Tom Aderhold and his wife were just sitting down to a late dinner at an Atlanta restaurant when he got the phone call.

It was about 9:30 on a Friday evening in March 2008—a time when many young apartment residents were out at the movies or having drinks with friends. That was the lucky part.

The unlucky part? A tornado had just thundered through one of Aderhold's properties in downtown Atlanta, tearing off the roof and ripping apart bedrooms, kitchens, and living rooms. The total damage to the 505-unit Fulton Cotton Mill Lofts came to more than $18 million.

“It literally peeled the roof back and took some of the walls with it, and in some places the floors,” said Aderhold, pointing out that some of the floors in the old converted cotton mill were eight inches thick, solid enough to park tanks on.

He contacted two people on the way to the scene: his insurance agent, John Knop, with Fireman's Fund Insurance Co., and his vice president, Polly Finch. “She said she'd make a few calls, and I already knew what she was going to do, and she knew what all her people were going to do,” said Aderhold.

The company, which specializes in the adaptive reuse of historic properties, was ready to respond to a disaster, partly because it had been seasoned by a fire at one of its properties a decade earlier. A crane operator threatened by that inferno in 1999 had to be plucked off his perch by a helicopter, in a dramatic rescue broadcast across the region.

This time, no dramatic rescues were needed—but decisive action was. When firefighters showed up to assess the damage and rescue anyone trapped by debris, Aderhold staffers were ready with a “red book”—a document each property the company owns is required to have—outlining where every connection, shutoff valve, exit, and stairwell is located. The company had contact information for every resident and was able to find out quickly who was accounted for and who was not.

After the incident in 1999, “we just realized that if you're not prepared, you look like a chicken with your head cut off,” said Aderhold. “If you have your procedures in place and you're working your plan, everybody stays calm and gets things done.”

Being ready meant rehearsing obsessively for the worst-case scenario. “Me and Polly would go in and say [to property managers], ”˜All right, you've just lost all your power; what do you do?' or ”˜Someone shoots somebody on the property, and you've just heard about it; what's your procedure?'” remembered Aderhold.

And although the company was well-prepared, it also got lucky, he noted. No one was killed, only one person was injured, and the only living creature still missing after the first few hours was a dog, who was later recovered alive under a pile of bricks.

“We happened to have everything in place for people to make decisions and move forward in a quick fashion,” said Aderhold, “but a lot of it is just luck.”

Lessons learned:

  • Rehearse scenarios with your team at each property so they'll know how to respond.
  • Get to know your insurance broker, so you can knowledgeably decide how much risk to take on yourself and how much to allocate to the insurance carrier.
  • “Never believe it can't happen to you.”