Last updated November 2024
The recent devastating floods that hit the Czech Republic, Poland and Spain during this last spring as hot as an endless summer should not make us forget that winter can also hold nasty weather surprises for businesses.
Owners and managers of production sites, warehouses, shopping centres and logistics centres are warned: the sudden arrival of a storm, followed by a severe frost or an exceptional snowfall, can literally disrupt production and the entire supply chain for several weeks.
An insurance policy is certainly a valuable tool against such events. But it is only through a technical visit that we can identify and mitigate devastating risks in time.
In this article we will answer some of the most common questions asked by business owner and managing directors wishing to know about the most serious claims may happen during the winter season and how they can be avoided.
Even Napoleon realised that the cold, frost, snow and ice are no laughing matter: the 2006 tragedy in Poland – near Katowice, where dozens of people died – teaches us that nature does not give anyone a pass.
To confirm this we enclose the statistics of accidents that have occurred since the 1980s, shown in the graph below: it is precisely atmospheric and hydrogeological events such as winter storms, heavy snowfall and frost that cause the most recurrent and devastating damage.
We would like to point out that it is mainly in Europe, where there are highly populated areas outside the big cities, that the effects of bad weather are felt most strongly. Even a moderate storm can literally bring entire industries to their knees, given the proximity of production sites to houses, schools, and motorways.
Here are some of the main questions from those entrepreneurs who are really interested in better understanding what serious risks they face when conducting business. Insurance is good, prevention is better.
“I am managing director of a production site: in the event of a major snowstorm, what are the most frequent consequences I may face?”
Let’s take a practical example: following a major snowstorm, part of the roof collapses and the entire loading and unloading area for goods becomes completely unusable: on top of the major repair costs for the hall and unusable machinery, there can also be serious financial consequences.
Unexpected production stop, failure to deliver goods on time and loss of market share are the main consequences of a sudden and unexpected event that can have a negative impact on company turnover.
‘Our group is managing more then one production site: if one company is shut down for weeks because of a flood, what risks does the whole group supply chain run?’
Let’s say that two production sites are linked by a significant relationship of mutual commercial and industrial dependence: the product processed in one country is shipped to another to be processed and from there sent to customers.
In case one company suffers a business interruption (by fire, flood, winter storm…) we run serious financial risks.
Shrewd companies know this well: it is not enough to insure one company against business interruption! It is warmly recommeded that both are insured and mutually indicated in both policies, so that the financial damage suffered by one does not adversely affect the other.
For further details, see here.
“What are other serious risks that managers and directors must absolutely avoid during the winter season?”
I list five for reasons of space:
- an employee, due to the icy ground, loses control of the forklift and seriously injures a worker
- the driver of a heavy goods vehicle loading at the loading and unloading areas slips on the ice, suffers serious fractures
- the area in front of the production site is blocked for days due to adverse weather conditions, goods can neither enter nor leave the warehouses
- a worker is crushed to death by the pressure of the snow on the roof
- our technicians suffer serious injuries in a car accident during a work winter trip.
“If an employee is injured or loses his life, what do I risk as a company director?”
Directors risk paying damages with their personal assets if it is proven in court that they did not take all appropriate measures to safeguard the health and safety of employees and third parties.
This can happen either inside production sites, shopping centres, sports facilities or during a work mission.
With regard to the former, let us recall what happened in Poland.
Following the collapse of the sports facility in Katowice in 2006, the Polish court a few years ago sentenced the administrator to prison. Although aware of the risk that spectators could run, according to the judges, nothing was done to close access to the public.
With specific reference to work missions, the law requires administrators to set up a proper security policy outside the company perimeter for those employees and technicians also working abroad.
In the event that they are caught in a blizzard abroad and suffer injury or frostbite, they will have to defend themselves before a personal injury court.
“Why is the technical visit in the company so important?
The technical visit has a specific purpose: to provide the entrepreneur and the insurance company with a true picture of the risks to which the company is exposed.
The economic advantage for the entrepreneur is obvious: knowing the risks of one’s own business means being able to reduce and control them.
In this way, ‘virtuous’ companies, after three to five years without any particularly serious damage, can obtain from the company a significant discount on the company policy premium.
But beware: in order to achieve this, it is necessary to appoint experts who are able to survey your business.
Only in this way can we reduce the risks and the insurance premium.
“What are the main measures to be taken before the winter period to reduce the risk of damage to facilities and serious injuries to employees?
During the winter period, as a first step, we recommend taking these simple measures
- remove snow from roofs and skylights: if it accumulates in large quantities, it can cause the building to collapse. Goods and machinery are therefore at risk of getting wet
- clear the loading/unloading area of goods, access points to warehouses, hydrants, control valves of external installations fromice
- inspect culverts, bridges and ditches around the company site to prevent overflowing of river basins and backflow of sewage systems from clogging.
With reference to the company policy, we recommend that you:
- check whether our company’s policy covers the risk of snow/snow/slide pressure
- check whether the policy covers the advance payment of initial emergency expenses, removal of debris, rebuilding of premises damaged by these calamities
- update the insured sums of structures, plant, machinery to avoid unpleasant under-insurance (partial compensation of damaged company assets).
So let us be very careful: ice on traffic routes and workplaces, poor lighting, cold are just some of the main threats to the health of our employees, the owner and his family, and third parties while working in the company.
The recent major floods in Czechia, Poland and Spain teach us that climate change does not differentiate between good and bad weather.
An insurance policy is certainly useful when it comes to indemnifying or compensating for major damage.
But it is only through preventive risk diagnosis and technical visit at your company that we can protect our turnover from devastating events.