Blame game continues with Italian cruise liner disaster
As the true tragedy of the sinking of the cruise liner Costa Concordia begins to take full shape, the finger-pointing has grown from a whisper to a roar. Perhaps the ship was too close to the coast. Why didn’t the navigational system and sonar find the sand bank/rocks that gashed the ship? Aren’t these ships supposed to have compartmentalized hulls so a tear in one area can simply be mitigated by closing off that part of the belly of the ship? Lifeboat training should, of course, happen in the first few hours at sea. And then there are the various acts and failures to act by the captain and the crew.
Risk management theory teaches that most systems have fail-safes and back-ups such that true tragedies only take place when there are multiple failures. It seems that this has been borne out on the Costa Concordia. But it all seems so preventable. Apparently there are few international regulators for safety in this industry. And much of the risk management oversight falls on the insurance industry. Clearly insurers put a lot at risk for the cruise ship industries. Insured losses can reach the billions of dollars on these megaships. So, where were the insurers? That question should get flushed out in the weeks to come. I hope that the answer is not that effective risk management was lost to lax soft-market underwriting and a hands-off approach to safety for fear of angering a client and losing the underwriting revenue.
About the Author
Phil Edmundson is the Chairman and CEO of William Gallagher Associates (WGA), insurance brokers and consultants for businesses with over 30 years in the insurance industry. He manages strategy, talent acquisition and development, and management / acquisitions at WGA.
617.646.0229 PEdmundson@wgains.com Connect with Phil on LinkedIn