Natural and man-made disasters are a fact of life. They are unavoidable, but one can mitigate their potentially devastating effects by planning ahead on how to recover when the unexpected happens.
In the last few weeks, the country faced major disruptions to the lives of people, even if fortunately they did not last long. A cyberattack on a major bank briefly disrupted the payments system on which so many people depend. A storm that lasted just over a day destroyed private property as well as parts of the physical infrastructure of the country leaving some people in distress for years to come.
Expecting the unexpected helps to form the right mindset to plan a business continuity strategy for when disasters strike. Business people, as well as private individuals, know that when major disasters occur the disruption to their livelihoods could be enormous. Years of hard work can be destroyed if one’s business outlets are destroyed by a storm as the country experienced recently.
Insurance solutions should always be an essential part of a risk management strategy for every household or business. It is fallacious to look at insurance as an expense that should be avoided if at all possible. Insurance protection is not as widespread in Malta as it is in many European countries. Many who borrow money to buy their homes may find banks’ insistence on insurance cover on the property as an expensive bureaucratic imposition. Businesses likewise often underinsure their assets, thereby exposing their livelihood to major risks when disaster strikes.
The storm that hit Malta last weekend is just one of some natural phenomena that could disrupt the daily lives of people. The worst effects were suffered by individuals and private businesses. However, the physical infrastructure was also affected.
The scale of damage to the infrastructure may not have been enormous, but luck may not always be on our side. A disaster contingency fund needs to be built to cater for major disasters. This fund can be built up gradually so that when the unexpected happens, the government will be in a position to assist those affected and to restore the damaged infrastructure in the shortest possible time.
The EU caters for emergency support to countries that are hit by natural disasters. The government will undoubtedly try to tap in these resources to compensate farmers, restaurateurs and other business operators for damages suffered and to help them resume their economic activities.
The fact that luckily no lives were lost in the last storm should not lull us into a false sense of security. While the restoration of the damaged physical infrastructure was manageable, some businesses risk bankruptcy as they may not be able to rebuild their destroyed assets. Insurance protection may cost money, but it is money well spent to ensure business continuity in case of major disasters. An educational campaign will certainly help to drive home this truth.
On a national level, the government needs to plan, build and maintain the physical infrastructure to withstand the risks that natural disasters will entail. However, it needs to ensure that when disasters do happen, and the infrastructure suffers serious damage, the financial and human resources will be available to restore the essential services within a reasonable time.
Business continuity planning is the best way to deal with the unexpected.
This is a Times of Malta print editorial