He noted that the more time a company spends planning for recovery from a disaster the less time it spends in the recovery stage. Effective planning also helps to reduce business disruption, he said.

"It not only allows you to keep the business going, but also keeps the customer happy," Mr. Beyer observed.

Viewing disaster statistics, Arnold Mascali, managing principal with Reliance Services Group and former managing director of Aon's Global Rapid Response practice, said that the number and value of disasters has been increasing since the 1980's, and that risk managers need to believe that a catastrophe is coming and they need to be ready for it.

Generally, companies that are unprepared suffer two fates from a catastrophe: either they lose income or go out of business, said Mr. Mascali.

While many may believe that their greatest fear of loss could come from hurricane, tornado or fire, in fact there are other events that are more likely to cause catastrophic loss, he noted. Among the top causes are accidents, production problems and labor unavailability or shortage.

Stressing the need for communication, Mr. Mascali said that after a catastrophe, many corporate policyholders may find gaps in their insurance coverage. A prime reason for this, he said, is misunderstanding caused by miscommunication between the insured and insurer.

The areas of misunderstanding are usually in terms and conditions, and value of the risk causing the event to be underinsured. Risk managers, he said, need to "make certain that the value is what it costs to replace the property in your insurance plan."

An important aspect of any insurance program to deal with a catastrophe is business interruption insurance, noted Mr. Mascali. He said risk managers need to understand the period of indemnification.

A business interruption policy only covers the period that it should take to get a business operational again. He said it does not cover the additional time it takes to make additional renovations to a property that was not part of the original structure.

Risk managers should also have in place extended period of indemnity coverage that covers from the time a business begins operation again until it reaches a previous level of revenue generation.

The webinar panel was moderated by John W. DeWitt, principal with J.W. DeWittt Business Communications and contributing editor for National Underwriter and Tech Decisions.