August 27, 2018
By: Tim Ogilvie, Senior Vice President, JLL
Two recent, but very different, reports remind us of the special risks faced by businesses operating here in the Bay Area.
A report from the Union of Concerned Scientists suggests that climate-driven rise in sea level could put more than 20,000 homes in California underwater by 2045. Marin County leads the state (4,377) but Santa Clara, San Mateo and Alameda counties also have large numbers of homes at risk.
In more depth the US Geological Survey’s recent Haywired Study looks at the potential impact of a 7.0 quake along the Hayward Fault.
The Bay Area is vulnerable
The reality is we live and work in a very active tectonic region. According to earthquaketrack.com, the Bay Area experienced 39 earthquakes (over magnitude 1.5) in the 30 days between June 19 and July 19, 2018. Most were too small or too far below the surface to be felt. Our strongest this year was a 4.4 near Berkeley.
“…the Bay Area experienced 39 earthquakes (over magnitude 1.5) in the 30 days between June 19 and July 19, 2018.”
In October it will be exactly 150 years since the Bay Area witnessed a near 7.0 earthquake on the Hayward Fault. Experts at USGS don’t know when we’ll see another, but they consider one due anytime. They also believe that even though the more famous San Andreas Fault produced a 7.9 quake in December 1906, a quake today on the Hayward could cause more damage than a comparable quake on the San Andreas. Here’s an idea of the potential impact.
The cost of being ‘out of business’
Just one year ago, PG&E equipment failure and power lines prompted a series of wildfires in Northern California’s Wine Country causing more than $9 billion in insured losses to homes and businesses and killing 44 people. Potential losses from a 7.0 earthquake in the Bay Area could be ten times that figure and the human cost far greater. In the 1906 earthquake, 80 percent of the city of San Francisco was destroyed.
Have a Plan B
Just having an awareness of the potential for disasters goes a long way toward mitigating potential damage and disruption, but businesses really should have plans for disaster recovery and business continuity. Ask the tough questions so that you create a system of survival.
- How much downtime can your business tolerate?
- Does your business have a back up location (or locations) if your main facility is damaged or destroyed? What about back up personnel, in the case of fatalities?
- Where should back up locations be, assuming a major quake will impact the entire Bay Area?
- If transit systems are offline for prolonged periods, as happened in San Francisco’s 1989 quake, do you have a plan for employees to get to work?
- Does your communication plan effectively convey this information to employees, vendors and customers so they know what to expect in the event your business is disrupted?
No business can hope to fully avoid disruption in a massive disaster event such as a major quake, but simply going through the exercise of pre-planning can mitigate some risks and, hopefully, minimize business disruption.
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