Bermuda's businesses should be well-prepared during the 2009 hurricane season due to strict building laws and the nature of the Island meaning there is limited damage or flooding.

That is according to David Pagoumian, CEO of NAPCO, which has a base in Hamilton and is headquartered in New Jersey, who told The Royal Gazette that the Island has the right infrastructure in place to withstand a hurricane.

Hurricane Bill passed by Bermuda last weekend without causing any significant damage.

But Mr. Pagoumian believes that any future hurricanes following a similar path could have a big impact if its strikes the north east coast of the US, with many buildings not being constructed to the same specifications as the ones in Florida, which experiences a lot of storm weather during the season.

"Bermuda does have some pretty strict building laws and many buildings are made to withstand a hurricane," he said.

"Bermuda is a very well protected Island - it is basically on a rock, so you are not going to get much flooding there either."

Mr. Pagoumian said there were a number of steps businesses could take to protect their property and bottom line.

"From a business stand point, the first thing to do is look at what your potential for loss is," he said.

"Make sure that your building does not have any loose openings, so that if a windstorm does happen it does not blow open, and make sure that stuff in your yard is buttoned down so you do not get damage from falling objects.

"And, of course, make sure you have adequate coverage."

Mr. Pagoumian said that the insurance industry is at a point where any major event could make it snap, adding that any effect future hurricanes had if they hit the Cape Cod area would be felt further down the line as its buildings generally were not as hurricane proof or resistant as those in Florida, where big claims are paid out every year.

"Carriers are not pricing to the same surcharges as in Florida," he said.

"I suspect that if this event is anywhere near over $20 billion it certainly will be felt down the line and the insurers' rates will start climbing back up.

"The most exposed areas are north of Virginia because it is not protected as well as it should be as hurricanes hit there very infrequently and if it does it could really damage or hurt the industry."

At the start of the January 1 renewal season, NAPCO, one of America's largest, independent, wholesale brokers of commercial property insurance, predicted that the catastrophic segment of the market was expected to experience rate increases in 2009, in contrast to the reductions or flat renewals that characterised the category in 2008.

The company said that the sky-rocketing reinsurance costs were exacerbated by the tightening capital markets and catastrophic damage settlements caused by last year's wind season that included Hurricanes Gustav and Ike.

"Damage caused by Gustav and Ike, combined with several single-location losses in excess of $500 million each, made 2008 one of the two or three worst years on record for catastrophic losses," said Mr. Pagoumian.

According to Mr. Pagoumian, underwriting guidelines had tightened up as the demand for insurance, especially for catastrophe-exposed risks, was increasing and the supply to carriers decreased more rapidly due to a sharp spike in reinsurance costs.

In addition, he said, the general economic downturn has affected the ability of the underwriting community to absorb the financial impact of catastrophic settlements.

In previous years, underwriters could count on gains in the stock and bond market to bolster their balance sheets.