Clear on Top

Large scale disasters, like the Gulf oil spill, often serve to remind us of important lessons.  While we hate to see damage and destruction befall others, business owners should learn from their mistakes and take precautions to avoid them themselves.  While a Nebraska-based air charter operation may not be at much risk from crude oil on the beach or hurricane-driven storm surge, every business is subject to various sorts of large and small scale disasters that can shut down its revenue-generating operations long enough to do serious harm.

As operators of aircraft, our insurance considerations often focus on airplane insurance.  The airplane is the focal point of our business.  Airplane damage and injury caused by the operation of the airplane are therefore at the top of our minds.  It is also the number one focus of many aviation insurance brokers.  But, a more complete risk analysis should reveal other risks to an aviation business.  Proper planning for these risks is as important as good airplane insurance policies.

Today, in the coastal areas of Louisiana, Mississippi, Alabama and Florida, many business, large and small, are suffering from a loss of income as a result of a massive oil spill.  While the pundits and politicians point fingers and promise to help the afflicted, there will be some business owners that will be forced to simply shut the doors and walk away from their livelihoods.  We see the same thing happen following disasters of all kinds – floods, hurricanes, wildfires, earthquakes, etc.  All of a sudden, through no fault of their own, restaurants find their tables empty, condos find their units unrented, helicopter operators find their aircraft unneeded and idle.

Business owners should ask themselves the following hard questions:

1)      What is my plan should a disaster (widespread, or affecting only me) befall my company?

2)      What insurance products might be available to assist me during a disaster?  Do I have them?  Are they worth the expense?

3)      If my business is unable to operate for a period of 6 months, how will I retain employee talent, pay notes or rent on facilities, hold on to or replace important customers who will need to seek service elsewhere during my shutdown?

4)      What ongoing expenses will I have during my shutdown?  Am I prepared to pay those expenses?  What will happen if I don’t?

5)      Can I transfer my operations to some remote location in order to remain operational to some extent?  Could I partner with a friendly competitor to support each other’s business, should either one experience a shutdown?

Business owners shouldn’t watch the news and be relieved that it didn’t happen to them.  Good business managers should take the time to examine their own exposure to disaster risk and DO SOMETHING to ensure their continued success – disaster notwithstanding.