RETAILERS URGED TO PLAN FOR DISASTER SURVIVAL

JOEL ELSON

CHICAGO -- A good disaster plan will enable a chain involved in a calamity such as an earthquake or a hurricane to get stores reopened quickly, an insurance industry consultant said.

"All disasters are survivable, which is the goal of a good disaster plan," Joseph Dotoli, managing director of the property division of Toplis & Harding, said here at the annual Food Marketing Institute's convention and educational exposition.

Dotoli was a speaker at the FMI workshop, "Making Sure Your Property Insurance Covers Your Losses."

Dotoli said good disaster planning spells out in advance of a catastrophe the amount of time equipment vendors -- such as cooler suppliers -- need to replace the refrigerated cabinets if they are new at a store and how long it takes to repair older equipment. "This is especially important because supermarkets with an increased variety of prepared foods rely more on refrigerated cases," he said.

Contingency plans might well include provisions for bringing in portable battery-run scanners for checking out customers and maintaining accurate pricing, sales and inventory records, Dotoli said. Additionally, sound disaster planning should spell out steps needed to provide insurance adjusters with inventory values used for validating claims, he said. Besides carrying property insurance on the building, retailers would do well to consider protecting themselves against other potential losses that floods or fires could cause to store stock, inventory and equipment.

Dotoli also highlighted the importance of carrying building code upgrade coverage in property policies that offer protection against the possibility local or state governments may mandate code upgrades. These regulations could require unexpected upgrading of older facilities undergoing remodeling as a result of a disaster.

"Even when only 10% of a building has been damaged in a disaster and needs refurbishing, you'd have to complete code upgrades and in some cases bring an older facility into costly compliance," he said. Insurance coverage also can protect against "the silent killer of lost supermarket business, the time lost when the store is down and the doors are closed."

Dotoli said designing business-interruption insurance protection should take into consideration lost business.