Insurance agents can point to the recent grounding and subsequent sinking of the cruise ship Sea Diamond in the Greek Isles as a reminder to their clients to practice good risk management by being prepared for the unexpected. More importantly, in planning for disaster, the expected unexpected will not develop as expected.
Reports indicate that despite evacuation procedures and some emergency training, the initial response was slow, communications were poor, and there was considerable confusion. We have no idea whether this is accurate. In any case, assuming the owner was adequately insured for the vessel, now in 500 feet of water (at the bottom, not the top), Louis Cruise Lines’ management should be breathing a sigh of relief that there was not a much worse outcome.
Numerous articles have reported problems with the evacuation (see here and here), including:
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The evacuation took three hours
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The first communication of a problem to passengers did not occur for 45 minutes
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There appeared to be a shortage of life vests
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Some life rafts may not have been functioning
An article in Slate asks why it took so long to evacuate the ship (see here). Maybe luck provided a long time. Major disasters are often the result of a number of unfortunate events (not one) occurring at the same time, and the crew was fortunate they had good weather, close proximity to help, and time. In the end, the crew took the time they had and the evacuation was effective. The article notes a critical point often overlooked in chaotic situations:
Evacuees aren't their normal selves; one study found that 70 percent of passengers are bewildered with impaired reasoning after serious maritime incidents.
While Monday morning quarterbacking is not always helpful, the event provides a number of lessons:
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Preparation is critical – both for mitigation and response
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Events will not develop as expected
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People will not behave as expected
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Develop contingencies for unexpected events
We, in the business of providing financial resources for disasters, should be prepared for disaster. Are we? And are we doing enough to help motivate our clients to prepare?
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