Hurricane season presents significant legal and operational challenges for North Carolina businesses.

Whether it’s a hurricane hammering your business, floodwaters threatening your property, hail damaging crops, or ice storms causing an extended power outage and disrupting your company, you’ve suffered harm from the worst that North Carolina weather has to offer. During the last five years, government shutdowns, supply chain disruptions, material price increases, and substantial and costly property losses resulting from natural disasters like Hurricanes Florence, Dorian, Isaias, and, most recently, Helene have highlighted for business owners the importance of making it a routine business practice to take stock of the types and extent of insurance coverages their businesses have in place.

This article provides North Carolina business owners with a list of legal topics for hurricane preparedness, drawing from the extensive expertise of Ward and Smith, a leading law firm with offices across the State. 

Critical Legal Areas for North Carolina Hurricane Business Preparedness

1. North Carolina Business Insurance Coverage and Hurricane Claims Management

Avoiding the “Set It and Forget It” Insurance Mistake for NC Businesses
Regular review of your insurance portfolio is essential, particularly as your business evolves and risks change.  Discuss with your insurance agent any changes in your business and determine whether increased coverages or additional policies may be needed.

Understanding Your North Carolina Hurricane Insurance Coverage
Flood insurance most often falls under the purview of the federal National Flood Insurance Program, administered by the Federal Emergency Management Agency but written by private insurers. Matters related to wind, rain and hail damage, on the other hand, usually fall under separate policies with separate rules. Business interruption insurance may fall under yet another policy.

Key questions to ask about your coverage:

• Replacement Value vs. Actual Cash Value: Do I have a “replacement value” or an “actual cash value” policy?  The difference in coverage could be dramatic, particularly as buildings get older.
• Mold Coverage: Do I have a “mold” sublimit? If so, what is the amount of the sublimit? Windstorm damage often means water intrusion into homes and buildings, caused by things like a falling tree, a broken window from debris, or compromised shingles.
• Business Interruption: Do I have “loss of use” or “business interruption” coverage? For business owners, some policies provide “business interruption” and/or “extra expense” coverage that may pay for a replacement business location, for amounts of revenue that were lost due to work stoppages, and the cost of atypical (for the business) expenses incurred.

Critical Flood Insurance Compliance Requirements
Flood insurance policies have strict rules, both as to timing and substance.  As one example, a “Proof of Loss” form must be submitted to the insurance company within 60 days from the date of loss unless FEMA has published an extended deadline.

Under Federal law, the deadline for submission of the Proof of Loss is strictly enforced. A submission even one day after the deadline is a valid basis for an insurance company to deny a flood claim.  Consult an attorney to be sure flood insurance deadlines are met.

Hurricane Insurance Claims Management for North Carolina Businesses
After storm damage, the insurance company will send an adjuster to assess what has occurred and what (they assert) it will cost to correct the damage. The insurance company might also deny coverage for all or a portion of your claim.  If coverage is denied, an attorney can help you understand how to challenge the insurance company’s initial decision.

It is difficult, if not impossible, for the average home or building owner to know whether the insurance company’s adjuster has accounted for all of the resulting damage and corresponding work that must be done and whether the adjuster has fairly priced that work.  A quality contractor or a public adjuster can be important resources to determine that the insurance company has provided both an appropriate scope of work and enough dollars to complete the needed work.

Warning Signs of Problematic Claims
Some warning signs that you need to consult a professional regarding your claims are: the insurance company retains an engineer to issue a report; the insurance company denies all or part of your claim; your contractor informs you that the insurance company isn’t willing to pay for a portion of the intended repair, or your contractor informs you that the insurance company has allocated enough funds to complete the work. 

2. North Carolina Employment Law Considerations During Hurricane Disasters

Hurricane Weather Wage and Hour Compliance for NC Employers
A common question is whether or not employers are required to pay employees when weather is bad or the office is closed. The answer depends on the type of employee and the employer’s policies.

Non-Exempt Employees
Employers are not required to pay employees who are not exempt and are paid on an hourly basis under the Fair Labor Standards Act (FLSA) when the employee does not come to work. Therefore, if the office is closed for all or part of a workday, the employer only needs to pay the non-exempt employee for the time during which he or she was actually at work.  Exception: employers must check to see if they have an employment agreement, offer letter, or other writing that promises the non-exempt employee certain compensation when not working (such as a minimum guaranteed weekly salary).

Exempt Employees
Regarding exempt-level employees, employers are required to pay them their regular pay for that workweek unless the natural disaster dictates that the business be closed (or the employee cannot perform work remotely) for the ENTIRE workweek.

Employee Leave Requirements During NC Hurricane Emergencies
Many of the usual cast of “leave” characters also come to bear during natural disaster scenarios. For example, an employee who is entitled to take, and does meet, Family Medical Leave Act (FMLA) requirements for an FMLA-covered entity may take unpaid time off from work.  This may occur during a natural disaster if an employee experiences a serious health condition, or needs to care for an immediate family member with a serious health condition.

Military Leave During Hurricane Disasters
During a natural disaster, employees who are part of the National Guard or other uniformed services may be called into active duty. Unlike training, orders for active duty during a natural disaster are likely not scheduled, so employers should be prepared to not have access to applicable employees in such situations.

OSHA Safety Requirements for NC Businesses During Hurricane Season
The Occupational Safety and Health Administration (OSHA) requires employers to provide safe and healthy working conditions. Employers should consider whether requiring employees to report to work during a natural disaster could pose safety concerns and/or trigger employees to file a complaint with OSHA.

North Carolina Regulatory Compliance and Hurricane Rebuilding Permits 
Beyond insurance and weather damage issues, there are federal and state laws that may regulate how you can recover. In some cases, regulations may prevent damaged structures from being completely rebuilt in their existing locations.

Environmental Compliance for NC Hurricane Recovery
Ward and Smith’s Environmental Law practice provides robust representation in administrative and regulatory matters, including compliance with federal and state environmental regulations (Clean Air Act, Clean Water Act, RCRA, CAMA, North Carolina Mining Act, etc.).

Hurricane Season Business Preparedness Checklist for North Carolina Companies

North Carolina Employment Law Compliance for Hurricane Season

• Develop an Inclement Weather Policy: Having an inclement weather policy is a helpful tool for employers. The policy should clearly state whether or not non-exempt hourly employees (1) will receive pay for missing work due to an office closing and (2) must apply accrued PTO or vacation time if the office is closed.
• Create Emergency Leave Policies: Many employers choose to have an unpaid leave of absence policy that allows employees a certain amount of time away from work, without pay, due to personal reasons.
• Prepare for Military Call-ups: Understand USERRA obligations for National Guard and reserve employees.
• Establish Employee Assistance Framework: Research Section 139 IRC provisions for tax-free disaster assistance.
• Review Safety Protocols: Ensure OSHA compliance for employee safety during storms.
• Document Remote Work Capabilities: Establish clear policies for work-from-home during emergencies.

Legal and Regulatory Compliance for North Carolina Hurricane Recovery

• Review Building Codes and Zoning Requirements: Understand restrictions on rebuilding damaged structures
• Assess Environmental Compliance Needs: Prepare for potential environmental issues post-storm
• Review Commercial Contracts: Ensure force majeure clauses are adequate and current
• Prepare Required Notifications: Understand which agencies must be notified of business disruptions
• Maintain Updated Legal Contact Information: Ensure you have current contact information for legal counsel

Physical Property Protection for North Carolina Hurricane Season

• Conduct Property Vulnerability Assessment: Identify structural weaknesses and flood risks
• Implement Preventive Measures: Install storm shutters, reinforce roofing, clear drainage systems
• Secure Outdoor Equipment: Plan for securing or removing outdoor business equipment
• Maintain Emergency Supplies: Keep generators, flashlights, first aid supplies, and emergency communication devices
• Review Utility Backup Systems: Ensure backup power and communication systems are operational

Post-Hurricane Recovery Planning for North Carolina Businesses

• Establish Damage Assessment Procedures: Plan how to safely and thoroughly assess storm damage
• Prepare Insurance Claims Process: Understand how to document damage and file claims efficiently
• Create Vendor Contact Lists: Maintain updated contact information for contractors, repair services, and emergency suppliers
• Plan for Temporary Operations: Identify how business will operate during recovery period
• Establish Employee Return-to-Work Protocols: Plan how to safely bring employees back after the storm

Hurricane Legal Pitfalls: Common Mistakes North Carolina Businesses Must Avoid

Hurricane Insurance Mistakes That Cost NC Businesses Money

One of the costliest mistakes businesses make is underinsuring their property. Increased market costs for labor and material translate to increased repair and rebuild costs, which may mean your once appropriately insured-to-value commercial property is now underinsured. This gap becomes painfully apparent only after a disaster strikes, leaving business owners responsible for significant out-of-pocket expenses during an already challenging recovery period.

Equally dangerous is missing critical NFIP deadlines. Many business owners are unaware that a submission even one day after the deadline is a valid basis for an insurance company to deny a flood claim. The federal regulations governing flood insurance are unforgiving, and unlike North Carolina state law, there are no grace periods or extensions unless specifically authorized by FEMA. Business owners who fail to submit their Proof of Loss within the strict 60-day window often discover they have no recourse, regardless of the merits of their claim.

Inadequate documentation represents another significant pitfall. Failing to properly document pre-storm conditions and post-storm damage can severely hamper insurance claims. Insurance adjusters rely heavily on documentation to assess damages, and without proper records, business owners may find themselves unable to prove the extent of their losses or the pre-storm value of their property.

Hurricane Employment Law Violations in North Carolina

Employment law violations during natural disasters often stem from well-intentioned but legally problematic decisions. As with most human resources issues, the primary goal should be not to respond with a knee-jerk reaction to pay, leave, and/or other employee issues when natural disasters strike. Improper wage payments are common when businesses fail to understand the different requirements for exempt versus non-exempt employees during office closures and emergency situations.

Safety violations represent another serious concern. Requiring employees to work in unsafe conditions during or immediately after a storm can expose businesses to OSHA complaints and potential liability. The pressure to resume operations quickly can lead to poor decision-making that puts workers at risk and the business in legal jeopardy.

Employee complaints may arise during disaster recovery. Employers should not take adverse action against employees for engaging in protected concerted activity under Section 7 of the National Labor Relations Act (NLRA). Employees may legitimately complain about unsafe working conditions or inadequate disaster response, and disciplining them for such complaints can result in significant legal consequences.

North Carolina Hurricane Rebuilding Regulatory Compliance Failures

Rebuilding without proper permits represents a common and expensive mistake. In some cases, regulations may prevent damaged structures from being completely rebuilt in their existing locations. Business owners eager to resume operations may rush into reconstruction without understanding changed zoning requirements, flood plain regulations, or building code updates that have occurred since their original construction.

Environmental violations during cleanup and rebuilding can create long-term legal and financial consequences. Businesses may inadvertently violate environmental regulations when disposing of storm debris, cleaning up contaminated materials, or rebuilding in environmentally sensitive areas. These violations can result in substantial fines and delays that compound the challenges of post-storm recovery.

When North Carolina Businesses Should Seek Hurricane Legal Counsel

Understanding this complex web of laws and regulations after — and before — a storm strikes is critical. After surviving a hurricane, or amid preparations for a future disaster, you should be able to rely on expert help.

Consider consulting with legal counsel:

• Before Hurricane Season: To review insurance coverage and develop compliant policies
• During Storm Preparation: For guidance on employee obligations and safety requirements
• After Storm Impact: For insurance claims assistance and regulatory compliance
• For Claims Disputes: If an insurance claim drags without a response from the insurance company, an attorney can help by providing a more formal means of communication to the insurance company with the goal of moving the insurance claim forward while monitoring any applicable legal deadlines for the owner to file suit.

Conclusion: Hurricane Legal Preparedness for North Carolina Business Success

While we can only hope that the next natural disaster is far away and that winter is not coming, employers will be better prepared if they revisit issues that pop up during inclement weather. Now is the time to create or revise employee policies so that your survival toolkit is stocked before the next storm.

Hurricane preparedness is not just about protecting physical assets—it’s about ensuring your business can comply with complex legal requirements while maintaining operations and protecting employees. Though you can’t stop a hurricane, you can take steps to prepare for one.

The legal landscape surrounding natural disasters is complex and ever-evolving. Our lawyers are committed to staying up-to-date on the shifting legal and regulatory issues related to natural disasters, as well as understanding the business aspects of natural disasters. By taking proactive steps now, North Carolina business owners can better protect their enterprises, their employees, and their communities when the next storm inevitably arrives.

Remember that an ounce of prevention is worth a pound of cure. The time to prepare is now, not when hurricane warnings are issued. Use this guide and checklist to ensure your business is legally and operationally prepared for whatever North Carolina’s hurricane season may bring.