepare for it. With the suit and labor coverage, the insurer was obliged to foot the bill when employees moved to higher ground anything not bolted down in the factory. The company rented big trailers in which to store boxes and motors. Then employees greased down the heavy machinery in the factory.

"They just did everything humanly possible," Atkinson recalls. "Then all they had was the cleanup of the factory, the reinstatement of everything, putting everything back together, and a little extra expense."

The box factory didn't suffer biblical damage when the floods came through, and the insurer saved $4 million.

September 1, 2005

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