One lesson coming out of Superstorm Sandy is that after an event is not the ideal time for companies to try to understand the extent of insurance coverage, says an executive with insurance broker Aon.
In a webinar on the aftermath of Superstorm Sandy, Neil Harrison, group managing director for Aon Global Risk Consulting, says the storm has raised awareness among chief executives and directors about the need to have a business-recovery plan in place. That plan includes understanding the insurance policy in advance to “make sure the coverage meets what is needed.”
Too many companies renew policies without reviewing their company's assets and economic value, says Harrison. This is something that needs to be updated at renewal, and too often is neglected. This will be especially important should it be necessary to calculate business-interruption losses.
Among other points he raised:
- Expand risk controls now, and they will pay off later.
- Get a business-continuity plan in place that can deal with the impact of Sandy type event.
- Practice and understand how the response will work and if it is adequate.
“Post event is not the time to find out how your system works,” says Harrison.
He adds, “Be ready to respond and to take immediate action to remediate your loss.”
“None of us are really smart enough to really step back and say exactly what could happen, but there are some common themes [to think about],” says Harrison. “Impact on business, technology, operations, people, processes and within each of those five core areas, somewhere there are some recurring best practices that feed in together.”
As far as Sandy's impact on the commercial-insurance market in the future, Rick Miller, chief broking officer, Aon Risk Solutions, U.S. property practice, says there most certainly will be some impact on certain areas of the country considered high risk.
Sandy, he says, will be a significant event and it will put some pressure on some insurers.
The best advice he says he can give in “a challenging environment” is to understand the marketplace “as early as possible” and know what alternatives there might be out there.
“Go early, go often and be in conversation with your incumbents and get a sense of where their head is,” says Thomas J. Fitzgerald, CEO, Aon Risk Solutions, U.S. Retail Operations.
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