Encouraging Ethical Behavior - Is Process Insurance Enough?

The maintenance, operations, and safety managers of a large chemical company met with the plant manager to discuss safety features that should be design int other construction of a new process unit for th manufacture of a highly volatile new chemical product. It would be a significant addition to the plant and employ 4 people per shift.

The safety features under consideration covered all aspects of risk. In total, thy would be extremely expensive to install and maintain. The group deliberated a long time over the probabilities of an explosion or fire. They finally agreed that all of the safety devices recommended would prevent the possible hazards, but they were very concerned about the cost.

Finally, one member of the group said, "Look, it's just not cost-effective to spend the money. What do we have to lose? Our insurance will fully reimburse us for product loss if the unit malfunctions and blow up. It is such a remote possibility that it doesn't make sense to spend the money."

How would you have responded if you had been a member of this group?