The 2020 Atlantic Hurricane Season saw a record-breaking number of named storms. It looks like this year’s hurricane season may also bring above-normal activity. Construction managers in Florida and other hurricane-prone states should prepare for the impact of a difficult hurricane season.
The 2021 Hurricane Season Forecast
According to the National Oceanic and Atmospheric Administration (NOAA), there is a 60% chance of an above-normal season in 2021.
Forecasters at Colorado State University (CSU) are also anticipating an above-normal season. CSU recently updated their forecast and are now expecting 20 named storms, 9 hurricanes, and four major hurricanes. This is above the average for 1991 to 2020 of 14.4 named storms, 7.2 hurricanes and 3.2 major hurricanes.
The Risk to Current Projects
Construction activity is booming. According to the U.S. Chamber of Commerce’s Q2 2021 Commercial Construction Index, both revenue and new business are up. While this is good news for the industry, it also means that a large number of construction sites may be exposed to hurricane damage.
Construction sites are especially vulnerable to hurricanes. Storm surges can cause flood damage, while temporary or partial structures may not be able to withstand the storm. Due to the inherent risks, construction site managers should watch the weather and take quick action if a storm threatens.
Safety is also a concern. Construction equipment, debris and toxic materials can become hazardous during a hurricane, so in addition to securing the site to prevent losses, construction managers should also consider health and safety issues.
Bracing for Increased Demand and Worker Shortages
After a hurricane or other natural disaster, demand for construction services can surge. While dealing with this increased demand, construction site managers are also often dealing with damage at their own construction sites and delays in their current projects.
Prices can surge, as well. The construction industry has experienced massive cost increases for building materials. According to Construction Dive, an Associated Builders and Contractors analysis of BLS data shows a 73% increase in the cost of softwood lumber between January 2020 and January 2021. Iron, steel and steel mill products also saw substantial cost increases. Price increases caused by a natural disaster could exacerbate the current market conditions.
Labor shortages are another issue. The U.S. Chamber of Commerce’s Q2 2021 Commercial Construction Index shows that 88% of contractors are reporting moderate to high levels of difficulty in finding skilled workers. As a result, many contractors are turning down work, having trouble meeting schedules or placing higher bids. The skilled labor shortage has existed for several years now, but a severe hurricane season could potentially exacerbate the problem.
Hope for the Best; Plan for the Worst
As of early July, we’ve seen five named storms, including one hurricane, Hurricane Elsa, that made landfall in Florida. According to the Weather Channel, Hurricane Elsa is the earliest fifth named storm on record in the Atlantic. Many more storms are expected before the 2021 Atlantic hurricane season ends on November 30. While we hope for the best this hurricane season, construction managers should also plan for the worst.
Schedule a commercial insurance review with our team to ensure your coverage is adequate. For example: Are you properly protected for business interruption and pollution exposures? Is all your equipment insured? Are your limits high enough to cover potential property damages, now that supplies and labor cost more? Have you reviewed and updated your Emergency Plan?
We’re Here to Help
Wilson, Washburn & Forster is a boutique independent insurance agency that has been in business since 1961. We have expertise and connections in the construction insurance market and can also help customize the right mix of coverage to protect against the unique exposures of your business. You will find that our experience, claims handling, service, and community commitment is unrivaled.
Contact us today at 786-454-8384 for a complimentary analysis of your current insurance program by an insurance specialist in this field.