A disaster is a fortuitous event or series of events that can cause any form of damage to the public, employees, or the firm. These events can include perils such as fire or windstorm, damages that result in pollution, product recalls that damage the firm’s public image, or a sudden increase in the danger of working conditions such as the collapse of a mine shaft.Risk managers develop a plan of action for each reasonably possible disaster. The plan maps out, in advance, the firm’s response to the emergency and the methods to be employed to minimize the damage. Often, for large enterprises, disaster plans are required by the insurance company covering the risk.For example, suppose Get Well, a drug manufacturer, has product liability with Acme Insurance Company. Acme may require a disaster plan for a product recall. The purpose of the disaster plan is to determine the manner in which the product will be recalled, how it will be financed, and how any damage done by the product will be addressed in order to minimize the loss.