Before April 20, few people knew who Dr. Anthony Hayward was or the company that was in his charge. Since then, though, the CEO of British Petroleum (BP) has been in the news defending the efforts of his company to stop an oil "leak" that, if worst-case scenarios become reality, could end up pumping the equivalent of 60,000 barrels of crude oil a day into the Gulf of Mexico.
It's an unenviable position that many claim executives in the insurance industry know all too well. Responding to a disaster requires an attunement to both fact and emotional sensibilities. It also requires preparation and experience in crisis management to avoid early missteps that can push public opinion irrevocably into pitchfork-and-torch territory.
Unfortunately for Dr. Hayward, some of his initial comments appear to come off as slick as the oil plumes and tar balls that have appeared to escape into the Atlantic Ocean via a loop current, threatening the Florida and East Coasts. As an example, here is an excerpt from Dr. Hayward's May 3rd interview with National Public Radio's Steve Inskeep on the program Morning Edition:
Hayward: We will absolutely be paying for the clean-up operation. There is no doubt about that. That's our responsibility. We accept it fully.
Inskeep: Meaning, even damage that it is caused along the coastline, damages to people's livelihoods—you will take responsibility for that?
Hayward: We have made it clear that where legitimate claims are made, we will be good for them.
Inskeep: One reason I ask about this specifically is because your company reportedly spent time in recent days trying to get Alabama residents to give up their right to sue in exchange for $5,000. Did you do that?
Hayward: No, that was an early misstep in the … it was a standard contract that the teams were using. That was eliminated very early in the process.
Dr. Hayward is walking a fine line here, one that is especially worth noting in the pages of this month's issue because June is the official start of the 2010 tropical storm season. Certainly the phrase "pay all legitimate claims," is a qualifier that, by itself, is perfectly fine. Furthermore, it takes courage to step up and take responsibility for cleaning up such an enormous and complicated disaster, something the company has done so readily and publicly. Dr. Hayward has made himself the face of this disaster, which, in a way, is refreshing in our society of blame-shifting behavior.
However, Dr. Hayward makes his stumbles. The phrase "pay all legitimate claims" is repeated in other interviews and even a congressional hearing to the point of exhaustion. The statement is almost always printed with quote marks, which implies a certain amount of patronization. The final straw was when the British newspaper The Times reported that, when asked for examples of illegitimate claims, Dr. Hayward said, "I could give you lots of examples. This is America — come on. We're going to have lots of illegitimate claims. We all know that."
Furthermore, Dr. Hayward is later forced to explain a waiver that fisherman were asked to sign when gearing up for containment and clean-up efforts, which purportedly offered $5,000 in exchange for not suing the company at a later date. BP subsequently had the language removed from the forms and said that the company never intended to apply the waiver clauses.
That's a clarification no insurance company ever wants to explain, for a variety of obvious ethical and perception reasons. When the public and government is looking to place blame—something that occurs after nearly every disaster, man-made or natural—insurance claim professionals would do well to remember that anticipating disaster and preparing for response are two recipes that don't call for slick talk.
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