@Risk

Yesterday, business leaders were reminded once again that they need to prepare for a widespread outbreak of the H1N1 flu.

Gary S. Lynch, managing director, global leader of Marsh Risk Consulting, Supply Chain Risk Management, spoke at a luncheon of the Association of Professional Insurance Women in New York and said that he believes most U.S. companies remain unprepared to realistically deal with a flu outbreak.

Why? According to National Underwriter, Lynch cited several reasons, including the relatively few number of fatalities associated with H1N1 to date and a general complacency that seems to have set in after months of repetitive headlines about swine flu.

As I mentioned in an earlier post, a recent study by the Harvard School of Public Health found that the vast majority of firms (84%) are concerned that a widespread outbreak will negatively affect their business. Still only one-third of those in the survey said they are prepared to sustain their business without severe operational problems if half their workforce were absent for two weeks due to H1N1.

Obviously, we’re at the point where preparation is critical, and if you’re not preparing, you’re putting your company at significant risk. For instance, Lynch warned that organizations have to consider the full impact of supply chain interruptions. What if a supplier somewhere downstream has to shut down because of high employee absenteeism? Even worse, what will happen to your business if one of your primary suppliers is severely impacted by H1N1?

Don’t rely on insurance as a risk transfer mechanism, Lynch added.  Insurers have excluded flu-related claims from their policies, he said in the article.

Here’s an ironic post-script: Believe it or not, Karen Avery, Marsh’s U.S. Business Continuity Management Practice was originally scheduled to give yesterday’s speech. It turns out that she had to cancel at the last minute because –you guessed it –she had the flu.