NU Online News Service, Sept. 9, 4:15 p.m. EDT–Insurance buyers across the country, including many in Midtown Manhattan, have not taken some of the lessons of Sept. 11, 2001 to heart, said an attorney involved in several 9/11 business interruption disputes.
"Have firms changed their BI coverage since 9/11? They should have, and they should be talking to people who know how to read policies and know what the courts are going to do, and look at the implications of their BI coverage in view of 9/11, said Mark Bunim, a partner and member of the insurance and risk management practice at the international law firm Bryan Cave LLP, in New York.
He emphasized that insurance buyers need to be careful when purchasing business interruption coverage. "You should see if it really applies, what are the loopholes in the coverage and how those loopholes should be addressed," he said.
The key is "sitting down and reviewing it with professionals," he said. But he cautioned that not all brokers are qualified to address coverage language issues. "The reality is they are not doing it," he said.
He said outside of Manhattan, when it comes to risk management for a 9/11 situation, "people don't think it's a concern. I hate to say this but the attitude is it's not going to happen here, it's a New York problem."
Some companies, such as Microsoft, are aware that they may be a terrorist target. "They have duplicates of information and programs offsite. But other companies are not thinking about this," he said.
Mr. Bunim related that one of his clients, a large telecommunications company based in the Midwest, was concerned about its telecommunications functions working in New York and other large cities should there be another 9/11, but the company had not planned for such an event at its own headquarters.
Business continuity planning, he said, is essential for all businesses no matter where they are located.
Mr. Bunim said there are two levels of concerns, with employees being at the top of the list.
If an area were to be hit by a terrorist attack, he said the organization, at the very minimum, should do the following:
–Have an orderly evacuation plan for everyone on the premises.
–Have a written plan to effectuate the evacuation.
–Communicate the plan throughout the staff.
The plan, he added, would be the bare minimum necessary for any kind of catastrophe or disaster, such as a fire, power failure or hurricane.
The second concern, Mr. Bunim said, is business continuity planning, which would include storing information offsite as well as information backup.
"I can't begin to tell you how many businesses I represented that used to be housed in the World Trade Center lost their documentation," he said.
One of those companies was "one of the biggest insurance brokers in the world that lost everything and they had no backup," he said. "Things were not scanned and things were in paper format?you know what happened, the buildings fell and the papers were gone."
Businesses need to be thinking about scanning documents, said Mr. Bunim. "Scanning is crucial so that it can be kept offsite in electronic format."
The key question he asks of clients, he said, is "if you're closed down for five days, will you be closed down forever? When people start thinking about that and giving it serious consideration, that's when they start business continuity planning."
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