Taking control of a nat cat crisis

Q. What are some of the major crisis management and business continuity planning considerations in relation to natural catastrophes?

A. There can be very different approaches when you are dealing with a natural catastrophe. Some organisations are well-prepared, have emergency response plans in place and designated staff to oversee implementation. Other organisations, however, may not have the people or experience to proactively manage complex situations and ensure the efficient restoration of business operations.

When we talk to clients, we try and help them with their preparation and look at their business continuity plans to make sure the right people are involved. When we are working with some of our multinational clients, it is important to make contact with them prior to major events to ensure we have a relationship with the responsible personnel and they know what to do in the event of a catastrophe.

Q: What are some of the common mistakes you see companies make in crisis management and business continuity plans?

A. One thing we see is organisations trying to manage the event on their own. They may be reluctant to involve specialist support, but they may not be able to fully comprehend the implications for the business. Later on, when they realise the severity of a situation, they may request such help. But an early implementation of a structured response plan is a much more ideal scenario.

Often there is insufficient work done by an organisation to deal with loss mitigation at an early stage. If we are dealing with water or fire damage, it might take a great deal of time to recover from a catastrophe. As such, a thorough understanding of the damage is required in order for an appropriate course of action to be identified and commenced. This should see a material reduction in the period of interruption to the business.

Catastrophes often create unique and new questions on insurance policy coverage that need to be addressed.

Q. What are the defining characteristics of the best crisis management teams?

A. They have a robust continuity plan in place, they have tested it, they have a team of people with defined roles and they have performed tests. From a ‘getting back to business’ perspective, the most successful organisations after natural catastrophes are the ones who have planned well and have run different ‘event’ scenarios.

Organisations that know what they are going to do during a catastrophe and welcome the support available from knowledgeable loss adjusters and other appropriate consultants are the types of firms likely to be most proactive in terms of dealing with an event and the most successful in terms of getting back to business.

The best crisis management teams are also able to accept external advice in terms of how to deal with situations. They will engage specialist services where they do not have the expertise and make decisions quickly. There is sometimes a reluctance to involve other companies to help, but the ones getting early expert support will more often than not benefit from superior outcomes.