WASHINGTON–Lack of planning for a terrorism attack could have a cascade effect on the entire U.S. economy, a Homeland Security official told risk managers and insurers earlier this week.
That makes prompt restoration of industrial production and service facilities in the event of a terrorist attack important for the entire country, the official explained, because Just-in-Time policies have removed much redundancy from the economy.
The implication, said Jim Caverly, director of the Infrastructure Partnerships Division at the Homeland Security Department, is that a strong public/private partnership is critical to appropriate handling of a terrorism incident.
Mr. Caverly's chilling warning was made at a panel discussion, "TRIA: The Final Defense," held by the Risk and Insurance Management Society Inc. as part of the annual "RIMS on the Hill" meeting in Washington, D.C.
"Because redundancy has been removed from the U.S. economy, both private industry and government must respond more quickly" to lessen the impact of a terrorism event, Mr. Caverly said. "Just-In-Time is creating [the need for] just in case."
In fact, he noted, "a terrorism attack provides risks similar to those of a nuclear attack."
The implication is that it's "more important than ever, how you respond to a terrorism attack," Mr. Caverly said. "What are your plans to deal with an interruption?"
Not only should risk managers prepare for an attack, but they need to determine how business partners and suppliers will respond, he said.
Leo Diaz, supply chain manager at United Parcel Service, said Just-in-Time policies regarding critical infrastructures reach beyond the U.S., and have a global impact. He said the situation makes partnerships with government officials as well as suppliers important. "There must be a lot of planning and preparedness," he said, adding the importance of communication with local government.
Another panelist, Liz Gasster, general counsel of the Cyber Security Industry Alliance, said the likelihood of a "severe action" against a telecommunications provider is small because it would require major planning by a sophisticated group.
She cautioned, however, that risk managers should be aware that an attack would create "major congestion." She agreed that private risk managers need to coordinate with state and local governments and other private businesses. Most important, they need to identify the first responders in their area, she said.
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