When Disaster Strikes Your Electrical Systems


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Electricity is vital to our world and businesses, and our reliance on electrical systems creates a risk. Could you continue operating your business without electricity? Power outages in Texas due to cold weather earlier this year show us that natural disasters can strike anywhere, and at any time – and often have ramifications to critical infrastructure, such as power grids and gas lines.

The many types of electrical equipment, and how often they are used, are things we often take for granted when they work as intended. Your business may rely on one or more of the following:

  • Computer, phone, and other sensitive electronic systems
  • Machinery, pumps, power tools
  • Refrigeration systems
  • Heating and air conditioning
  • Overhead and display lighting
  • Security doors or alarm systems

Should one of these systems or pieces of equipment lose its power source, it could not only interrupt daily work, it could be dangerous and expensive. Costs could stem from physical damage to the system, loss of business income, service interruption, clean up, temporary repairs, and spoilage of perishable goods.

Having an emergency preparedness and recovery plan in place can help your business weather the storm should the power go out. Your plan could include:

  • A key employee responsible for coordinating post-outage recovery of electrical systems.
  • A list of all business critical electrical systems at your business.
  • Plans for mitigating the impact of short-term and long-term loss of electricity, such as moving to backup energy sources like generators.
  • Policies regarding performing regular preventative maintenance on electrical equipment per manufacturer specifications. Inadequately maintained electrical systems are a leading cause of business interruption, poor energy efficiency, equipment wear-out, and breakdowns.
  • A list of employees who are qualified to properly, safely, and effectively maintain and help recover electrical equipment.
  • Contact information for your insurance provider who can respond to coverage and claims questions regarding systems breakdown incidents.
  • Verification that your business has systems breakdown coverage for your line of work.

Severe weather conditions and the havoc they bring are becoming increasingly unpredictable, but having a plan in place to reduce the impact of electrical outages can help your business recover following a storm. Take action today before disaster strikes your electrical system.

When Disaster Strikes Your Electrical Systems (jpg)
When Disaster Strikes Your Electrical Systems (pdf)

This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2021 Federated Mutual Insurance

Federated Insurance

Posted In: ACCA Now, Technology

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