Risk Management Bulletin

As a business owner, you’re ultimately responsible for the safety and health of all employees – including those who work alone, either off site (traveling salespeople, telecommuters, etc.) or around your facility (such as security guards and night maintenance staff).

To help determine if these lone workers are safe, ask yourself:

1. Does the workplace present a special risk?
2. Is there a safe way in and out?
3. Can one person handle temporary access equipment (such as portable ladders)?
4. Are there potentially dangerous chemicals or hazardous substances involved?
5. Does the job involve lifting objects too large for one person?
6. Is more than one person needed to operate equipment or workplace transport safely?
7. Is there a risk of violence?
8. Are young, pregnant, or disabled employees at risk if they work alone?
9. If the worker’s first language isn’t English, are there arrangements for clear communication, especially in emergencies?
10. Is the worker medically fit to work alone?

Once these questions are answered, you can reduce the risk to your solo workers by:

• Establishing a check-in procedure
• Recognizing that some high-risk activities can’t be performed alone and providing a buddy system for these situations
• Having the worker meet clients in a safe location if there’s a risk of violence
• Instructing distant employees not to enter any place or situation that feels unsafe
• Making site visits whenever possible
• Staying in touch with the employee by phone, text, e-mail, webcam, or radio.

For more information, please free to get in touch with us at any time.

Smaller companies tend to be more vulnerable than Fortune 500 corporations to theft by employees.

According to John Warren, general counsel for the U.S. Association of Certified Fraud Examiners (USACFA), losses from internal theft are disproportionately high among small businesses. A nationwide USACFA review of more than 1,100 fraud cases found that the median loss in organizations with fewer than 100 employees came to $190,000 – more than half again as much as the $120,000 loss among companies with 1,000 to 9,999 employees.

Check tampering was the most common scam uncovered by the survey, followed by skimming (the theft of unrecorded sales), faked billing, and phony expense reimbursements.

One reason why small companies take a bigger hit is because employee theft is often hard to detect and can last over several years. Most perpetrators aren’t hardened criminals, but rather longtime, trusted workers who have risen through the ranks. “It’s startling how many times people will say, ‘I’ve known this person for 10 years, they babysat my kids,’ ” says the USACFA’s Warren, ” ‘Out of all of my employees, I would have never guessed this.’ ”

Embezzlement usually starts small and then escalates, often triggered by money problems facing the worker. Says one expert, “Any time you have an employee who has financial difficulties, you have the makings of a problem.”

their vulnerability, many small businesses don’t take basic steps to deter employee theft. “There’s a reluctance to think about this, compared to larger companies,” notes Rich Simitian, Southern California managing partner for accounting firm Grant Thornton. “The attitude is, ‘I’ve got too many other things to think about as a business owner.’ ”

We’d be happy to recommend precautions that can help you deter fraud internal fraud.

You want your disaster plan, also known as a “business continuity” plan, to be complete, accurate, functional, up to date, and able to meet your recovery objectives. To ensure that you meet these goals, there’s no better way than a “live test.”

You can create buy-in among managers and staff by providing a test scenario that’s specific, realistic, detailed, and comprehensive.

Consider this real-world example: A television communication company in Miami was completing its disaster plan when it learned that a powerful hurricane was headed straight toward Southeastern Florida. Fortunately, because the business had several days’ warning, it was able to implement the plan rapidly and communicate it to employees. Although the company was prepared for the worst, the storm struck to the south and west, near Key West.

Although there was no significant damage in the Miami area, the exercise tested important components of the plan, such as the ability of the business to:

• protect equipment and strengthen the building in a timely and orderly manner
• activate and maintain an alternate transmission site
• test backup electrical generation and other equipment under adverse weather conditions
• communicate emergency technical instructions to affiliate stations throughout the Spanish and Portuguese speaking world
• sponsor a shelter for emergency storm personnel
• release and recall staff in an orderly basis

A post-disaster meeting led to a number of refinements in the plan. Most important, the exercise confirmed the ability of the company to maintain important business activities at a pre-established acceptable level, with minimal impact to its customers and revenue stream.

If you’d like advice on testing your company’s business continuity plan before disaster strikes, just give us a call.

As your business grows, the risks you face become more complex, potential losses grow, along with your insurance premiums. At some point, you’ll need to decide whether it makes sense to turn over the responsibility for risk management to a full-time professional.

Before making this decision, experts recommend that you weigh two key factors: 1) the cost of paying a full-time risk manager, and 2) the potential savings that this manager can generate.

The first element is relatively easy to determine, it’s the salary and overhead of the manager, plus whatever clerical support that he or she needs.

The second item requires you to analyze the extent which a full-time risk manager can:

• Centralize and compartmentalize responsibility for risk management in a single department. This improvement in efficiency should more than offset the increase in administrative costs.
• reduce losses by providing analysis of loss control needs, careful scrutiny of reports, and knowledge of whom to contact for specialized help. Careful attention to loss reserves and adjusting practices can help cut costs dramatically. For example, adjusting liability and workers compensation claims requires special expertise. Insurance companies generally provide adjusters, it’s always helpful to have someone on your team who can evaluate their conclusions.
• help lower your premiums by paying closer attention to coverage criteria, negotiating with agents, brokers, and insurance companies, and using familiarity with industry terminology.

If you’d like our input on making this key decision, feel free to get in touch with the risk management professionals at our agency at any time. We’re here to serve you.

That’s how much the federal government estimates that drug and alcohol abuse costs American businesses. Nearly three in four adult abusers are employed, some of them perhaps by you! You might know these people by their absenteeism rate: they’re off the job at 2.5 times the rate of the average employee. There is no federal drug-free workplace law for private employees, however some states have implemented their own statutes. There is the voluntary approach as well, you can reduce workers comp premiums for businesses that ban drugs on the job.

A drug-free workplace program should follow these guidelines:

1. Set a strict ban on abuse of alcohol and use of illegal drugs. Outline how you will reinforce the policy and the consequences for violating it.
2. Develop a testing program. Decide whom to test, when to test (e.g. pre-employment, random, regular, reasonable suspicion, or incident-related), who will do the testing (preferably a certified independent lab), and what will happen after a positive finding.
3. Decide what to with violators. Some businesses discipline or terminate drug abusers. Others, who see these workers as worth rehabilitating, set up employee assistance programs (EAPs) to deal with drug and alcohol issues off site.
4. Define the role of supervisors. Because line managers will probably be the first to notice the signs of abuse, educate them on what to look for, how to document what they witness and how to properly deal with the situation. However, they should not diagnose what are essentially medical issues, or counsel abusers.
5. Communicate with employees. Make sure they know the details of your program, the effects of abuse, and the importance of understanding the problem and dealing with it.

We’d be happy to advise you on creating and implementing a comprehensive workplace substance abuse plan.

Demographic changes in today’s workplace are impacting the way risk managers handle lost Productivity, the cost of wage replacement, and skyrocketing workers comp premiums that are created by the health problems their employees face. Chronic medical conditions such as heart disease, arthritis, back problems, respiratory disease, and diabetes are far more prevalent among workers aged 55 and above. These workers account for an ever-greater share of the labor force, than among younger employees.

Employers who promote healthy life style choices offer an effective way to reduce health related costs. Experts recommend taking these steps:

• Encourage workers to educate themselves about their health problems.
• Offer health risk appraisals to employees.
• Introduce disease management programs to promote healthy behavior.
• Make healthy food options available.
• Encourage exercise.
• Discourage unhealthy habits. For example, make the workplace tobacco free.
• If you have a fairly large workforce, provide on-site medical facilities.
• Use employee assistance programs (EAPs) to help with family and home issues that often emerge when managing long term chronic conditions.
• Create mobility throughout the day. Being sedentary or standing for long periods can create problems for employee with health conditions.
• Conduct periodic ergonomic assessments.
• Encourage breaks in concentration and focus by dividing tasks into shorter cognitive units.
• Establish a safety committee that recognizes and rewards valuable safety suggestions.
• Build in accountability for the workplace health and safety committee at the supervisory level.

Of course, these guidelines apply equally to all of your employees.

To learn more, feel free to give a call.

Thousands of workers suffer abuse at home and, all too often, this violence spills over into the workplace. According to the American Bar Association Commission on Domestic Violence, there are 30,000 to 40,000 incidents of on-the-job violence a year in which the victims knew their attackers intimately. More than seven in ten (71%) human resources and security personnel surveyed have seen domestic-related violence at work.

A violent episode on the job can endanger co-workers, as well as the victim. What’s more, female workers abused at home have higher rates of absenteeism, drug abuse, and depression that increase health insurance costs and lower productivity – costing businesses more than $4.5 billion a year.

The law requires employers to provide all employees with a safe workplace. Failure to act on the knowledge that domestic violence could threaten workers makes your business legally liable.

In deciding whether an employee might be a victim of domestic violence, beware if the worker:

• has unexplained bruises that don’t fit their injuries
• wears inappropriate clothing that might be covering up injuries
• seems distracted, anxious, upset, or depressed
• has a high rate of absenteeism
• receives repeated, upsetting telephone calls

If you notice any of these signs, talk to the employee privately, expressing concern about possible abuse. Be supportive and keep this information confidential, except for individuals who need to know, such as security personnel. Offer company and community support and be flexible with the employee’s working arrangements.

According to the Family Violence Prevention Fund, supervisors are usually the first people to become aware of an employee who might be a domestic violence victim. Supervisors should refer potential victims to the Employee Assistance Program or a community domestic violence program. The National Domestic Violence Hotline number is (800) 799-SAFE (7233).

A word to the wise!

Social media rules! In 2012, Twitter, Facebook, and Tumblr users sent tens of millions of messages every day– and new players keep entering the marketplace. Although these platforms provide significant benefits for businesses of all sizes, they also pose a variety of risks. Everything from employment, privacy and security, through intellectual property to media-related liability.

Chances are your employees are using social media, either at home or work, in ways that could put your business at risk. To limit this exposure, experts recommend creating social media guidelines based on a five-point checklist:

1. Assess both your company’s general social media activities and individual social media campaigns, weighing potential risks against benefits as accurately as possible.
2. Designate specific individuals and departments to develop, execute, and monitor a comprehensive and proactive social media strategy – and make a senior executive responsible for implementing it in a timely fashion.
3. Have the policy reviewed by the relevant departments (human resources, IT, communications, and legal) and by an outside law firm.
4. Because employees pose the biggest risk to a company, although often unwittingly,,provide educational programs about the danger of damage to the company by using social media on the job or at home.
5. Create a social media agreement for employees to review and sign as a condition of employment and part of their employment contract. Update the agreement annually, or as often as needed, to address changes in social media that might impact your risk in new ways.

Following this checklist will help position your business to reap the enormous benefits that participationin social media offers.

As always, we’re here to help you– just give us a call!

Every business is vulnerable to disruptions. Most companies have taken steps to mitigate the impact of major hazards. However many businesses have neglected smaller, more probable perils, ranging from inadequate fire protection and offsite data backup, through the death or disability of key personnel, to over-reliance on a limited number of vendors.

While you can transfer many risks that could disrupt your business to insurance companies (through such coverages as Business Interruption and Extra Expense policies), this probably won’t be enough to ensure that the company will survive or continue its long-term growth and profitability. To prevent and/or reduce the impact of such a mishap, it makes sense to implement Business Continuity Planning (BCP). This process involves three key steps:

• Pre-disruption planning. Assess the “risk and threat environment” of your business and take steps to reduce these hazards and weaknesses.
• Disruption response. The extent and nature of losses will depend on the effectiveness of the emergency plans that you implement during the incident to provide a methodical, rational, and coordinated approach to dealing with the disruptions.
• Post-disruption recovery. While the first two steps can reduce or mitigate risk, the recovery process focuses on rebuilding and restoration. Although many businesses depend heavily on central and distributed computer resources, a comprehensive BCP involves a wide variety of crucial activities that need to continue with minimal interruption.

Your BCP should not be a one-time project that involves creating a plan and then moving on to “business as usual” – but a long-term commitment to design, develop, implement, and maintain a comprehensive, company-wide strategy to keep your business running effectively..

We’d be happy to review the risks facing your business and tailor a Business Continuation Plan to your needs.

Chances are that you outsource most risk management functions to an insurance company representative or agent. However, to protect your business against the risks you face at a price you can afford, you need to control the presentation of your loss and coverage information to insurers. In other words, it makes sense to provide what an underwriter needs to write your business: a “risk profile” that shows a historic record of your exposures, loss data, and insurance contracts.

Your profile should include these items:

• A history of the firm that’s positive and realistic. The more effectively you’ve adapted to the recession, the better your chances of getting a competitive rate.
• Résumés of key management— to show that you and your team know your business.
• Marketing materials and Web page(s).
• A D&B Report. Without one, you might get a lower grading. If you’ve had financial problems, some insurance companies might be willing to write your business, as long as you provide this information upfront.
• Audited financial statements, if applicable.
• Estimated values, including sales, workers compensation payroll, automobile fleet, property and equipment.
• Sales and payrolls for the past five years.
• Insurance loss runs and claim runs during the past five years for all policies, valued within 90 days of renewal.
• An outline of your workplace safety plan(s).
• Fleet maintenance schedules, if applicable.
• Your workers compensation experience modification factor.

Be sure to review all data on your company in the files of your insurance company and add it to your database.

Maintaining a comprehensive, accurate, and updated risk profile, and staying on top of how you present this information,will play a key role in securing a comprehensive and cost-effective insurance program.

Our risk management specialists stand ready to offer their advice at any time.