If you lease your business property, hold your landlord accountable for maintaining high standards of safety. If you own your building or aren't satisfied that you're getting what you need from your landlord, contact your local fire and police departments. They'll work with you to ensure that you have a good evacuation plan in place. Given the threat of bioterrorism, it's also a good idea to determine which hospital is closest to your business and best able to administer antibiotics or other medical care in the event of a mass attack.
For those whose businesses and facilities are significantly complex, it's worth investing in a professional safety and security evaluation. Decision Strategies and Kroll are the two most prominent companies in the nation that offer such services, but there are many other reputable companies nationwide. Among the best places to get a recommendation for a safety consultant are the local police and fire departments and the company that installs and services your alarms. Most companies can expect to pay anywhere from $1,000 to $25,000 for an evaluation, but that doesn't include any new equipment that they might need to purchase.
Before the consultant starts to work, and well before a written report is issued, a business owner would be wise to discuss budget parameters for safety and security upgrades. There's very little point in getting a recommendation for a plan that you can't implement because of cost and that might one day spur litigation -- if a written report suggested that you take steps that you then ignored, for instance. But a limited budget is no reason for inaction. Even if you bypass costly upgrades, most safety and security consultants can give you a plan that could save lives. And yes, there have been rumblings that not being proactive, even in the event of a terrorist attack, could leave a business legally liable for failing to ensure the safety of its employees. --E.S.
I'm concerned that my insurance might not cover me if an act of terrorism forced me to shut down. What can I do?
Before September 11, insurance coverage against property or business-interruption damage as a result of a terrorist attack was routinely included in a comprehensive-risk policy for little or no additional cost. Not so afterward.
Then, this past November, President Bush signed into law the Terrorism Risk Insurance Act, which requires that all commercial insurers offer terrorism coverage for the next three years. Under the federal program, the government picks up the tab for 90% of an insurer's losses after the company has met a sliding deductible (from 7% of an insurer's earned premiums in 2003 to 15% in 2005). The program is capped at $100 billion.
Just because the coverage is available, though, doesn't mean that insurance companies have to make it affordable, especially for people who live in a major metropolitan area that's deemed to be at high risk. That leaves small-business owners in big cities with the option of paying a hefty premium or opting out of terrorism coverage. "The law doesn't mean that the insurance is easy to get or less expensive," says Loretta Worters, vice-president of the Insurance Information Institute, in New York City. But if you really need it, it's your legal right to demand it. --R.K.
In the aftermath of a war with Iraq, what's the economic climate likely to be?
In the event of a quick and decisive war, the impact in the following quarter would be negative, but afterward the economy would do better, says Laurence Meyer, a Federal Reserve governor from 1996 until 2002 who is known as one of the nation's best economic forecasters. Meyer recently convened a panel of distinguished economists to address various postwar scenarios. In the case of a "benign" outcome (a victory with limited civilian and military casualties and no major terrorism in reprisal), the economy would actually grow half a percentage point faster in the year, he says. "Under that scenario, there's a relief rally in equity markets, consumer confidence rebounds, and we eliminate some of the uncertainty that I think has been very paralyzing right now to business decisions." Meyer's experts pegged the chances of a "benign" outcome at 40% to 60%.
For many in small business, such an outcome would provide immediate relief. "Particularly in my industry, in telecommunications, everything is stalled," says Frank Tucker, CEO of Tucker Technology, an Oakland, Calif., Inc 500 company that provides voice and data applications. "So if there's a quick and benign outcome, boom, we got it over with. Now we can move forward."
Renewed domestic or foreign terrorism, or severe and continued hostilities in the Middle East, however, could easily drag the economy the other way. "I think we should appreciate why the uncertainty is so paralyzing to business decisions," says Meyer. "When we think about some of the really negative things that can happen in the intermediate and worst-case scenarios, output is 4.5 percentage points lower next year than it would otherwise be. The unemployment rate two years from now is 2 percentage points higher than it would otherwise be. There's a global recession. So there are a lot of really bad things that can happen out there." --E.S.
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