After an event is not the ideal time for companies to try to understand the extent of insurance coverage, said a leading broker. So what should businesses be planning for now?
Aon Global Risk Consulting group managing director Neil Harrison has raised awareness among chief executives and directors about the need to have a business recovery plan in place, including understanding the insurance policy in advance, to “make sure the coverage meets what is needed”.
Harrison said too many companies renewed their policy without reviewing their assets and economic value, and this would be important when it came to calculating business-interruption losses.
“None of us are really smart enough to step back and say exactly what could happen, but there are some common themes [to think about],” said Harrison.
“Impact on business, technology, operations, people, processes and within each of those five core areas, there are some recurring best practices that feed in together.”
Among other points, Harrison raised these three:
- Expand risk controls now and they will pay off later
- Get a business-continuity plan in place that can deal with the impact of major events
- Practice and understand how the response will work and if it’s adequate
After spades of recent natural disasters, creating a “challenging environment”, Aon chief broking officer Rick Miller said the best advice he can give is to understand the marketplace as early as possible and know what alternatives there might be out there.