‘Superstorm Sandy - Lessons Learned: A Risk Management Perspective’
As the one-year anniversary of Hurricane Sandy approaches in late October, Allianz Group’s specialist corporate insurer, Allianz Global Corporate & Specialty (AGCS), warns that while there is heightened awareness, many businesses have not yet implemented adequate changes.
A new Risk Bulletin from AGCS entitled ‘Superstorm Sandy - Lessons Learned: A Risk Management Perspective’ examines the cost of the disaster and outlines what businesses need to do now to ensure they can mitigate the adverse financial impact of future storm events.
“Many businesses are not as prepared as they could be. Today businesses need to prepare for the new normal of weather events and this can be a laborious process,” said Tom Varney, Regional Manager for Allianz Risk Consulting in the Americas. “For many companies it takes time—in some cases years—to appropriate funding and actually make the much needed changes. For others it may just be about focusing on the right things at the right time. Allianz is committed to helping clients identify vulnerabilities, mitigate risk and be as prepared as possible.”
Superstorm Sandy - Lessons Learned: A Risk Management Perspective identifies four key steps that businesses can implement now to be better prepared for future extreme weather events:
1. Update and test emergency preparedness plans: Preparation before the storm minimizes property damage and reduces business interruption. Allianz recommends that every business has a comprehensive written emergency response plan that is reviewed and tested annually. A good plan has the support of senior management, site-specific recommendations and clear delineation of responsibilities.
2. Review business continuity plans: The crucial role of business continuity plans has become more apparent as a result of recent natural catastrophes. Sandy hit the Northeast on a Monday, which made it difficult for employees to develop and implement business continuity plans while preparing their homes and families for the storm. A well-developed business continuity plan provides businesses with the tools to get back up and running as quickly as possible.
For many companies, business continuity plans must take a global view as supply chains continue to expand, particularly in Asia and Latin America.
3. Understand your insurance policy: Business owners should take the time to read their current policy and discuss with their brokers what is covered and where there may be gaps. Determine if the limits of liability are in line with the current dollar value of the cost to repair or replace the damage. Consider adding an extended period of indemnity clause to the business interruption coverage to support the business until it returns to its pre-loss financial condition.
4. Know what to prepare for: Planning for a windstorm involves different preparation than planning for flooding. In the case of Sandy, the storm came ashore at high tide on a full, harvest moon. Full moon conditions at the onset of a hurricane lead to increased storm surge heights and the potential for more severe flooding. The majority of Sandy preparation was based on a high wind event, leaving many businesses unprepared for the flooding caused by the storm surge. As more sophisticated tracking models are introduced in the wake of the storm, more accurate information will be available.
Read the document (PDF).
•Date: 16th October 2013 • US •Type: Article • Topic: BC general