While the phrase "disaster planning" typically invokes images of floods, hurricanes or other fits of Mother Nature, disaster comes in many forms—from the death of a CEO to a data breach or system failure; from workplace violence to the loss of a vendor; from a mechanical breakdown to a top sales rainmaker leaving the company.

Disasters—"events," in professional parlance—fall into three categories: natural perils (earthquakes, hurricanes, wildfires); manmade perils (fire, terrorism, workplace violence); and technological perils (cyber breaches, software corruption, system failures), says Ken Katz, property risk control director at Travelers. And even small events can cause significant damage. 

Whether the risk is large or small, most businesses are woefully unprepared. In a 2012 Travelers study, 48% of small business owners said they believe the world is growing riskier. But only one in four (24%) said that preventing, preparing for and responding to risk is a strategic priority. 

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