Disaster risks – what are the exposures for companies?

Buckner also strongly advocates that business leaders put disaster risk at the top of their criteria when planning to expand their physical footprint. As executives consider their expansion plans for office locations, plants, and warehouses, they must be aware of the natural disaster risks of selected locations and potentially reevaluate plans to avoid those risks entirely.

How does telecommuting affect business disaster risk planning?

About 5.1 million Canadians worked from home in May 2021, according to Statista. Telecommuting has quickly become the new norm, thanks to the COVID-19 pandemic, and it seems to be here for now.

Organizations should therefore consider how their duty of care policy covers their remote workforce and what assistance they will provide if one of their remote workers is involved in a natural disaster event.

Buckner, who led rescue and response teams in the US after Hurricane Ian hit in late September last year, said hybrid and remote work arrangements have complicated situational awareness for companies during disasters.

“Normally, when a hurricane is forecast for four days, you have in-person meetings and give instructions, then send people home with medical supplies and satellite phones. Run a ‘call tree’ [exercises]. Can you do it again with a video conferencing app? Of course, but the problem is in accounting for your employees who work from home,” he explained to Insurance business.

Global Guardian is a duty of care provider for organizations during disasters, rescue and response, emergency aviation, medical support and more around the world. Buckner himself had first-hand experience trying to find a client’s employees after a terrible storm.

“During Ian’s time, we were tasked with finding people who literally hadn’t been to Florida for almost a year, and the employer just had no idea,” he said. After emails and frantic phone calls failed to reach the missing employees, rescue teams stormed flooded homes only to find them empty.

“It turns out [the employees] he hasn’t been there for a while. So that’s something that companies need to consider when preparing their workforce for these storms, floods or other catastrophic events,” Buckner concluded.

Business leaders should consider remote workers in their emergency response plans, especially when it comes to conducting health and welfare checks. Organizations may also consider placing their remote workforce under business travel insurance policies.

“You would arm an employee who traveled a lot, such as a sales director, project manager or C-Suite member, with business travel insurance. Kidnapping and ransom, medical evacuation and other benefits would be wrapped up in the policy,” he said.

“What we’ve told clients is that they can take that model and turn it around to people who work from home, and just treat them like they’re travelers.”

How do physical extensions affect business disaster risk?

No organization, large or small, can escape the dangers of climate change. But when it comes to planning physical expansions, the risk of natural disasters carries more weight than ever.

“As leaders think [where to build] their next headquarters, administrative office or manufacturing site, the threat of natural disasters must be part of their calculus,” Buckner said.

“Is this place in a flood or fire zone? Will there be enough water in the future? If you’re investing in a Las Vegas headquarters, when the future of the Colorado River as the city’s main water source is dire, that could be a real problem. There will have to be investments in the water pipeline, which makes it more expensive. So I would just say ‘add that as part of your criteria’.”

How can brokers help clients prepare for natural disaster risks in 2023?

2022 was a year marked by climate disasters, and Buckner expects 2023 to be no different. Brokers can help their clients prepare by reviewing their insurance policies and assessing coverage needs to accommodate physical expansion plans or telecommuting arrangements.

Buckner emphasized that creating a robust disaster response plan is critical, especially when it comes to ensuring the well-being and safety of employees.

“What we’ve found is that most companies simply say, ‘We have insurance; we will figure it out. Don’t worry, we’ll take care of everything.’ I just think it’s so missed. There simply has to be more rigor, more communication and more planning,” said the CEO.

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