A decade of major earthquakes: lessons for business
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Many regions of the world have been struck by a spate of damaging earthquake events over the last decade. Some of the earthquakes were truly historical, among the largest ever recorded. Others, although of lower magnitude, still caused catastrophic damage.
Building codes and risk preparedness have proved their worth. Mostly, the structural performance of buildings constructed according to the seismic codes has been effective, in particular with respect to saving lives. In terms of economic losses, including for business, however, these have been large. In some cases, surprisingly large, given that earthquakes have also struck countries such as Japan, New Zealand and Chile, global leaders in preparedness for (their high) exposures to seismic risk.
How is that both property damage and business interruption losses for businesses have been so large? There are two main reasons:
- the severity of many seismic events has been beyond expectations; and
- there has been significant damage to non-structural components of buildings.
Businesses can mitigate the loss potential resulting from earthquakes through practical and inexpensive preventative actions, such as securing free-standing machines and equipment through bracing. Such pre-event mitigation measures can also lead to lower insurance premiums for earthquake coverage.