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The 2011 Tōhoku-oki earthquake caused in excess of $200 billion in economic damages. For comparison, a single earthquake in California could cause over $600 billion in economic damages. Insurance coverage of risk has not kept up with the increasing concentration of economic assets in natural-catastrophe-prone areas, leaving a void in coverage and the potential for extended disruption and delayed economic recovery. Business interruption risks from both the Tōhoku-oki earthquake (Japan) and the Bangkok, Thailand floods of 2011 clearly demonstrate the linkage of regional events to the global economy and the systemic importance of ensuring rapid recovery.
A magnitude (M) 7.3 earthquake on the Puente Hills Fault underneath Los Angeles (LA), California is used as the basis of a case-study to examine a modeled view of the losses occurring from a large event. We identify and quantify economic impacts deriving from such an event that will impact a sector of the economy not traditionally discussed in this context. Recognition followed by quantification are key steps in mitigating long term negative impacts from earthquakes.