Although such an apocalyptic event should not be the catalyst inspiring risk managers to dust off their disaster recovery plans, South Asia's recent tsunami underscores the need to ponder and enact such plans.
Because both coasts of the United States are susceptible to tsunamis, experts are scrambling to establish warning systems now, before government decision-makers lose a sense of urgency. In the aftermath of the South Asian flood that left 300,000 dead, U.S. officials will spend more than $37 million to establish new deep-sea warning systems that aim for almost complete coverage of North American coastlines. Even if they do not think that a tsunami could happen here, risk managers must realize that either coast could be hit. The concentration of insured properties on either shoreline would propel insured loss to mind-boggling proportions.
No one suggests that risk managers enter their CEOs' offices and, with straight faces, ask, “Hey boss, what's our company's tsunami recovery plan?” (especially if one's employer happens to be in Dubuque, Iowa). That could get you laughed out of the executive suite. Risk managers often have a hard enough time earning corporate credibility for their roles.
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