Risk Management Issue About Costa Concordia Cruise Ship

In terms of the Costa Concordia Cruise Ship, explain…

Property loss exposure:

Property loss exposure is a kind of condition that risk possibility arise in which a person or organization will suffer from a loss, which result from the damage of property.

The company that owns Costa Concordia Cruise Ship sustains both tangible property and intangible property loss. The tangible property the company losses is its ship and the intangible property it losses is its goodwill.

Net Income loss exposure:

Net income loss exposure is “a condition that presents the possibility of loss caused by a reduction in net income.” (Page 2.6, Risk Assessment)

In Costa Concordia Cruise Ship case, the company’s net income is reduced because the event may increase its costs and decrease its potential revenue. For example, the company may need to pay compensation to its customers, and its insurance fee may arise in the following year. However, owning to the accident, fewer people may choose the company’s ship to be their travelling vehicle.

Liability loss exposure:

A liability loss exposure is “a condition that presents the possibility that a person or an organization will sustain a loss resulting from a claim alleging a person’s or an organizations legal responsibility for injury or damage suffered by another party.” (Page 2.5, Risk Assessment).

In Costa Concordia Cruise Ship case, customers or the families of the customers who died in the event may lawsuit the company; moreover, other parties may lawsuit the company for having breached a legal duty as well.

Tangible property:

Tangible property is a kind of property that has a physical form and therefore can be touched and seen.

In Costa Concordia Cruise Ship case, the tangible property belongs to personal property and the tangible properties are, for example, the ship, the equipment on the ship…etc..

Intangible property:

Country to tangible property, intangible property is the property that cannot be seen or touched....