Last month’s magnitude 7.1 earthquake in Mexico City has left several companies and local businesses in the rubble, both physically and financially.
Mexico City Mayor Miguel Angel Mancera said that about 360 buildings would either be demolished or given major structural reinforcement. An additional 1,136 are reparable, and 8,030 buildings inspected are habitable so far.
One local restaurant known as the Guapa Papa were one of the casualties of the earthquake. Manager of Guapa Papa, Antonio Luna said “This is a bust. It’s already closed due to structural damage to the building.”
“In the end, the company let everyone go because it couldn’t continue having expenses,” Luna added.
Alfredo Coutino, Latin America director for Moody’s Analytics, said they were still collecting data on losses. A preliminary estimate was that the earthquake could knock between 0.1 percent and 0.3 percent off Mexico’s gross domestic product in the third and fourth quarters.
International and global transportation systems and businesses are interdependent. In other words, one domino of the market can crash down the others.
At the same time, disruptions that began locally in Mexico could lead to disruptions and delays worldwide, including airlines, shipping companies, rail operators, and trucking companies.
In turn, these damaging effects will likely 0have the short-term impact of increasing manufacturing, supply and distribution costs for products that utilize international and global distribution routes. It may also impact longer-term profits as well.
Although the full impact of the earthquake to the region will not be known for months or even years to come, it is worth a reminder that any businesses should take preventative measures, and identify potential insurance coverage options in order to mitigate any resulting economic losses.
Business insurance is especially important to have in order for the full benefits that can be found in three particular areas: Property Coverage, General Liability Coverage, and Business Income Coverage.
Property Coverage helps replace company property, such as your office building if something like a fire, earthquake, or hailstorm causes damage to it, while Business Income Coverage gives you payroll expenses and lost income when your business, for special reasons, is temporarily out of service.
Finally, General Liability Coverage helps pay the medical expenses or legal bills for someone who gets injured by the result of your employee’s negligence.