How to plan for emergency: Double check your back-up scheme

This article first appeared in The Remodelers Journal.

When Hurricane Irene hit the East Coast last August, Harth Builders in Spring House, Pa., got a bit of water in the office, which is located in Allyn Harth, CR, CKBR’s lower-level walkout, but nothing a few dehumidifiers and fans couldn’t easily dry out.

However, when Tropical Storm Lee hit two weeks later, that same office basement—which had been remodeled a month earlier, with new office furniture, paint and lighting—took in 5 feet of water and sustained nearly $50,000 work of damages. That amount doesn’t account for lost revenue from potential jobs fixing other people’s water-damaged property as Harth Builders turned down work in order to deal with its own.

You might be insured—or you might not

Gregory Harth, CR, of Harth Builders felt safe knowing his company had business catastrophe insurance, which paid out when business is interrupted for a variety of reasons. Harth even asked his agent whether that included flooding, which he was told it did. But as it turned out, it doesn’t cover flooding from surface water, which is what occurs when a heavy amount of rain falls and overwhelms existing drainage systems.
Now, Harth Builders is suing to get coverage because there was also sewage backup involved in its office’s flooding.
Lessons learned?
“Make sure you review with your agent and talk through all the possible scenarios,” Harth says.—Nikki Golden
Outside of the obvious items, like damaged furniture and computers, Harth’s job binders were underwater, as were many checks for payment, as the office manager was out of the office the week prior. Checks were found floating around the wreckage and had to be fished out or carefully separated from other debris floating in the water. if you’re curious how to dry out and salvage checks, Gregory Harth, CR, used the oven, set to 250 degrees, laying the checks on cookie trays and monitoring carefully.
The job binders were taken out to the garage, where the company had put new dehumidifiers and fans, as well as drying racks. They opened up the binders as much as they could and left them on the driveway to be dried by the sun, which was the fastest method. Despite their efforts, they ended up only keeping (and drying) the necessary information related to the financials of the job and change orders. The printed e-mail correspondences about the job were trashed.
This experience has led to a new procedure in keeping job binders. “Seeing all the e-mails printed out and thrown away seemed like a waste,” Gregory Harth says. “We’re going to do more electronic filing.”
This will also save the company money.
Although the 10 work stations were damaged, the computer that housed the server was in the conference room upstairs, so computer files remained intact. Some e-mail was lost because it had been archived to the work stations downstairs from the hosted exchange server. However, during the office remodel, the company upgraded its Quickbooks program when they upgraded computers, not realizing that the back-up for these files was pointing at the now-ruined computer, not the server. The company lost about a month’s worth of Quickbooks information.
“Most frustrating, for me, was not knowing where the company was financially,” Gregory Harth says.
It took about two and a half months to recreate and update that lost data.

Why your business might want to pay rent

When Harth Builders, located in the basement of owner Allyn Harth’s house, experienced a flooding disaster, the business had to quickly find offsite space to rent. This process was made easier by the fact that the company already was paying $1,500 per month, plus utilities, for use of the basement and first-floor conference room. This money was able to be quickly allocated to the space found for favorable rent behind Harth Builders’ bank.
Although this move to its own office space was part of the company’s five-year plan (to take place in 2013), the preparation for that—by allocating a budget line item for rent that was in line with what they’d pay for commercial space—allowed for a smooth transition.—Nikki Golden
In the meantime, Gregory Harth says his staff did a phenomenal job of triaging the situation. While Allyn Harth looked for off-site office space, the rest of the management and design team worked from the conference room upstairs. Field operations carried on in full, though the weekly production meeting location was changed.
Within six weeks, the company was back running like nothing had happened.—Nikki Golden
Read the other two stories in the series:

| 3/21/2012 12:00:00 AM | 8 comments
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