Prepare for Possible PG&E Power Shutdowns
Business Interruption Coverage Can Cover Lost Income
PG&E has warned California residents and businesses that it may shut down the power grid for as long as five days for large portions of the state when there are high-wind conditions during the dry fire season. That’s because PG&E’s infrastructure was found to be the cause of several recent wildfires.
PG&E sent letters to customers informing them that “if extreme fire danger conditions threaten a portion of the electric system serving your community, it will be necessary for us to turn off electricity in the interest of public safety.” With the specter of multiple-day power outages, businesses need to be prepared for keeping their operations going and preventing losses that may not be covered by insurance.
Just think how difficult it would be if you lost access to your computers, which are the nervous system of any business today. If you have no power, your operations could be shuttered for all intents and purposes.
There a number of steps you can take to make sure your business is resilient and can keep functioning during power outages, especially if they last a few days:
Identify vital business functions
Identify business processes that will be affected by a power outage. These processes will differ from business to business, but once you put them all down on paper, it will be easier for you to make a plan to keep them going.
Create a continuity plan
Once you’ve identified those processes, you should brainstorm on how you can keep them going without your regular power supply.
- Create a plan outlining how employees should respond to the power outage.
- Post emergency numbers on sight for employees to call, including your electricity supplier to get an estimate on when power may be restored.
Back-up power a must
Consider investing in a back-up generator that can keep the critical functions of your firm going during a power outage. Generators need to be used with adequate ventilation to avoid risk of carbon monoxide poisoning. Never plug generators directly into power outlets. Never use a generator under wet conditions, and let it cool off before refueling.
Cloud storage and MiFi
If you have not done so, you should secure a means of paperless document and file storage on the cloud. If there is a power outage and an accompanying surge, you could quickly lose your data. Plan ahead with a cloud server.
You should also prepare a system of personal wireless hotspots, or MiFi devices, so that even when the internet goes down, you can finish important tasks requiring web access, such as setting up an e-mail auto-response.
Consider business interruption coverage
The best way to minimize the financial blow is to have the
proper insurance in place. A multiple-day power outage could really crimp your income stream and, if you lose money due to your inability to operate, the typical business owner’s policy won’t cover lost revenue.
But, a business interruption policy would. These policies will reimburse you for lost revenues due to a number of events, including “service interruption” due to power outages and other utility services interruptions.
The important caveat is that the interruption was not caused by any of your own faulty equipment or wiring. But if the power company is shutting down power, any losses you incur should be a valid claim.