WGA InsureBlog

Reports from researchers at Arizona State and UC Irvine who have investigated earthquakes along the San Andreas fault over the past 700 years suggest that Southern California is overdue for a major shock.

These researchers, as reported by the Insurance Journal, outlined that major quakes take place along the Carrizo Plain which stretches 100 miles northwest of Los Angeles every 45 to 144 years. But, it has been since 1857 that the last major quake ranging from 6.5 to 7.9 on the Richter scale took place at Fort Tejon. The research is contrary to previous studies that suggested the frequency of such large earthquakes to be much lower.

If these academics are correct, they are being mostly ignored by the insurance industry. Availability and cost of Earthquake Insurance continues to improve for most buyers. Capacity is up by about 25% Read more…

Virtually no airline is insured against business interruptions as a result of the volcanic ash that has grounded aircrafts throughout Europe causing huge financial losses this past week. But there could be some insurance coverage available for other businesses if the volcano eruption somehow adversely effecting your revenue stream. Do you have a plant or supplier in Europe that had to shut down and cease shipping product to you due to the ash cloud? The ash cloud could be considered volcanic action which is a covered peril on many property policies. Read more…

The U.S. Senate failed to pass an extension of the National Flood Insurance Program (NFIP) last week, which means the program will temporarily cease to issue or renew flood insurance policies. A FEMA memo issued back in October addressed the lapse, or “hiatus” as it was called. At the beginning of March, this also lapsed (2/28-3/2) and was remedied when Congress came back into session, but only for 30 days. Congress has been extending for short periods of time for the last year rather than making a number of changes to the program and extending for a number of years. Read more…

It has been reported that Chile’s recent earthquake could result in up to $8 billion in claims, according to catastrophe modeling company EQECAT Inc. The report released this week says insured losses from the 8.8 quake that struck on Feb. 27 could have insurers paying from $3 billion to $8 billion. The range of potential loss is wide because the estimate is not yet supported by information from the scene of the earthquake, there remains uncertainty as to the extent of infrastructure damage, and business interruption costs depend on the speed at which transportation and utility networks are restored. Read more…

We are finding more companies at risk of being dragged down by a single source supplier or other entity that is struck by a unforseen diasaster.  Ken Hoggins, WGA’s Property expert, explains why a close examination of all the viable parts of a company’s supply chain is crucial to managing risk; risks that not only your own company faces, but those risks that impact the interconnected chain needed to maintain your production and revenues.