Although such an apocalyptic event should not be the catalystinspiring risk managers to dust off their disaster recovery plans,South Asia's recent tsunami underscores the need to ponder andenact such plans.

Because both coasts of the United States are susceptible totsunamis, experts are scrambling to establish warning systems now,before government decision-makers lose a sense of urgency. In theaftermath of the South Asian flood that left 300,000 dead, U.S.officials will spend more than $37 million to establish newdeep-sea warning systems that aim for almost complete coverage ofNorth American coastlines. Even if they do not think that a tsunamicould happen here, risk managers must realize that either coastcould be hit. The concentration of insured properties on eithershoreline would propel insured loss to mind-bogglingproportions.

No one suggests that risk managers enter their CEOs' officesand, with straight faces, ask, “Hey boss, what's our company'stsunami recovery plan?” (especially if one's employer happens to bein Dubuque, Iowa). That could get you laughed out of the executivesuite. Risk managers often have a hard enough time earningcorporate credibility for their roles.