Natural disasters have been on all of our minds recently. As flood waters fill city streets and massive winds tears trees out of the ground, our focus is on helping the people who have been immediately affected by the storm, but, as the waters recede and the cities are rebuilt, we will find that one group of individuals who have been seriously affected by these natural disasters is hotel investors. Many hotels have sustained massive damage and not nearly all of this damage will be covered by insurance. With this is mind, we’ve created a list of three steps hotel property owners should take to protect their investments.

1. Get Good Insurance
Insuring a hotel can be a complex process, but it is well worth the investment to protect your property as much as possible. Often, this means purchasing several different insurance policies. Reading these policies carefully and truly understanding what they cover is essential. For example, some policies that offer hurricane insurance cover only the water damage caused by falling rain. This mean if water hits the ground then pours under your doors and ruins your hotel, the hurricane insurance policy would not need to cover this damage. You’d need to get a separate flood insurance policy to cover this. In addition, you will find that many insurance policies exclude the most common sort of natural disasters in the areas they insure. This means that most businesses in California don’t have earthquake insurance and most businesses in tornado alley don’t have tornado insurance.

2. Diversify your portfolio
With hotel investments, as with everything else, a diverse portfolio is a relativity safe portfolio. You should invest in hotels located in many different locations so that it will be very unlikely for more than one of your hotels to be hit by the same disaster. If you invest in hotels that are all located near one another, you could see them all damaged at the same time.

3. Have a plan
You need to be prepared for possible natural disasters. You should have a clear plan of what to do in the case of any disaster that is at all likely to strike your hotel. It is very important that every member of the hotel staff knows these plans, as they will be the ones present when disaster strikes. In addition to the obvious items such as when to evacuate, where to go if you need to evacuate, and what to tell guests in case of disaster, your plan should include a clear statement of how an interruption in business will be handled. For example, if your hotel must close for a month for repairs, will you pay your employees?

Natural disasters wreck havoc wherever they occur, but, if you follow these tips, you can decrease their affect on your portfolio.