My glass of water is usually half full.
It’s my nature to be optimistic. For better or for worse, my glass is usually half full. I’m usually the person on an even keel, making others around me laugh and “lighten up.” However, I’ve found that there are times when being overly optimistic can be downright perilous…particularly if you’re the risk manager or owner of a business that has just suffered a loss.
Let me set the scene: It’s 11:30 pm. As camera crews set up, a factory burns in the background and firemen drag hoses, shouting to one another. Snap! Camera lights expose the chaos of flames and water, and a news reporter shoves the microphone in front of a tousled, unshaven business manager. The manager tells the reporter, “It really looks much worse than it is. We’ll be able to fulfill all orders through our related companies and we will be back up to full production within two weeks.” (Smiles confidently.) The reporter says, “Back to you in the studios.”
Now cut to me in my living room, watching the same news cast in my jammies, and you will witness a crazy person, shouting “Nooooooooooo!” at the TV screen. Why, in this case, should a risk manager or owner be less-than-optimistic when talking to reporters?
Because the next morning someone from the factory will call the insurance company. When an adjuster is assigned the file, he will watch the same news clip on the internet–and save a copy of it to his computer. Then, three months later, when the company has lost sales and is still not fully back into production, the adjuster will want to know why the business didn’t get back to production within two weeks, as the manager so confidently told a reporter during the interview.
Hey, I didn’t just tell you a far-fetched bedtime story. I’ve seen different versions of this situation play out many times. It’s not always television: it could be newspapers, trade journals, or even just early conversations with insurance company representatives. Here’s the take away: when it comes to submitting a business interruption insurance claim, overly optimistic statements can come back and bite a business in the rear.
The best course of action, following an event like this, is to talk like a professional athlete. Talk for 30-45 seconds, but don’t actually say anything. Say something like, “This is a very unfortunate event and we’re not exactly sure of the extent of the operational impacts at this point. We have a team of dedicated experts on our staff that will do everything in their power to ensure that we recover from this incident and continue to be leaders in our market. Thank you.”
When speaking with the insurance company, clearly state what you plan to do to aid in your own recovery, but be guarded in your estimates of how effective any of your efforts may, or may not, be. Tell the insurance company you can guarantee efforts, but not results.
So…have you ever been burned because you were overly optimistic? I’d love to hear from you–leave a comment below.
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