It won’t take a tsunami to sink British business

This post was written by Tim Lee

The terrible events in Japan are thankfully beyond our comprehension. Unfortunately British business owners are blissfully ignoring the risks surrounding us that could have similar devastating effects on life and property.

 

It’s unlikely that a tidal wave, earthquake or meteor will crash into our island but there are far more obvious perils that are being ignored on the basis that it hasn’t happened yet so it’s unlikely to occur in the future. Our memories are too short…

 

On the 11th December 2005 around 6.00am the Hertfordshire Oil Storage Terminal located near the MI at Hemel Hempstead exploded with such force that it registered 2.4 on the Richter scale. The explosion at Bunsfield was the biggest peacetime explosion in the UK since Flixborough.

 

30 buildings suffered major damage, the ground water was contaminated and the area was cut off for weeks as insurers and engineers assessed the impact of the explosion.  Miraculously only 244 people needed medical attention with no fatalities.

 

Bunsfield was not a catastrophe comparable to that experienced by Japan or New Zealand, but to the operators of the terminal and the businesses surrounding the site it presented similar problems.

 

“It’s your business and you will drive its recovery. No matter how much effort and support you receive from the insurers and loss adjusters it will be you that has to rebuild the company”

 

Now imagine the scene following the destruction of your business. You cannot get access to the site due to the instability of the buildings and the services have been cut to the surrounding area.

 

Years of building your company and its reputation can be wiped away in the blink of an eye. The first few hours are crucial to maintain customer and employee confidence, however too few companies have a disaster recovery or business continuity plan in place to help them handle the situation.

 

It is amazing to interview leading company managing directors and principals who don’t understand the mechanics behind their insurance policy. With only a few simple improvements massive leaps can be made towards containing a major loss and planning is essential in this process.

 

Insurance isn’t magic, its logic. We know that Japan will rebuild and they will learn from the devastation caused by the tsunami. British business must also realise that we live in an unpredictable world and need to wake up to the possibility that fire, floods, terrorist acts all create potentially devastating effects.

 

Planning considerations must not be restricted to just physical events but should also look at interruption to power supplies, customer failures, loss of key personnel and changes in legislation. These events won’t cause physical damage but they can cause massive disruption.

 

If you haven’t done so we recommend that your company, whatever your size, reviews the consequences of a major loss and puts plans in place for recovery. Act now and engage with your insurer to protect your future.

Written by Guest Author

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