On August 12, 2015 two large explosions occurred at the Chinese port of Tianjin. The port is the world’s third largest port by cargo volume, and early estimates of total insurance losses exceed $1 billion. Several car manufacturers, including Volkswagen, Ford, Hyundai, and Renault, are among the businesses with large losses that are expected to make claims. In a report released just before the explosion, the industry news website Business Insurance notes disaster claims fell by nearly one-third in the first six months of the year. According to the report, “insurance covered nearly 45% of the losses, up from the average for the past 10 years of 27%.” It is not clear how the Tianjin disaster will affect these numbers.
Disasters, both natural and manmade, pose unique risks for businesses, insurers, and reinsurers, especially in Connecticut. According to the Connecticut Insurance Department’s (CID) Disaster Preparedness and Recovery website, 65% of all insured property in the state is on the coastline, totaling over $560 billion.
Insuring a business may be more complicated than insuring a residence, but it’s just as important. According to a presentation hosted by the Connecticut Business & Industry Association, 40% of businesses do not reopen after a disaster and another 25% fail within a year of one. Connecticut’s CT Recovers website includes an insurance checklist to help businesses insure against economic loss from disasters. In addition to physical goods and property, businesses may also want to insure against interruptions to the business or its supply chain.
CT Recovers and CID also have information to help individuals, businesses, and municipalities prepare for disasters.