Crisis Management

By Edward A. Schirick, CPCU, CIC, CRM
January 2017

Merriam Webster dictionary defines a crisis as "an unstable or crucial time or state of affairs in which a decisive change is impending; especially: one with the distinct possibility of a highly undesirable outcome <a financial crisis>".

How is Crisis Management Planning Different from Risk Management Planning?

Risk management focuses on the process of identifying risks and evaluating those risks in terms of their potential financial impacts for frequency and severity. The next steps involve selecting from various alternative methods to reduce, avoid, or prevent those risks from causing injury to people, damage to property, or harm to the reputation of the business. In essence, risk management's focus is pre-accident or -event.

Crisis management, on the other hand, is responding to circumstances when events don't go as planned and has a post-accident or -event focus. If it's helpful, think about crisis management as post-accident risk management.

Create a Team

Identify a small group of people, perhaps four or five depending upon the size of your organization, to form the steering committee for your camp's crisis management plan. In addition to the camp director/owner or executive director, the team might include the camp nurse, program director, financial manager, and the head counselor. Legal counsel, public relations manager, insurance broker, or risk manager may be other resources for the committee to access as necessary. If you're a nonprofit or religious organization, you'll need to enlist your board of directors in this process as well.

Review Your Camp's Exposure

Do a vulnerability analysis. This step is similar to risk management's risk identification process. Consider your exposure to crisis situations that may be the result of natural disasters. These events are often referred to as "acts of God" and may include floods, earthquakes, windstorms, tornados, hurricanes, and forest fires.

Other crises may be manmade. Identify the circumstances which may develop into crisis resulting from staff actions or inactions. Examples include drowning, automobile accidents, breach of your computer security compromising customer personal information, sexual abuse and molestation incidents, and fires causing serious damage or destruction to key buildings such as your dining hall.

Determine your camp's crisis exposure stemming from your proximity to other businesses. For example, you would include trains transporting hazardous materials on railroad tracks near camp. Consider other potential crisis situations that might develop from nuclear power plants, dams, and chemical plants in your vicinity.

Make a comprehensive list of the events with potential to become a crisis where your camp is located and where you conduct your programs.

Build Your Emergency Action Plans

Using your list, build your Emergency Action Plans (EAP). EAPs will differ depending upon the type of situation. Your EAP for a fire will differ significantly from your plan to respond to a drowning, or for alleged incidents of abuse or molestation. The good news is some aspects of the plan will be transferrable from one situation to the other. Plus, you've already done some of this work as part of your risk management planning for ACA accreditation, or in response to requirements of local/state licensing authorities.

Identify local and regional resources with whom you might need to speak to learn about their capabilities in a crisis situation. Meet with their representatives to get input on your plans as appropriate. Realize that for a period of time immediately following some incidents you and your staff are on your own until external resources are able to get to you. The top priority is protecting people first; then focus on protecting or preserving property.

Immediate Response

Establish authority and a clear, unambiguous chain of command. Make sure everyone knows who is in charge. Provide a primary and secondary means of communication. Create a crisis command center to coordinate the response. Appoint a team member at the site of the incident or accident to report facts to the command center. The team responding should have practiced sufficiently to ensure their effort is immediate and reflexive. This is a situation where the cliché "practice makes perfect" is apropos.

If someone is injured and is being transported to the hospital, send staff along to be a "friend" and advocate for the injured person, especially if a camper is involved. This person will also be a source of information at the hospital once the injured person has been safely transported off the camp premises or program site.

Be Prepared for the Fallout

Once the immediate threat has passed, gather all of the facts surrounding the incident. Ask the classic questions: who, what, where, how, when? Incident reports may be helpful to provide structure to this process. Be cautious, however, about including questions regarding how the injury or situation might have been prevented. This type of information is a boon to plaintiff attorneys if litigation develops later.

Once you're confident you have all of the facts, determine with whom and how you should communicate. You'll certainly want to communicate with your insurance broker. But beyond that, is this crisis the kind that will require communication with a limited number of campers' parents or all camper families?

Personal phone contact with parents of injured parties is logical, but suppose you need to communicate with all of the camper families to let them know you are evacuating camp ahead of a rapidly moving forest fire? How will you do this? What's most efficient: phone, e-mail, or text? Will you do this with your own staff, or will you rely on a third party to communicate for you? What's your back-up plan if your preferred method of communicating with everyone is not available?

Security is an issue during a crisis. Will you have someone stationed at the front gate to control access to camp, prevent media from simply walking onto the property, and direct external emergency resources?

Who will speak with the media if a news crew shows up at the front gate? What type of formal media training will this spokesperson have received? Will you prepare a formal statement and stick to the facts? It's important to be honest and transparent in your communications. Insurance companies want you to stick to the facts, avoid speculation, and to do nothing that would prejudice their ability to defend your camp. If possible, share a copy of any formal statement with your insurance company and insurance broker prior to releasing the statement to media or camper families.

Public Relations

Do you work with a public relations firm or crisis consultant? You might want to consider engaging these resources. While you and your staff are busy attending to the immediate fallout of the crisis, public relations firms and crisis consultants will be able to monitor social media and offer advice. Ultimately, they may help you minimize the impact of the event on your camp's brand and reputation.

Several insurance companies with specialty insurance programs for camps offer crisis management insurance coverage. The limit of insurance varies from company to company with most offering a $25,000 limit to pay for PR and other crisis expenses. Check with your insurance broker to determine if your insurance program includes this coverage.

Find out from your insurance advisor what triggers this coverage. Understand your insurance company's definition of "crisis," which differs from company to company and conventional understanding of the word. Sometimes more than one person needs to be injured to trigger coverage.

Plan for Recovery: The Role of Insurance

Many small and medium-sized businesses don't have a recovery plan following a crisis. Insurance industry studies indicate that many such businesses never reopen. Don't be among those casualties. Take the time to plan.

Insurance can play a major role in aiding your camp's recovery, especially when there is damage to your facilities resulting in a temporary suspension of your operations. Business income and extra expense insurance is available to reimburse your camp for a loss of net income following a covered cause of loss.

Business income insurance is designed to provide funds to cover expenses that continue contractually to help you stay in business during the time your camp property is being repaired. It can even be extended to cover the difference between income prior to the loss and after the loss if revenue doesn't return immediately to its former level after camp reopens.

Business income insurance is triggered by property perils such as fire and windstorms. It can also be extended to cover other events such as food contamination, communicable disease, or workplace violence. Perils such as floods and earthquakes are typically not included but may be available for an additional cost with your camp specialty insurer or through other insurance organizations.

Buy an adequate limit of liability insurance to protect your assets. Seek the broadest coverage available for your activities, including sexual abuse and molestation risks. Sometimes even the most robust risk management efforts don't prevent an injury. If a camper is injured and you receive a demand from a parent for reimbursement of medical expenses or other consideration, report the demand, the incident, and circumstances immediately to your insurance broker or insurance company.

Report all such claims promptly to your insurance company, including letters of representation from attorneys. Cooperate with your insurance company's claim staff and respond quickly to their requests for information. Early reporting of incidents and accidents often minimizes the impact of the claim.

Understand your responsibilities when a claim is made. Stay engaged with the claims and litigation process to ensure your values and perspective are understood by the insurance company's claims staff. Proactively communicate with any defense attorney assigned by your insurance carrier to get the best outcome possible under your circumstances.

Keep in mind that not all accidents or events are covered by insurance. Be sure to include this possibility in your thought process while planning. Remember, crisis management is post-accident or -event risk management. The best results follow planning, preparation, and engagement. Good luck with your crisis management planning process and continue working hard at risk management so you'll never have to use it. 

Crisis Management — Planning and Response Resources

Edward A. Schirick, CPCU, CIC, CRM, is area senior vice president of RPS Bollinger Sports & Leisure in Monticello, New York, where he specializes in arranging insurance coverage and offering risk management advice for camps. Ed is a chartered property casualty underwriter, a certified insurance counselor, and a certified risk manager. He can be reached at 877.794.3113 or Ed_Schirick@RPSins.com. Visit campinsurancepro.com.