Earthquake: Is your business protected?
When we think of climate change, we think of floods, forest fires, ice storms and high winds. But what about earthquakes?
Don't underestimate the damage that this kind of natural disaster can cause, and learn more about the available coverage.
What causes earthquakes?
An earthquake is primarily caused by the movement of tectonic plates along deep fault lines in the Earth's crust. Seismic activity varies in amplitude, magnitude and duration, and is measured using the Richter scale (ranging from 1 to 10).
The magnitude of a quake (not necessarily its duration) is what causes damage to buildings, roads, bridges and other infrastructure. The number of aftershocks is also a factor.
Earthquakes at home... really?
Did you know that, in Canada, over 4,000 tremors are recorded every year? In Eastern Canada, we experience about 1 earthquake a day, but few exceed a magnitude of 4. This just goes to show that Canada is not immune to earthquakes.
British Columbia is the most seismically active province in the country.
In Quebec, the Western Quebec and the Charlevoix-Kamouraska Seismic Zones are the regions that are deemed to be more vulnerable to earthquakes because of ancient fault lines and geographical structures. These zones account for 40% to 45% of earthquakes in Quebec annually.
The Geological Survey of Canada, which is responsible for recording all earthquakes, provides seismic hazard maps (This hyperlink will open in a new tab) of all provinces.
What if your business was hit by an earthquake?
An earthquake, even of moderate magnitude, is not without consequences.
In fact, the University of Waterloo and the Intact Centre on Climate Adaptation (This hyperlink will open in a new tab) regularly publish reports quantifying the economic losses of weather events, like earthquakes, in Canada.
When your premises and equipment are at risk
When it comes to moderate-magnitude earthquakes, older or poorly maintained buildings are especially vulnerable. They can also take out expensive equipment that is often essential to your operations.
Earthquakes can disrupt critical systems, damage specialized machinery and destroy valuable inventory. Critical infrastructures, such as power grids, pipelines or telecommunications systems, can also be damaged, leading to prolonged downtime.
That's why it's crucial to invest in preventive measures, such as business continuity plans.
A whole lot of shaking going on
An earthquake can temporarily shut down your business, whether to repair damage to buildings and equipment or ensure the safety of your employees and customers.
The financial impacts of such an interruption include loss of income and unexpected expenses to relocate operations.
And let’s not forget supply chain disruptions and poor customer satisfaction, which wouldn’t do your company’s reputation any good.
Earthquake insurance
Does your basic commercial insurance policy cover earthquake damage.
No. It protects your business against damage caused by fire, explosion or smoke following an earthquake.
Damage caused by earthquakes is not covered—not even with all-risk coverage.
If you want to cover your buildings, equipment and merchandise against an earthquake, then you need to add it.
To determine the amount of insurance your business requires, call your insurer.
What exactly does it cover?
Earthquake coverage covers much more than your buildings and equipment.
It protects your company against the financial losses of business interruption, enabling you to quickly get back on your feet.
In the event of an earthquake…
Would you know what to do?
Here are a few tips.
- Have emergency kits ready.
- Prepare an emergency plan with clear instructions. Communicate it to your staff. Be sure to review your plan regularly.
- In the event of an earthquake, remind the people in your building to:
- stay indoors
- drop to the floor
- take cover under a desk or solid piece of furniture
- hold on to the piece of furniture
After it’s all over, make sure everyone is safe! Inspect the premises and check for damage. When in doubt, evacuate the building.
Have you heard of ShakeOut (This hyperlink will open in a new tab) earthquake drills? These are worldwide preparedness exercises that take place every year in October. Be sure to sign your company up as this is the best way to test your emergency plan... and make adjustments.