What Risk Management Teams Can Do When a Disaster Happens
If we’ve learned anything in the last few years, it’s that disasters can strike at any time. In recent years, we’ve seen an increase in weather-related events, from hurricanes, floodings, wildfires, and more. When a disaster strikes, it can put the entire organization at risk. However, there are many actions risk teams could take — either before or after — to minimize the impact of the disaster. For the purpose of this article, we’ll be focusing on what risk management teams can do once the disaster has already happened.
1. Carefully Assess the Damage
Once the disaster passes, risk teams need to quickly jump into action. In these critical moments, the initial response sets the tone for recovery.
One of the first things they need to do is assess the damage from the event and take careful notes of it. This assessment phase serves as the foundation for the entire recovery effort. Risk teams must meticulously catalog and document the extent of the damage. This includes evaluating the structural integrity of affected assets, estimating repair or replacement costs, and assessing any environmental impacts that might have arisen.
2. Determine Which Insurance Policies are Involved
As the resident insurance experts within the company, risk teams need to take the time to identify the relevant insurance policies needed to cover the damages uncovered by the assessment in the previous step. These policies may encompass a wide spectrum, ranging from property insurance to specialized disaster coverage (such as flood insurance) and even business interruption insurance. It is crucial to determine which policies need to be used to help the business recover and recoup some of the losses.
3. Immediately Contact the Right People
As soon as they can, risk teams need to reach out to the appropriate contacts — both external and internal — to help them recover from the event and return to normal operations as soon as possible. They should be reaching out to their brokers and carriers. Brokers can provide the risk teams with insights on the best course of action to deal with the event, while carriers can get the claim process going to help the organization recover from the losses. Risk teams should also lean on their internal team members to see if there are any extra hands on deck to help them deal with the aftermath of the event. For example, finance teams can assist the risk teams in figuring out the best way to track the losses.
4. Get Help from a Claims Preparation Consultant or Accountant
It might be beneficial for risk teams to employ the help of a skilled claims preparation consultant or accountant. These individuals are experts at what they do and can assist risk teams in compiling a comprehensive claim package that is clear and impactful. They can draw up documents that clearly demonstrate the organization’s response to the event, highlight what policies are involved, and record all the associated costs. They will be a valuable resource for risk teams as they are trying to get their claims processed and approved.
5. Figure Out a Recovery Plan
The last thing that risk teams need to think about immediately after the event is to come up with a recovery plan. This plan extends beyond the mere reception of insurance claims funds; it delves into the strategic allocation of these resources to effectively rebuild the organization. Risk teams should consider the steps to take towards recovery and create a timeline. They’ll also need to think about what kind of external help they need, such as contractors, engineers, or other specialized professionals.
Crafting a recovery plan is a multifaceted endeavor that involves strategic thinking, meticulous planning, and strategic allocation of resources. By establishing a clear roadmap, enlisting external expertise as needed, and preparing for contingencies, risk teams can navigate the path to recovery with confidence and resilience.
In the face of adversity, risk management teams play a pivotal role in steering organizations toward resilience and recovery. While disasters may strike unexpectedly, proactive actions can significantly mitigate their impact. Risk teams are typically on the front lines, orchestrating the path to recovery. They not only help organizations rebuild but also fortify them against future uncertainties. Disasters may be unpredictable, but a well-prepared and resilient risk management team can make all the difference in the journey toward recovery.