Key Recovery and Risk Mitigation Steps After the Tianjin Port Explosion
The explosions on August 12, 2015, that devastated a warehouse storing hazardous materials in Tianjin, China caused extensive damage to nearby industrial, commercial, and residential areas up to two miles away. Hundreds of people were seriously injured and more than 100 died. While the incident is under investigation, concerns about widespread chemical contamination, physical damage, and environmental impacts remain.
Immediate Damage Assessment Steps
The infrastructure, shipping-container, stored-vehicle, building, and other damages resulting from the explosion raise complicated insurance claims, recovery, and risk mitigation issues for affected first and third parties.
For example, companies that rely on the port directly or through suppliers, may face marine and non-marine property, time-element, death and personal injury, transportation services, cargo, environmental, business interruption, supply chain disruption, regulatory, and other exposures.
Given the extent of the damage and business interruption, taking the following recovery actions early on can help you mitigate impacts on your company’s finances, operations, and overall success:
- Review the terms and conditions of your insurance policies to determine which coverages may apply.
- Document all related financial losses to support any claims to be made under applicable policies.
- Enlist local resources with global connections to help with language, regulations, procedures, customs, property-access issues, and home-office communications.
- Use external claims management and advocacy resources, as needed, to help you manage complex insurance claims.
- Assess short- and long-term supply chain and supplier impacts, especially where seasonal and perishable goods are concerned, and consider alternative sourcing, storage, distribution, and transportation.
Strategic Risk Management Actions
You also should look beyond the immediate incident and consider if you need to re-evaluate your hazardous substances storage and trade disruption risk management strategies, including:
- Assess your hazardous substances storage risks and regulatory compliance obligations, and update your protection, mitigation, emergency response, and training plans and activities accordingly.
- Revisit your business impact analysis (BIA), particularly the risk assessment of critical activities and resources.
- Use data and analytics and active monitoring to improve your supply chain visibility and business continuity and resiliency strategies.
- Assess your contingency plans and those of your suppliers and other businesses impacting your supply chain.
- Review your own and suppliers’ contractual obligations relating to the delivery of goods and services in the wake of an extraordinary event or circumstance beyond your control.
Whether directly or indirectly impacted by the Tianjin port explosion, these simple steps can help you maximize your recovery and minimize current and future business continuity, supply chain, and property risks.