Ensuring Business Continuity Following an Earthquake

The observance of Earthquake Awareness Week from January 14-20 serves as a timely reminder for businesses to assess their vulnerability to earthquake risks and to take the necessary steps to mitigate potential losses following a major earthquake.

This year, Earthquake Awareness Week will be observed under the theme, “Drop, cover, hold: Earthquake readiness is within our control.”

Joseph Holness, assistant general manager, reinsurance and underwriting, JN General Insurance, emphasised the importance of earthquake preparedness to build resilience.  He indicated that one of the major challenges businesses face in the aftermath of an earthquake is the potential for extended business interruption.

“The devastating consequences of an earthquake can be profound, posing a severe threat to business continuity and financial stability. The frequency and intensity of earthquakes around the world underscore the necessity for businesses to proactively protect themselves against the potential risks of this kind of disaster,” he stressed.

Mr Holness pointed out that the need for businesses to have insurance coverage has never been more critical.

“The extent of the damage to buildings following an earthquake can vary from superficial cosmetic issues to severe structural damage rendering them temporarily or permanently unsafe to use. During this period of uncertainty, insurance proves invaluable,” he said.

“Acquiring insurance is not merely a prudent financial decision but that it is an investment in the long-term sustainability of businesses. Insurance facilitates the continuation of business operations during the recovery period. In addition to structural damage and business interruption, insurance provides compensation against a wide range of consequences, such as lost income, restoration of damaged or lost stock, coverage for ongoing expenses and costs associated with temporary relocation or rebuilding,” Mr Holness pointed out.

The insurance expert explained that by providing financial support during the critical post-earthquake recovery phase, insurance becomes a lifeline, ensuring that businesses can navigate the challenges and resume normal operations as quickly as possible, as well as to keep staff employed.

Mr Holness provided the following tips to business operators to secure their business in the event of an earthquake:

Develop an Emergency Response Plan: Create a comprehensive emergency response plan that outlines specific procedures to follow before, during, and after an earthquake. Ensure all employees are familiar with the plan.

Secure Equipment and Furniture: Implement measures to secure heavy furniture, equipment, and other items that could become hazards during an earthquake. Avoid placing heavy items on high shelves. 

Conduct Regular Safety Drills: Train employees on earthquake safety procedures. Conduct regular earthquake drills to ensure that employees are familiar with emergency procedures. Practise using evacuation routes, establish means of communication, and comply with other safety protocols to enhance preparedness. Encourage staff to stay calm and evacuate to designated safe areas once the shaking stops.

Conduct Assessments of Buildings: Get a professional engineer to assess the structural integrity of your building. Identify and address any vulnerabilities to minimise the risk of structural damage during an earthquake.

“Taking a proactive approach to business continuity protects against potential losses and enhances the reputation for resilience and preparedness of the business,” Mr Holness maintains.