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Lessons From Titanic

April 10, 2012

100 years ago the “unsinkable” Titanic went down and 1,500 people perished in the freezing waters. There have been a dozen movies, numerous television shows and without a doubt Titanic is a perfect illustration of a “Cascade Effect” — an unforeseen chain of events due to an act affecting a system. While hitting the iceberg set off the chain of events, consider what might have happened if the ship turned faster? If the watertight doors were higher? Or, what if there were more lifeboats?

The size and scope of a cascading event are not limited to titanic enterprises, after all think about the consequences a $100,000 loss would have on a small business. So the question now becomes, how to prevent a cascade event. The answer is simple, loss prevention and loss mitigation.

Identify Loss Potential – Every business, regardless of type, has the potential for significant loss. As an example, a welding burn in a machine shop is just as serious as a burn from a restaurant deep fryer. Inspection checklists are a good first step.

Ask for Assistance – Most insurance companies, whether they are workers’ comp or property, have dedicated risk management departments. The carrier can provide inspection guides, training materials, or in some cases a full risk management survey.

Follow Up – You might find trends you don’t like or hazards that cost too much to fix. The builders of Titanic could have doubled the lifeboat capacity but the owners thought extra boats ruined the ship’s look.

Be Prepared – Prepare for the unexpected by having a business disaster plan, backup documents, off-site storage or life boats if necessary.

Mitigate Loss – For a retail business this could be as simple emptying the cash drawer or making sure floors are free of slip and fall hazards. Ask sub-contractors for certificates of insurance and hold harmless agreements. The list is endless but when in doubt, see step 2 — ask for assistance.

Scientists are still developing what-if scenarios for the Titanic disaster. But it is clear that the human costs could have been mitigated. So on this centennial week of the most famous ocean disaster, we wish you smooth sailing. Subscribing to Avanti Services via RSS or following us on Facebook and Twitter.

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