Critical Infrastructure Incidents: Do You Know What to Look For?

It’s easy to take critical infrastructure for granted. Like so many essentials, the roads, bridges, railways, and shipping lanes  that allow goods and services to move freely across the country are often only highlighted when they fall into disrepair or suffer a major incident. The immediate consequences of infrastructure failure are obvious, with vital arteries of transit blocked and goods unable to reach their final destinations.

But there are also less obvious, equally problematic issues that arise when   transportation   chokepoints are blocked. Assessing and repairing infrastructure damage is rarely a quick process, and the longer it takes, the greater the potential for business interruptions to occur. Companies can also incur added expenses as they reroute supply chains, potentially delaying shipments and requiring additional labor to keep operations functioning as they normally would.

It isn’t just headline-grabbing events that can cause business interruptions either. Bridge collapses, train derailments, and road failures aren’t an everyday occurrence, but slowdowns and closures because of maintenance are. When disruptions aren’t planned, organizations need to react to those sudden changes quickly.

In trying to organize the unexpected chaos of working around an infrastructure failure, it can become difficult to quantify losses and file insurance claims. There are several steps that organizations affected by a critical infrastructure failure can take to help with the claims recovery process and mitigate some of the difficulties that come with them.

• Communicate with employees and external stakeholders promptly. Clear, open communication about what the organization is doing to handle business interruption can help to alleviate concerns and remain in control of a chaotic situation.
• Review insurance policies. Even if a business does not suffer direct physical damage, it may have coverage for business interruption losses. For example, if a customers or suppliers are unable to ship or receive the business’s goods and services, the insurance policy may include what is referred to as “Contingent Time Element coverage.” Non-physical damage coverage for business interruption losses can also include lack of access to facilities (road, bridge, rail, and waterway  closures), government declarations of emergency, cancellation of events or loss of utilities, among other issues.
• Maintain contemporaneous documentation and evidence of losses. This is a trying time for businesses as they try to quickly adjust and understand the scope of the disruption, but keeping careful records during this time is critical. Email traffic about current market conditions, cancellations of sales, or suppliers and customers being impacted is critical to preserve, as it is a key component of a business interruption claim.
• Seek guidance. A major property claim can take several months to resolve, and it can help to consult knowledgeable professionals who understand the complexity of potential issues that may arise. This also allows businesses to keep their focus on operational adjustments.
• Establish priorities and milestones. Following a major infrastructure event, there are countless moving parts that can stretch resources thin. It is important to identify priorities and establish milestones, so customers, stakeholders, and employees understand the plan for recovery and what benchmarks the organization has achieved throughout the process. 

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