Yesterday, I posted about climate change insurance. Someone sent me an e-mail suggesting that I had gotten the idea of the post from a Thomas L. Friedman (as in three-time Pulitzer Prize winning author for the NYT, Thomas L. Friedman) December 8, 2009 op-ed post. In that piece, Mr. Friedman writes about climate change:

"When I see a problem that has even a 1 percent probability of occurring and is "irreversible" and potentially "catastrophic," I buy insurance. That is what taking climate change seriously is all about."

Nope, I had not seen this brilliant piece. But, I certainly agree with it.

Climate change and global warming. Topics that can ignite debate among educated scientists as well as politicians and those who elect them. Stephen Schnieder, a climate scientist, writing for The Huffington Post, summarized the global warming debate quite well:

"The past 40 years, when attached at the end of a reconstruction of the temperatures of the past 1000 years, look like a bit like a "hockey stick" with a wavy handle but a "blade" that rises above the climatic history of the millennium and exhibits the warmest decades in the record in the past 30 or so years. This reconstruction has been the object of intense arguments between the climatologists who constructed the hockey stick and some skeptical attackers who claimed it was erroneous."

What do we do when we have a remote risk with catastrophic consequences if the risk occurs? Sure, your restaurant is unlikely to catch fire and burn to the ground; but, if it does? Smart business people insure against the risk.

With world leaders arriving in Copenhagen this week to discuss climate change, I found myself thinking about climate change the same way I view any business risk: can steps be taken to reduce the risk and, if the worst happens, can the business recover?

Fareed Zakaria, writer and political analyst for CNN, proposed similar thoughts in a recent commentary. Mr. Zakaria points out that an estimated 5% of global GDP was used to address the world "financial crisis," why not use a percentage of world GDP as an insurance "premium" against future climate catastrophe? He points out that most of the investment of the "premiums" would go into areas that would benefit the economy and reduce dependence on unsustainable energy.

Climate change debate today is much like the consumer-product safety debate over the past fifty years. The Insurance Institute for Highway Safety is fifty years old this year. Insurers took up auto safety in an organized fashion to reduce risk. By reducing risk across an industry, insurers saved lives and reduced claims--in short, they saved money. Today insurers are realizing that prevention, education, and enforcement of green initiatives is a way to reduce the catastrophic risk--and associated potential claims--of global climate change.

Ultimately, it may be the global marketplace, led by insurers, that accomplishes sustainable and realistic goals in this environmental debate before the world leaders and scientists in Copenhagen can come to any consensus on what those goals would be.

As the second Friday of December passes us by and we head off for the weekend (dome of us anyways), keep in mind there are only twenty days left until the end of the year.

End of the year is the perfect time to review your company's business insurance. It is a good time to make sure that equipment purchased during the year is insured. It is a good time to make sure that automobiles and their drivers are properly identified. Update procedure manuals, review wellness plans, meet with your insurance professional--these and other steps are perfectly suited for the end of the year because the steps coincide with tax planning.

I have a post where I suggest a ten-step annual review. End of year is a good time for such a review.

Zurich in North America has created an electronic library of risk management and product information. Zurich calls it: the Zurich Virtual Literature Rack (VLR).

The VLR contains information relevant to risk managers, customers, and those looking to purchase business insurance. The VLR requires registration and the information requested is a bit invasive, but that is probably my only complaint. I have always liked RiskInsight, a publication produced by Zurich that covers different types of risks in each issue. That publication is available in the VLR for direct viewing or downloading.

Other publications and white papers are also available at the VLR. I like the fact that, by making these publications available electronically, the company is avoiding the high cost of brochures while acting in an environmentally-friendly manner.

Well worth the look if you are an insurance professional or business looking for information on insurance or risk management.