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Lessons
to be learnt from the oil industry
In the last week of March news flashed
around the world of a catastrophic explosion in a Texas oil
refinery owned by industry giant BP. Fifteen workers lost
their lives and it is reported that over seventy more were
injured, many seriously. Clearly this was a major incident
for a public company with a worldwide reputation.
What lessons can be learned here by
companies involved in travel and tourism? In
docleaf®’s
view, plenty.
Firstly, chief executive Lord Browne of
Madingley immediately flew to Texas to see matters for
himself and to face the media. This demonstrated
unequivocally how important it was that the company should
be seen to be showing top-level care and concern. Meanwhile
the company’s PR bosses had swung into action, issuing a
press release in the form of a personal, caring, statement
from the refinery’s manager, who was named. The release was
also instantly available worldwide via the BP website.
By taking the initiative in this way,
even when all the facts were not entirely clear, the company
showed a caring image in the face of what could have been
difficult and embarrassing circumstances. Such openness
also meant that no one in the media could make allegations
of, or even imply, incompetence, corporate mismanagement or
a cover-up.
As it happens, the disaster could still
have extremely serious repercussions for the company. BP
took a conscious decision some ten years ago to discontinue
insurance cover for major catastrophes, believing that they
were strong enough to absorb the risk. Now the bill for
repairs to the refinery, workers’ compensation issues and
potential litigation could, in the view of some analysts,
exceed £500 million. This could prove to be a heavy burden
on the company’s balance sheet, demonstrating once again the
value of consistent and professional risk assessment and
comprehensive insurance.
As we at
docleaf®
believe this incident to have
valuable lessons for us all, we have provided links to the
news item in the
Daily
Telegraph’s Business section of 26 March here and
to
BP’s initial press release of 24 March here, in our view
an excellent example of a well-written and timely company
statement in the aftermath of disaster.
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Second Major
Indian Ocean Earthquake
As a dreadful follow-up to the Boxing
Day tsunami that featured in our January e-Newsletter, at
the end of March southeast Asia suffered yet another major
off-shore earthquake. Although it appears on this occasion
not to have caused a major disturbance of the sea,
catastrophic damage has been caused to much of Sumatra and
neighbouring islands and many lives have been lost.
This time it appears that tourist
destinations are largely unaffected, but once again it
demonstrates that natural disasters cannot always be
foreseen and can strike at any time. Any company involved
in travel and tourism should definitely have contingency
plans in place to cope with such a calamity. Has your
company reviewed policy and training procedures as a result
of recent events?
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Up in
smoke
- A
US lawyer gets a taste of his
own medicine
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A Charlotte, NC lawyer purchased a box of
very rare and expensive
cigars, then insured them against fire, among other
things. Within a
month, having smoked his entire stockpile of these great
cigars and
without yet having made even his first premium payment
on the policy,
the lawyer filed claim against the insurance company.
In his claim, the lawyer stated the
cigars were "lost in a series of
small fires." The insurance company refused to
pay, citing the obvious reason that the man had consumed
the cigars in the normal fashion.
The lawyer sued and won! In delivering
the ruling, the judge agreed with the insurance company
that the claim was frivolous. The judge stated
nevertheless that the lawyer "held a policy from the
company in which it had warranted that the cigars were
insurable and also guaranteed that it would insure them
against fire, without defining what is considered to be
unacceptable fire" and was obligated to pay the claim.
Rather than endure lengthy and costly appeal process,
the insurance company accepted the ruling and paid
$15,000 to the lawyer for his loss of the rare cigars
lost in the "fires."
After the lawyer cashed the check, the
insurance company had him
arrested on 24 counts of arson! With his own insurance
claim and
testimony from previous case being used against him, the
lawyer was convicted of intentionally burning his
insured property and was
sentenced to 24 months in jail and a $24,000 fine.
I have it on good faith that this is a
true story and was the First Place winner in the recent
Criminal Lawyers Award Contest.
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Don’t call your lawyer! For help in all crisis management and
risk assessment matters, why not call
docleaf®
now on 01923 681224 or visit us at
www.docleaf.com.
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