Risk Management Bulletin

Using the American Society of Safety Engineers (ASSE) Crisis Management Plan Guidelines can go far to improve safety and security in your workplace. To make the most effective use of the guidelines, ASSE recommends taking these steps:

• Reassure employees that safety measures are being taken for their protection.
• Report unusual or suspicious activity or strangers in or near the facility to authorities; if immediate attention is warranted, call 911.
• Urge employees and their families to be aware of their surroundings. Increase security and surveillance activities and enhance outdoor lighting; check the IDs of everyone entering the building.
• Update the company emergency response plan regularly and review it with employees. Make sure that all necessary contact names and numbers are correct and easily accessible.
• Consider upgrading in-house emergency services capability to EMT or 40-hour First Responder.
• Offer employees escorts to parking lots and public transportation.
• Share your response plan with local municipalities and emergency response units.
• Help employees get information during a crisis by making a news network available on breaks.

Our risk management professionals would be happy to help you implement workplace crisis planning. Just give us a call!

If you’re using “contingent workers” — on a part-time, temporary, or contract basis — be aware that these employees face a greater risk of occupational injuries and illness. According to the National Institute for Occupational Safety & Health (NIOSH) reasons for this higher vulnerability include the tendency to outsource more hazardous jobs, lack of experience and familiarity with operations in a dangerous workplace, inadequate protective equipment, and limited access to such preventive measures as medical screening programs. The chances are that temporary workers have a wide variety of experience levels (due to high turnover) or have had the benefit of formal safety programs.

Also, bear in mind that even though the safety of contract workers is the legal responsibility of the contractor, the OSHA General Duty Clause could be interpreted to make you responsible for protecting everyone in your workplace. To help meet this obligation, and bolster workplace safety compliance we’d recommend that you take these steps:

1. Include safety requirements in the contract, even if only to state that the contractor must comply with OSHA requirements. If the contractor doesn’t follow safety rules, you can force compliance or stop work for breach of contract.
2. Set the safety compliance ground rules up front, during orientation or before they start work.
3. Share accountability. Although an accident caused by a contract worker might not be your legal responsibility, it’s still your problem. Don’t leave safety compliance problems for the contractor to solve alone.
4. Offer assistance. Explain all hazardous conditions or processes during the initial project orientation and stress any rules and restrictions, such as hot-work permit requirements, lockout/tagout, and confined spaces situations and needs.
5. Document communications with contractors. Give the contractor(s) a document or form to sign when resolving specific safety problems or for conducting inspections.
6. Read the OSHA Multi-Employer Citation Policy. OSHA published an enforcement and compliance directive (CPL 02-00-124, December 10, 1999) laying out its citation policy for multi-employer worksites, which includes contractors.

Finally, don’t forget that most contingent workers will only be in your workplace for a relatively short time. This only adds to the urgency of getting them up to speed on your company’s safety policies and practices as quickly as possible.

Most medium-sized and smaller companies protect themselves against their property and liability exposures by purchasing Commercial insurance, while large corporations and government agencies prefer to use some type of alternative risk financing. However, businesses of any size can employ this tool to enjoy such benefits as improved cash flow and a lower total cost of risk.

Insurers have developed a number of colorful terms for alternative risk financing techniques. These methods include:

• Excess insurance
• Reinsurance
• Guaranteed cost
• Retrospective rating
• Large deductible
• Self-insurance
• Captive insurance

Using alternative risk financing requires management discipline and a willingness to commit resources. Size isn’t that important. The main criterion is losses. As a rule of thumb, alternative risk financing makes sense for a business whose claims have these characteristics: (1) Reasonable predictability; (2) moderate volatility; (3) minimal exposure to a catastrophic event; and (4) high frequency and low severity. For example, a large hotel or bank would probably experience a number of small Workers Compensation claims, but few large claims.

Casualty insurance products (such as Workers Comp, General Liability, and Auto Liability) are the best candidates for alternative risk financing. Because Comp and Liability claims tend to be paid over one to five years or more, insurance companies that write these policies generate substantial investment income on their premium reserves until losses are paid fully. By using alternative risk financing, your company can invest your funds elsewhere, rather than paying premiums.

Our specialists would be happy to review your business and see if alternative risk financing make sense for you.

Be afraid — be very afraid — because hackers are breaking into Web sites around the world at a frightening pace! These cyber-pirates can copy, edit, or delete files; or trash your site by stealing programs and disrupting networks. Once they’re into your site, hackers can also use phony identities to buy goods and services or vandalize the site by changing its look, text, and overall message.

The easiest way to prevent a hacker from entering your site is to install a firewall on the Web server that keeps out unauthorized access by monitoring the flow of information between your server and the Internet. Although a well-designed firewall should stop all Internet attacks, most sites don’t have properly configured firewalls. One survey of more than 2,000 sites concluded that these companies were doing the equivalent of “putting an airbag in the backseat of a car when it comes to security precautions.”

Before you implement a firewall system, consult with a security expert. The person in your company who created your site might know whom to call; otherwise, ask your Web consultant or Web-hosting company. The expert will want to know if your site was created in a secure fashion: Did your Web developer use secure protocols and software when building the site? Is the ISP that’s hosting your site secure?

According to the U.S. Commerce Department, employee crime costs American businesses more than $50 billion a year – that’s “billion with a ‘B” – and three out of four employees have stolen from their employers at least once.

To help prevent a fox from getting into your hen house, a leading risk management group recommends these guidelines:

1. Screen job candidates. You might discover that a potential employee was fired from another job for stealing. A thorough background check can give you hard evidence when doing an interview. Look for discrepancies between what the candidate says and what’s on paper; too many differences will point to a problem.
2. Reduce the temptation to steal. Be careful when making operational changes. The thief might become familiar with the change and believe that they have specialized and private information they can use to their advantage. To avoid this danger, let everyone know about new procedures. Also, lock and bar all windows in warehouses or storerooms, create employee sign-ins in these areas, and never leave anything lying around to be picked up easily.
3. Protect monetary assets. Thieves sometimes write checks to ghost employees or vendors and use the money for their own finances. Separating accounts payable from accounts receivable will reduce the chances of such a fiasco. Also, if Jim in sales never, ever takes a vacation, something might be amiss; he might be snooping around or doing something besides genuine hard work.
4. Schedule periodic audits. If this isn’t possible, have an outside party review your accounting and bookkeeping practices.
5. Create a zero-tolerance policy. Potential in-house thieves won’t be as inclined to steal if they know that they’re risking their job.
6. Investigate suspected fraud. The Association of Certified Fraud Examiners (www.acfe.org) offers expertise in this field.

For an in-depth review and analysis of your in-house security precautions, please contact our risk management specialists.

You can’t turn on the television, surf the Web, or read the papers without realizing that the economy is in transition — which means that a company’s financial fortunes can change daily. Amid all this change, how safe is your insurance company?

Even the strongest financial entities could face a devastating blow from market conditions, whether due to deteriorating claims experience or uneven investment results. As professional risk managers, we can’t ignore the possibility that your insurer might become a victim of today’s unsteady business climate.

To address this remote – but not impossible – scenario, we take these precautions:

• We monitor various rating services, such as Best’s, which regularly reviews the financial stability of insurance companies. Although a good rating doesn’t guarantee a problem-free carrier, it offers a strong indication.
• We help you stay on top of the marketplace by determining if there are better options for placing your protection.
• We also factor in how comfortable you are with the financial stability of each option. We work with you to see how your state “guarantee fund,” designed to protect policyholders when their insurance company can no longer pay its claims, can provide a safety net for your business.

For an in-depth analysis of your coverages, give us a call.

Every business needs to create, update, and consistently enforce a hiring policy with zero tolerance for discrimination and harassment and a thorough investigation of any complaints. Without such a program, you’re leaving yourself wide open for punitive damages litigation under federal employment practices compliance regulation.

Give managers responsible for interviewing and hiring written instructions or training on what they can and can’t ask during interviews. Use the interview process to learn the applicant’s potential for filing Workers Compensation or Health insurance claims. The first interview should focus only on the person’s ability to perform the job. However, after receiving a conditional job offer, an applicant might be asked to complete a medical history to determine their qualifications for the job and any needed accommodations by the company.

Be sure that every applicant signs an acknowledgement that any misstatement or omission on the questionnaire can serve as grounds not to hire them or to end their employment.

We’d be happy to review your interview procedures – just give us a call.

Whether your employees are outdoors — on the job or at play this summer — or working indoors in a hot environment, they need to know how to cope with hot and humid conditions that can pose serious dangers to their health that the heat brings.

The human “cooling system” uses perspiration and blood vessels to regulate body temperature. However, when someone is working hard in the heat, especially when it’s also humid, this system can break down, raising the person’s temperature and heart rate. Although people who are past middle age or have health problems are especially vulnerable, the young and healthy can also suffer from heat-related conditions.

Overheating also affects the brain. A temperature hike as little as 2 degrees can impair mental functioning, which makes heat an underlying cause of job accidents, as diminished ability can lead workers to overlook hazards and make mistakes.

In order of seriousness, heat hazards — and their remedies — include:

• Heat rash — Can be irritating: Take a shower and use a little talcum powder.
• Heat stress — Symptoms include thirst, vision problems and/or feeling woozy or tired: Drink a cool, non-alcoholic beverage in a shady place.
• Heat cramp — Involves pain from twitching muscles caused by losing salt from perspiration: Get into the shade and take cool fluids.
• Heat exhaustion — Look for heavy perspiration, fatigue, queasy stomach, and chilly, clammy skin: Put the person in the shade, with their feet slightly elevated, provide a cooling beverage (unless the victim is nauseated), and be prepared to seek medical assistance.
• Heatstroke — Can be a fatal condition, characterized by a lack of sweating, a temperature elevated by up to five degrees, hot skin, mental confusion, and loss of coordination: Call paramedics immediately — and then get the victim to a shaded spot and keep him or her cooling down with cold water sponges or ice packs until help arrives.

To help keep your workers protected from the heat, we’d recommend that you advise them to: (1) Wear sunglasses for protection against exposure to UV rays; (2) Apply sunscreen with an SPF of 30 or more to minimize the risk of cancer or sunburn: (3) Keep hydrated with plenty of cool — not cold — water and beverages free of alcohol or caffeine; (4) Minimize exposure to the sun by going indoors or staying in the shade during the heat of the day; and (5) Eat light meals with small servings of fruits and vegetables (which are rich in fluids).

For valuable information on dealing with heat-related issues, check out the National Oceanic and Atmospheric Administration (NOAA) web page, Heat: A Major Killer.

The Occupational Safety and Health Administration (OSHA) is taking another look at the controversial issue of how safety incentive programs on the job impact the willingness of workers to report injuries or accidents.

The new review will examine the conclusion of an earlier OSHA report that a 2005 explosion at a BP oil refinery — which killed 15 employees and injured another 180 people — was due in part to a job safety program that provided workers with disincentives for reporting injuries and accidents (the lower the reported rate of mishaps, the higher the bonuses that employees received).

OSHA recently warned employers that if their safety programs discourage workers “in any way” from reporting potential dangers on the job they could face penalties for discrimination against the employee’s right to free speech — as well as violating OSHA requirements that the employer keep accurate workplace records. Although programs which encourage worker safety by offering employees or work teams such incentives as bonuses for having no injuries or accidents over a period of time might be “well-intentioned,” OSHA noted that these programs are far more effective if they focus on positive safety-related activities, such as pinpointing hazards in the workplace, or helping investigate mishaps or “near misses” on the job. For example, the agency’s guidelines for its Voluntary Protection Program include providing workers with such rewards as cash, gift cards, and T-shirts. A company might also honor workers for their contributions to a comprehensive safety program by hosting a party. On the negative side, employees who violate safety rules would receive demerits.

See an in-depth report on this complex issue from the General Accounting Office here.

The bottom line: To develop an effective workplace safety program, you’ll need to create and maintain open lines of communication with your employees. Our risk management professionals stand ready to analyze your business and offer recommendations on a comprehensive safety program to keep your workers as safe as possible.

Any company that has customers on its premises is vulnerable to slip-and-fall claims: A con in which criminals stage “dangerous” situations so they can fake a tumble and claim compensation for their injury.

Because slip-and-fall claims can easily be legitimate, every business needs to either carry coverage against this exposure or self-insure against it.

According to the National Insurance and Crime Bureau (NCIB), the number of suspicious slip-and-fall incidents rose more than 10% from 2010 to 2011, costing businesses hundreds of millions of dollars — not to mention driving up insurance rates — ultimately paid by customers in the form of higher prices.

A large percentage of these scams, often run by organized crime, target retail stores. Although there are a number of variations on the con, one common type involves a two-member “accident team.” While one person keeps lookout, the second pours a liquid or a piece of debris in a store aisle and then pretends to take a fall. At this point, the lookout appears to” “help the victim” and volunteers to act as an eyewitness, After telling store personnel that their injury might need medical care, the victim waits for a few days and then returns to demand (pricey) compensation under threat of a lawsuit.

In all too many cases, the store owner will pay up as a cost of doing business, rather than face the hassle and cost of litigation — not to mention the negative publicity involved. According to insurance experts, that’s one reason why most victims avoid reporting questionable slip-and-falls to the police — which makes the extent of these crimes even harder to measure.

If you carry slip-and-fall insurance, it makes sense to stand up against what you believe are phony claims: The insurance company will pick up the tab for providing a legal defense against litigation and reimburse you if you should lose.

If you don’t have this valuable protection, we’d be happy to find the best coverage for you at the best price. Of course, you should also report any suspicious claim to the NCIB nationwide fraud line at (800)-TEL-NICB.