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California’s investor-owned utilities launched a media campaign in the past month to inform residents that tens of thousands of them — perhaps millions — could face hours, or days, without electricity.

PG&E, whose infrastructure was found to be the cause of several recent California wildfires, has warned California residents and businesses it may shut down the power grid for as long as five days for large portions of the state when there are high-wind (Red Flag Warning) conditions. Other energy providers are following suit, with Southern California Edison, and San Diego Gas & Electric warning millions more customers that if extreme fire danger conditions threaten a portion of the electric system serving a community, it will be necessary to turn off electricity in the interest of public safety.

With the specter of multiple-day power outages, businesses need to be prepared to keep their operations going and to prevent losses that may not be covered by insurance. For almost any business today, a loss of power for an extended period of time could destroy its ability to conduct operations.

There a number of steps you can take to make sure your businesses is resilient and functioning during power outages, especially if they last a few days.

Identify business processes that would be significantly affected

Since you know in advance there could be a long-lasting power outage, take steps now to identify business processes that will be impacted by a power outage. These processes differ from business to business, but once they’re identified, it will be easier to make a plan to keep those functions going.

Create a continuity plan

Brainstorm how you can keep your processes going without a reliable power supply. For some businesses it may be possible to maintain a semblance of operations; for others, a power shutdown may force the business to close its doors for the entire duration, or a significant portion thereof. Everything from computer systems, payment processing, refrigeration/cooling, entry and garage doors that won’t open/close to security systems will be impacted. Check over your smoke/fire detection system; most only require a 24-hour, non-alarm standalone power source, with a 5 minute alarm duration.

In order to get back to normal operations swiftly, employees should know how to respond to a planned power outage. Create a step-by-step list of what needs to be done, how, when, and by whom, and in proper sequence, if it becomes necessary for your business to go “off line.” Be sure to include in the planning how to sequentially power your business back up following a planned shutdown.

Back-up power system

To make sure you can continue operating either fully or partially, you may consider investing in a back-up generator. Generators need to be used with adequate ventilation to avoid risk of carbon monoxide poisoning. Never plug generators directly into power outlets, as this can injure utility workers. Never use a generator under wet conditions, and always let them cool off before refueling. You will also need to find out if there are local ordinances and/or permitting requirements that would impact your using a generator, and under what conditions.

If an emergency generator is something you plan on utilizing, it’s best to make the purchase, put it in place, and have a few practice runs using the equipment. You’ll also need a fuel supply for the generator, and a safe place to store it.

Cloud storage and “MiFi” (Mobile WiFi device)

With the threat of power interruptions looming, it is a good time to look into paperless document and file storage on the cloud; a power outage and an accompanying surge could quickly cause loss of data. A cloud server, combined with a system of personal wireless hotspots, or “MiFi” devices, allows you and your employees to finish important tasks requiring web access, such as setting up an e-mail auto-response.

Invest in business Insurance

The best way to minimize any financial blow is to have the proper insurance in place. A multiple-day power outage could negatively impact your income stream and, if you lose money due to your inability to operate, a typical business owner’s policy won’t cover lost revenue; 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 service 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.

For additional information and specifics regarding our Commercial Lessor’s Risk Only (LRO) product, contact Novita Insurance,


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