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Nearly all American companies carry property-casualty coverage and life insurance for workers, and some insure against the loss of the CEO or other key employees. Most policies also contain some form of "business interruption" coverage in the event of a natural or man-made disaster. But the coverage may not be adequate to keep your business afloat. "It's worth making sure that your business interruption benefit pays the actual cost of lost profit rather than just overhead," says Robert Rudy of InsuranceNoodle.com a consumer advisory website.
Corporate risk managers are also being advised to bolster existing coverage with new "violent acts" insurance. The coverage is designed to provide benefits not only to employees but to anyone who is on company property--say, a visiting executive--during an attack. Boston-based Lexington Insurance, a division of AIG, began offering the coverage last year and anticipates a flood of calls from risk managers. "It's a product that's been escalating [in popularity]," says Paul Cunningham, vice president of Lexington's casualty division.
--Reconsider Air Travel
On Oct. 2, when Wal-Mart holds its annual analysts' meeting, there won't be a fancy tour of the Bentonville, Ark., headquarters. This year the meeting will be a webcast, as the world's largest retailer decided it would be "more accommodating" to analysts, given the security problems associated with air travel. Says Thacher, Proffitt's Williams, whose firm does a substantial amount of international work: "Our people won't be hopping on planes as easily as before."
More firms will be using audio- and videoconferencing. Global banks and airlines, in particular, have requested that massive 100-line telephone "ports" remain open 24 hours so they can communicate with far-flung managers. One airline has asked the Baby Bell SBC for a conference call with 500 dedicated lines open 24/7. ACT Teleconferencing, based in Golden, Colo., saw its stock rocket 45% on the first day that trading resumed after the Sept. 11 attacks. The stock of a larger competitor, Polycom, rose 30%. Since then, "We've seen a 20% increase in sales volume, and demand has come not just from the United States," says Jerry Van Eeckhout, CEO of ACT. "Some U.S. investment banks have shifted their telecommunications activities to their European outlets." During the Gulf War, he says, the industry experienced robust growth as executives postponed trips of marginal business value. He is now predicting another surge.
When executives do fly in the coming months, many more will be taking a corporate jet. "Whatever movement there's been to corporate jets," says Jules Kroll, "you'll see an increase, as people question the safety of commercial air travel." Traveling by private jet is thought to be safer than flying commercially. No chartered business jet has ever been hijacked. "The whole process involves known quantities," says Cassandra Bosco, a spokeswoman for the National Business Aviation Association in Washington. "You know who the pilot is, who passengers are, who maintains the aircraft."