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Risk managers are unprepared for once-in-a-career challenges

News & Insights 6 February 2013

Standard Club to issue guidance on meeting extreme circumstances.

Standard Club to issue guidance on meeting extreme circumstances.
Liz McMahon - Wednesday 6 February 2013

MARINE casualties can confront risk managers with a once-in-a-career challenge — and they often have no relevant experience to help them, said Standard Club North America head LeRoy Lambert, writes Liz McMahon.

Speaking at a Standard Club New York seminar, Mr Lambert said that although well-run companies might have emergency plans in place, it was still easy to underestimate the speed and ferocity of developments and the need to develop strong relationships beforehand.

Mr Lambert said: “When something goes badly wrong — say, a collision or grounding — the first few hours can be critical. It’s when big decisions are taken — for example, about salvage.

“People have to move with amazing speed in situations where there is confusion and conflicting information. That’s when the quality of your planning will make all the difference.”
The executives from member shipping companies based in North America were asked to react to a scenario involving a collision at the entrance to a major harbour.
The Standard Club said one of the key messages to come out was the need to know and develop good working relationships with all the key players before an incident took place.
“Responding to an emergency is about creating a partnership with key people such as lawyers, pollution-control experts, salvors and port authorities. This is so much easier if you already have a good understanding with them and you know exactly who can do what,” said Mr Lambert.

“It is also vital to understand your insurance — what is covered, what is not and where one policy ends and another begins. Preparation really is the key.”
The club has prepared a guidance list for shipping executives to assist them to cope with exceptional circumstances.

“How we handle big casualties is the key to reducing insurance costs, as we all want to do,” said syndicate director David Roberts.

“A small number of events are having a disproportionate impact on claims levels and, in these situations, the partnership between shipowner and P&I club is vital.”

The Standard Club was the lead P&I insurer for Costa Concordia , along with Steamship Mutual.

This article is taken from Lloyd's List, It is the copyright of Informa UK Limited and is reproduced with permission. Further reproduction, retrieval, copying or transmission of this article is not permitted without the publisher's prior consent.

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