English: A diagram of the location of tornado alley and the related weather systems (public domain, NOAA). (Photo credit: Wikipedia)

Tornado season is right around the corner here in the United States.  May and June are typically the most active months of the year for tornado genesis across the Great Plains.  Tornado Alley, as the nickname goes, sees a very large number of super cell thunderstorms which are perfect producers of violent EF2 or greater tornadoes.  The boundaries of Tornado Alley reach from south/central Texas up to northern Iowa and east/west from Missouri to Colorado.  Other areas prone to tornadoes in the U.S. include Florida and the Gulf Coast which is named the Dixie Alley and has a relatively high number of tornadoes occurring in the late fall, October through December.  As many as 1,200 tornadoes hit the U.S. every year and recent years have shown that as our planet’s climate continues to fluctuate we are seeing even stronger storms and resulting tornadoes.  But tornadoes are not limited to just the United States.  In fact, tornadoes occur in many parts of the world, including Europe, Africa, Asia, South America and even Australia.  These regions are more likely to experience increased tornado potential in parallel to the time of year in which increased solar energy and strong frontal storm systems are the norm for that area.  Thus, tornadoes can occur (and do so) pretty much year round on planet earth. [Read more...]

When fire strikes your business it can often be a death blow to any company that is not fully prepared and insured. While storms and floods typically impact a large region, a fire can hit an individual business and leave it defenseless.  The United States Fire Administration (part of
FEMA) reports that financial losses from fire to business (non residential) totaled anywhere from
$3.5 billion in 2008 to $2.4 billion in 2010. In 2010 there were nearly 85,000 business fires in the USA.  Insurance claims for fires can be the most complicated of all insurance procedures. While
other cataclysmic events normally leave debris that can be used for a claim, a fire most often takes away any physical evidence to use in a claim, as well as destroying such things as intellectual
property, computers and paper files.  [Read more...]

Texas Barnett Shale gas drilling rig near Alvarado, Texas (Photo credit: Wikipedia)

Environmental Risks

Sinkhole (Photo credit: Salim Virji)

Sinkholes are depressions or holes in the Earth’s surface caused by the dissolution of a layer or layers of soluble bedrock, usually carbonate rock such as limestone.  Subterranean drainage wears away at these layers, carrying away sediment and eventually causing the area above to collapse.  These sink holes can be very dramatic, as we’ve seen in Florida recently, they can occur in populated areas resulting in structure collapse and human casualties.  Sinkholes are common in the state of Florida due to the geographical makeup of the land.  They can occur gradually over time or very quickly causing damage from as little as cracks in the sidewalk to swallowing up portions of homes and cars.  Florida law requires insurers to cover “catastrophic ground cover collapse” but that does not necessarily mean damage caused by a sink hole will be covered by your policy.  Florida law defines catastrophic ground collapse differently from sinkholes.  As per usual the policy wording is complex with catastrophic ground cover collapse defined as “geological activity that results in all of the following:

1) The abrupt collapse of the ground cover.

2) A depression in the ground cover clearly visible to the naked eye.

3) Structural damage to the building including the foundation.

4) The insured structure being condemned and ordered to be vacated by the government agency authorized by law to issue such an order for that structure.”

Therefore if your home or commercial property sustains damage from a sinkhole but does not meet all four of the catastrophic ground cover collapse definitions (e.g. structural damage sustained but building is still livable/operable) your insurance may deny your claim if you do not have additional sinkhole coverage.  Florida (and Tennessee) insurers are required to offer additional sinkhole insurance as an addendum or rider to an existing policy and for an additional premium.  If you have additional sinkhole coverage and sustain damage from a sinkhole, your insurance company will likely order a geological report that will dictate the cause of damage.   By law you are entitled to an unbiased evaluation if you are in conflict with your insurer over whether or not damage was caused by a sinkhole.  Sinkhole insurance in Florida has been a difficult issue for policyholders and insurers alike.  Premiums for sinkhole coverage have increased significantly last year, with Citizens Property Insurance jumping their rates 50% in some sinkhole prone areas of Florida.  Private insurers have been reported hiking rates up to 200%.  The reason for rate hikes according to insurers is due to the sheer amount of sinkhole related claims received over the past 5 years.  Florida’s porous limestone underground contributes greatly to these types of natural disasters.  It is always a good idea to review your coverage and the risks associated with your building’s location (geographically speaking), with the hope of bettering your chances of compensation in the event of these types of disasters.

Related articles

• Sinkhole Insurance (wjhg.com)
• Homeowners concerned about sinkhole insurance (news4jax.com)
• Second sinkhole appears. Does your insurance cover sinkholes? (csmonitor.com)
• Gainesville, FL Sinkhole Coverage (gatorrealtors.wordpress.com)
• Sinkholes: common, costly and sometimes deadly (cnn.com)
• Workers destroy Florida home with sinkhole (news.blogs.cnn.com)
• Florida is the sinkhole king, but Alabama is not far behind (al.com)

Supply chains act as circulation systems for companies, linking the manufacturing and distribution of goods globally.  In the modern era, many businesses have decreased their amount of local “sourcing” in favor of global supply chains in order to minimize costs and raise profits for their shareholders.  Not only does this type of outsourcing effect the local work force and communities, but it also exposes said business to many new types of risks, including the risk of supply chain disruption due to natural disasters.  A good example of this is the Japanese earthquake which occurred in March of 2011 which de-railed electronics manufacturing thus causing business disruptions in the automotive and tech industries here in the USA.  On October 25^th 2012 Superstorm Sandy struck and damaged many properties and facilities vital to various industries (again heavily affecting the US auto industry) and supply chains along the east coast of the US.   Managing these types of risk has become an increasingly important topic for businesses to address and there is much discussion and assessment of these risks as of late due to its relevance in the modern markets.  The integration of risk management can seem costly for companies.  [Read more...]

Aftermath of September 4th Earthquake in Christchurch, NZ. (Photo credit: Wikipedia)

The city of Christchurch, NZ has endured somewhere around 30 aftershocks since the Feb 22 2011 earthquake that devastated much of the city.   With so much seismic activity occurring in one area, it is impossible to ignore the effects brought on by such events on the residents of Christchurch.  A recent study found that people’s levels of ‘post-traumatic growth’ are higher depending on the amount of traumatic events they have experienced.  Post-traumatic growth refers to a positive psychological change in a person or persons as a result of the struggle with a highly challenging life circumstance.  These circumstances represent significant challenges to the adaptive resources of the individual and pose challenges to the individuals’ way of understanding the world around them and their place in it.  Rebekah Smith, a student at University of Otago, studied post-traumatic growth among Canterbury residents and found 92 per cent of participants reported being stronger after the earthquakes.  Some had said they changed their priorities in life because living through the earthquakes had made them understand what was really important to them.   The study linked a higher number of traumatic events with higher levels of post-traumatic growth, perhaps suggesting the people of Christchurch have undergone a massive re-alignment of life values and priorities.   Results seen in people that have experienced PT growth include: a greater appreciation of life, changed sense of priorities, warmer, more intimate relationships, greater sense of personal strength, and recognition of new possibilities or paths for one’s life and spiritual development.

English: The cathedral’s fragile facade (damaged by earthquakes) is temporarily held in place by shipping containers and haybales. (Photo credit: Wikipedia)

Anxiety (Photo credit: Rima Xaros)

While some residents experience this post traumatic growth, it has been reported that the children of Christchurch are still suffering high levels of anxiety even two years after the earthquakes.  Researchers at the University of Canterbury are conducting a study into the effects of vitamins and minerals, using them to help treat psychological and psychiatric symptoms, such as stress, mood and ADHD.  While some children remain anxious or worried about earthquakes in particular, others have shown signs of stress and anxiety in different facets of their lives such as, friendships, school performance, and overall happiness.  Common symptoms of anxiety in children include sweating, feelings of choking or dizziness, shortness of breath, heart palpitations, being easily startled, restlessness, difficulty concentrating, headaches, stomach aches, body aches and tiredness as well as behavioural symptoms including clinginess, tantrums, withdrawing from friends and family, avoidance of places or objects, not wanting to go to school, shyness and perfectionism.  Researcher Ellen Sole is searching out a small number of children who are willing to try the vitamins and minerals for two months in order to conduct the study.  “Certainly Christchurch children have had to cope with much more than a lot of children do, so we would expect that some of these children will struggle,” she said.

Related articles

• Earthquakes trigger ‘post-traumatic growth’ (stuff.co.nz)
• Posttraumatic Growth following a Relative’s Illness (drvitelli.typepad.com)
• Quake kids still stressed (nzherald.co.nz)
• Alcohol not crutch for quake victims (stuff.co.nz)
• Effects Of Post-Traumatic Stress Disorder (casapalmera.com)