Writtten by Brenna Lemieux - check her out at Google+ or TwitterWhen the Carnival Cruise ship Triumph broke down at sea earlier this month, more than 4,000 passengers were stranded aboard. During the five-day incident, supplies dwindled, leaving passengers with insufficient access to fresh water, food, and latrine facilities. Luckily, the ship eventually docked safely in Mobile, Alabama. And now that the ordeal is over, small-business owners can learn a lot from it about managing risk.Business Liability Insurance as Disaster PreparednessThe New York Times reports that some passengers have already filed lawsuits against Carnival, and many analysts expect more suits in the future. That means potentially astronomical expenses for Carnival. To help your business manage a similarly disastrous incident, consider...Adequate business liability insurance. Incidents like the Triumph's disaster are classic examples of how business liability insurance can protect a business. Lawsuits alleging that passengers suffered injuries (physical or mental) from the conditions onboard will likely be financed by Carnival's liability coverage.Contracts with clearly set lawsuit limits. It seems that part of Carnival's standard ticket language is a limit on how much passengers can seek in lawsuits. Ask your attorney how you can minimize the risks your business faces by including certain language in your client contracts.Regular coverage reviews with your insurance agent. The Triumph disaster started with a fire in the engine room. If you haven't recently taken stock of the various factors that could cost your business money, time, and customers (outdated equipment, potential delays in your supplier chain, chain reactions that could result from a snafus in various parts of your business), now is a good time to review your business liability insurance and what it covers. Your insurance agent can help you conduct a review of your business operations and, if necessary, update your policies to accommodate any changes.Liability Insurance for the Second Disaster: Damage ControlPerhaps the most important lesson for small businesses, though, is what happens after a disaster like the Triumph's. In the weeks and months following a problematic incident, small-business owners must work overtime to control the intangible damages as well as those that show up on an insurance claim. These include...Customer relationship management. After any incident, reaching out to customers who were negatively affected is a key part of keeping your business strong. Most reasonable people understand that accidents happen, and are willing to forgive and forget - as long as their pain or suffering is acknowledged.Reputation rebuilding. A public relations campaign may be in order to restore your business's reputation in the public eye. It's often wise to acknowledge your mistake and inform the public about your efforts to correct the problems.Equipment updates or repairs (if relevant). If, as with the Triumph, faulty equipment or gear was to blame for your incident, replacing or repairing that equipment is essential. And you probably want to publicize those efforts.
