However well-developed our infrastructure is, and however sophisticated our predictive models become, the truth remains that disasters happen. Major loss events, whether they be natural like floods and earthquakes or man-made incidents like infrastructure failures and blackouts, are inevitable.
Natural catastrophes cost the global economy billions. The Caribbean and east coast of North America is battered by on average six major hurricanes per decade, and dozens of smaller yet still destructive storms every year – each causing significant sums of damage to property and people. Each year, Japan experiences hundreds of earthquakes while the U.S. is hit by over 1,000 tornadoes.
But you don’t have to live in a high risk natural disaster zone to be impacted by a major catastrophe. Flash floods can hit low-lying areas with little warning. Gas explosions, terrorist attacks, and collapses caused by aging infrastructure can impact any part of the world.
The question is, how do we prepare for disasters like these when they happen?
Below are some of the key tips and advice to help minimize the potential impact of being caught up in a natural disaster, and how to respond if you end up in harm’s way.
The human impact of natural disasters cannot be underestimated. Lives can be lost, injuries can be severe, and families can be left devastated by the loss of property. While the sheer magnitude of a major natural disaster underscores the fragility of human life and activity, some simple steps can help us increase our chances of survival.
1) Prepare Essentials
A simple yet important first step, according to the American Red Cross, is to ensure you have a disaster preparedness kit on hand. Just as cars should have fire extinguishers and spare tires, and offices should be equipped with fire alarms, these simple kits can make the difference between life and death if you get caught up in a catastrophe.
While physical safety is by far the most important area for preparation, don’t forget to safeguard key personal documents including medical records, birth certificates, and financial information, whose loss could prove extremely problematic for the holders. Are these stored somewhere fireproof, waterproof and safe? Do you have copies in another, secure location? Are these documents also safely stored online?
2) Make A Plan
Fire drills are now common in workplaces to ensure safe building evacuation in case of an emergency. Do you have similar plans should a disaster hit your home? If not, make one, and make sure those nearest and dearest to you know to follow it. It could make the difference between life and death.
You may know who to phone in an emergency – but what if you are caught up in a disaster, or even a simple accident, and unable to phone by yourself? Do you regularly keep “Who to contact in an emergency” information with you? If not, the American Red Cross suggests carrying a simple card with key details to help the authorities contact those most important to you.
3) Keep Informed
While the best way to avoid being caught up in a disaster is to avoid high-risk situations, the best way to survive a disaster is to know how to respond. Do you know the location of the nearest hospital? If travelling, do you know the local contact number for the emergency services? Consider carrying a list of key local authorities and agencies (i.e., water department, hospitals, schools, etc.) should you need to contact them if you are impacted by a calamity and you are unable to access the internet to find out vital information. This planning ahead could even be as simple as checking the weather forecast to avoid taking unnecessary risks – if flash floods are predicted, avoid low-lying areas.
Even with the best intentions and most complete preparations, not all the risks can be mitigated – but your chances of surviving should be greatly increased.
Ensuring that business operations can continue is one of many goals in the wake of a disaster. “Forward-thinking organizations try to learn from each event and take measures to continuously improve processes to increase their resilience,” says Kieran Stack, COO of Risk Consulting, Enterprise Risk and Business Continuity Management, Aon.
From intellectual to physical property, there are a variety of losses that can be sustained. Below are five steps organizations can take before, during and after an event to ensure proper response:
- Identify and assess which of your sites are most exposed to damage, and to what kind of damages. This assessment should account for damages caused and costs accrued through infrastructure and power failure – including data loss – as well as the initial damage dealt by the disaster. Storing corporate data in the cloud, or hosting it on remote servers or over distributed networks is a good way to reduce the potential for business interruption, while distributing key operations should also reduce overall risk. Many companies also implement emergency response plans that identify and align mission-critical, due diligence steps prior to an event, as well as key tasks during and after a loss event.
- Engage with those who will be key in managing the incident. External individuals could include insurance brokers, property claims advocates, insurance adjusters, legal and financial teams and restoration contractors. Within the company, a leader should be designated who can co-ordinate management following an incident, and teams across the rest of the company should be made aware of what their roles post-disaster might be, in order that corrective measures are taken as efficiently as possible. Also, many companies employ dedicated business continuity planning / management or emergency response teams. These experts are often the organization’s first line of defense for identifying safety, resiliency and communications plans.
- Ensure the safety of employees. Here, planning, practice, and communication are key elements of staff safety. As with the case of private individuals this could involve leveraging Wi-Fi, 4G and other forms of wireless communication that can function in the absence or disruption of telecoms infrastructure. Many organizations also utilize “phone trees,” a cascading list of employee contact options that are designed to account for all staff in the event of an emergency.
- Comprehensively document loss-related assets and invoices. After an incident, collect and manage loss-related invoices, grouping loss-related invoices together by area and type (such as location, structures or equipment) for efficient policy claims, and tracking all in-house costs, such as for labor, materials and other expenses.
- Work with partners to establish an insurance claims timeline, with milestones for claim expectations. Partners can serve as your advocate should you sustain a loss, helping you best document that loss – in both forms and photos – and immediately log the it and help you prepare the claim.
These steps are designed with natural disasters in mind, but can be equally effective for dealing with any unexpected disruption of normal business operations. As Frank Oliver, Senior Vice President of Aon’s Property Claims Preparation, Advocacy and Valuation, says, “When organizations hear the team ‘disaster preparation,’ it can oftentimes be seen as natural disaster – or weather related – events. While those type of events are most common, we can also use the framework to help us think about preparation for a variety of emergency situations.”
Reducing The Impact Of Catastrophes
The National Oceanic and Atmospheric Administration (NOAA) has issued an updated hurricane forecast for the 2016 Atlantic Hurricane Season and they are now forecasting 12-17 named storms, 5-8 hurricanes and 2-4 major (Category 3+) hurricanes between the months of June and November for the Atlantic Basin. This is a slight increase from the May forecast, as the season is predicted to be the most active hurricane season, meteorologically, since 2012.
The question, however, is not whether or not you will be impacted by a major upcoming storm or other major catastrophe. Instead, you should be asking “How well prepared is my organization if a catastrophe does hit?”
It’s never too early to begin preparing for a disaster event. Whether improving staff communication programs, identifying partners, or simply making a list of key emergency contacts – all are important steps in making your organization more resilient.
“The effects of large shock losses on business entities could range from physical damage to company assets, disruption to supply chains and distribution channels and loss of markets. Any one of these impacts can be fatal to a business enterprise that isn’t prepared. Often, a large unforeseen shock loss from a natural disaster will nudge an already flagging company over the edge… Numerous entities fail to include natural disasters in their enterprise-wide risk-management frameworks (if they are doing such risk management at all) and many lack even basic business-continuity plans.” – Glenn McGillivray, Managing Director, Institute for Catastrophic Loss Reduction
“As many as 40 percent of small businesses do not reopen after a major disaster like a flood, tornado or earthquake. These shuttered businesses were unprepared for a disaster; they had no plan or backup systems.” – The American Red Cross
“It’s very difficult to pinpoint specific events happening, but the daily reality is that natural catastrophes are going to happen and we all need to be prepared for when the next major event strikes.” – Steve Bowen, Director, Impact Forecasting, Aon
- Why Every Small Business Needs A Backup And Disaster Recovery Plan – Entrepreneur, June 1, 2016
- 3 Ways To Prepare Your Business For A Natural Disaster – The Business Journals, August 5, 2016
- The Financial Effects Of A Natural Disaster – Investopedia, August 18, 2016
- An Insurance Pool To Cover Natural Disasters? – Business Standard, July 30, 2016
- Aon Disaster Planning Resource Site