How can your business plan for an earthquake?

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You are currently viewing How can your business plan for an earthquake?

Learn steps your business should take now to plan for a quake

  1. Earthquakes can occur anywhere, at any time, says the U.S Geological Survey.
  2. Man-made earthquakes are a manageable risk. Learn how.
  3. Business leaders should take steps now to prevent earthquake injury and damage. Follow these steps.

They’re unpredictable, shaking the ground when you least expect it. Even occurring in places where earthquakes have rarely, if ever, happened before. So how can your business plan for an earthquake?

Hundreds of earthquakes happen every year, but the vast majority are so small that they’re undetectable by the average person.

This year’s most catastrophic quake so far has been 7.8 magnitude temblor that hit Turkey, followed by 6.4 and 5.8 quakes resulted in 87,000 injuries and 44,000+ deaths; 47,000 buildings were destroyed or damaged. In 2021 it was Haiti that was hard hit by a 7.2 temblor, with thousands of fatalities and injuries. The massive property and infrastructure damage still hasn’t been completely assessed.

Related: How to minimize earthquake damage and injury

Closer to home, the U.S. has been spared such major catastrophes, partially due to stricter building codes, but many areas have felt earthquakes’ destructive power. The 1994 Northridge, CA earthquake registered 6.7 magnitude, causing 57 deaths, thousands of injuries and $20 billion in damage.

The 6.9 Loma Prieta earthquake in 1989 hit the Bay Area, with 67 deaths and more than $5 billion in property damage.

The 9.2 quake that hit Alaska’s Prince William Sound in 1964 resulted in a tsunami, causing more than 139 deaths and $2.3 billion in damages (measured in today’s dollars).

Both the Northridge and Loma Prieta quakes, while very strong, were under magnitudes rated as “Major” (7.0 to 7.9); the 1964 Alaska quake was rated “Great” (8.0 and above) on the Richter scale, says Zurich. The two California quakes show that tremendous loss of life, injury and damage will occur at lower-rated quakes. Population density and a heavy concentration of buildings and infrastructure can make lower-magnitude quakes dangerous. That’s why it’s crucial to have a business plan for an earthquake.

Related: Riding Out the Next Big Earthquake


Man-made earthquakes create manageable risks

While dwarfed by the number of natural earthquakes, man-made quakes still occur fairly frequently. In 2017, a database devoted to these events showed 730 human-triggered quakes over 150 years, says Zurich. Man-made earthquakes can be caused by several common industrial activities such as:

  • Fracking
  • Drilling
  • Mining
  • Wastewater disposals
  • Gas-sequestration sites
  • Dams and reservoirs
  • Large construction sites (e.g., tunnels)

Site risk assessments are essential, says Zurich, not only in deciding whether a project should go forward, but in informing site location, project duration and protection mechanisms to reduce exposures where possible. Risk mitigation (e.g., building retrofitting) and insurance needs also should be at the forefront of planning.

In creating their business plan for an earthquake, company leaders should also consult with their insurance provider or broker to ensure they know what is and what is not covered in the event of an earthquake. This discussion should not be limited to property coverage, says Zurich, as an earthquake may impact workers’ compensation claims, supply chains, liability claims and much more. Companies may also find that some targeted, specialty insurance programs may be able to offer additional protection against potential losses.

Related: Update your natural disaster emergency response plan


How to create your business plan for an earthquake

The U.S. Geological Survey (USGS) says earthquakes can happen anywhere and without warning. Company leaders should consult with local authorities on emergency planning. USGS offers ShakeAlert, an early warning system that detects quakes so quickly that alerts can reach many people before the shaking arrives. They also offer maps and facts about earthquakes and earthquake-prone areas near you.

OSHA provides a series of tips on what to do before a quake:

  • Have employees pick “safe places” such as under a sturdy table or desk or against an interior wall away from windows, bookcases or tall furniture that could fall.
  • Employees should practice drop, cover, and hold-on in each safe place. Drop under a sturdy desk or table and hold on to one leg of the table or desk. Protect your eyes by keeping your head down. Practice these actions so that they become an automatic response.
  • Keep several disaster supplies kits on hand. Here’s what to include.
  • Make a plan for workers to follow in the event of an earthquake:
    • Wait in your safe place until the shaking stops, then check for injuries. Take care of yourself first, and then check the people around you. Watch out for things that have fallen or broken, creating hazards. Be ready for aftershocks.
    • Be on the lookout for fires. Fire is the most common earthquake-related hazard, due to broken gas lines, damaged electrical lines or appliances or previously contained fires or sparks being released.
    • Use the stairs, not an elevator, when you leave a building after the shaking stops. The elevators may have been compromised. Watch for falling debris. Earthquakes can cause fire alarms and fire sprinklers to go off, and you may not be able to rule out whether there is a real threat of fire.
    • Stay outside if you were outside when the quake occurred. Move away from buildings, trees, streetlights and overhead lines. Crouch down and cover your head. Many injuries occur within ten feet of the entrance to buildings. Bricks, roofing and other materials can fall from buildings, injuring persons nearby. Trees, streetlights and overhead lines may also fall, causing damage or injury.
    • Inform workers of the plan and discuss earthquakes with workers. Everyone in your workplace should know what to do if an earthquake occurs. Discussing earthquakes ahead of time helps reduce fear and anxiety and lets everyone know how to respond.
    • Get training. Take a first-aid class from an organization such as the American Red Cross, American Heart Association, or National Safety Council chapter. Learn how to use a fire extinguisher. Keep your training current. Training will help you to keep focused and know what to do when an earthquake occurs.
    • Perform a workplace survey, especially if you are in an area with a high risk of earthquakes, to identify potential hazards to workers if an earthquake occurs. Look for furniture or materials that could fall and strike workers or block means of egress, or cause a release of hazardous materials, or otherwise affect the health and safety of workers due to utility loss or system/structural failure. Follow mitigation techniques recommended by FEMA for equipment and furniture.
    • Hazardous substances. Employers whose workers will be involved in emergency response operations for releases of, or substantial threats of releases of, hazardous substances regardless of the location of the hazard must comply with OSHA’s Hazardous Waste Operations and Emergency Response (HAZWOPER) standard, 29 CFR 1910.120. This may include emergency response following an earthquake. Instruction CPL 02-02-073 describes OSHA enforcement procedures under the relevant provisions of the HAZWOPER standard.
    • More planning tools are available on and FEMA.

Agents, take a look at our Residential Earthquake Program to add to your portfolio of insurance solutions.

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