Archive - Jul 5, 2012
Liability, Reputation Risk and Moral Hazards at the Beach
Yesterday, I headed over to the Country Club of Woodbridge to swim some laps and get a little rest and relaxation with my family. It was packed there. When we arrived, we could only find one seat beside the pool which wasn’t taken. I swam my laps, splitting the lap lane with a friend who also does many laps in the pool. I noticed lifeguards sitting in locations where they hadn’t been in previous years. There must have been half a dozen lifeguards on duty.
Things have sure changed a lot since my family and I joined the club shortly after the town took it over when the previous club went bankrupt. In those days when I swam laps, I was the only person in the pool being watched by the only lifeguard on duty. While I don’t have specific data, it appears as if the town took a risk in taking over the club and that risk finally started paying off as more people use the facility and the community becomes an even more desirable place to live.
Our lives are made up of risks. Every day we take risks based on calculations about possible outcomes. We might consider various liabilities our actions might produce. We might consider reputational risk, especially if our name is tied to some organization. We may encounter moral hazards when we take risks without considering the larger impact of our actions.
All of this came to mind recently, as I read stories about Tomas Lopez, a lifeguard for Jeff Ellis & Associates in Florida who was fired for aiding in the rescue of a person outside of the area he was supposed to be watching. A company supervisor was quoted on CNN as saying "We have liability issues and can't go out of the protected area," The Jeff Ellis website talks about ‘Aquatic Risk Management”, and friends who have worked as lifeguards for Jeff Ellis here in Connecticut have commented about how they are all about the liability.
Yet this focus on the bottom line instead of the good of the community provides a useful illustration of reputation risk. It will be interesting to see if municipalities that contract with Jeff Ellis & Associates to provide life guard services will rethink their contracts.
Back at the Country Club of Woodbridge, we’ve got some great lifeguards, a great pool director, and all of this is in the context of an effort that goes beyond a short sighted view of the bottom line to a longer term view of the greater good. I hope to get a few more laps in real soon.
Note: A statement on the Jeff Ellis & Associates website says:
It has been incorrectly reported that Jeff Ellis & Associates was involved with the firing
of a Lifeguard in South Florida.
Jeff Ellis & Associates is an Aquatic Safety & Risk Management Consulting firm. Jeff
Ellis & Associates does not own, operate or manage aquatic facilities.
Jeff Ellis & Associates does not have a contract with the City of Hallandale Beach. Jeff
Ellis Management is a separate company that provides facility management services and
does provide service to Hallandale Beach.
The logo on the Jeff Ellis Management website includes the text "Jeff Ellis & Associates". This looks like hair splitting spin by someone to trying to mitigate against the damage done to the Jeff Ellis empire.