Risk Management Bulletin

$100,000,000,000 a year.

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 absentee records: They’re likely to be gone at 2.5 times the rate of the average employee – or perhaps by their Workers Comp claims: Three to five times those of non-abusers.

You’ll also know them by how much they cost your health plan: 300% higher than nonabusers (not to mention the far greater human costs to co-workers, families and the abusers themselves).

Despite the war on drugs, there’s no overall federal drug-free workplace law for the private sector. Although a few states require drug-free workplaces, others take the voluntary approach. For example, some 13 states reduce Workers Comp premiums for businesses with a drug-free workplace program.

If you create such a program, observe these guidelines:

• Create a policy. Expressly ban illegal drugs and abuse of alcohol; specifically state which drugs and related acts are prohibited; explain the steps you’ll take to back these edicts; and detail the consequences for their violation.
• Develop a testing program. Decide whom to test, when to test (e.g. pre-employment, random, regular, reasonable suspicion, incident-related), who will do the test (preferably a certified independent lab, with at least two tests showing positive), and what will happen after a positive finding.
• Decide what to with abusers. Although some organizations discipline or terminate, others see abusers as valued employees with a problem, who are well worth saving. Many businesses set up Employee Assistance Programs (EAPs) to deal with drug and alcohol issues off site. Establishing an EAP shows respect for your employees and offers an alternative to dismissal.
• Define the role of your supervisors. Supervisors will probably be the first to notice the signs of abuse. They need tutoring on what to look for, and how to document and deal with it. Make sure that they do NOT attempt to diagnose what are essentially medical issues, or to counsel abusers. Their role is to report behavior and support what experts decide are appropriate responses to individual situations.
• Communicate to employees the details of your program, the effects of abuse, and the importance of understanding the problem and reacting in a supportive way.

For more information, feel free to get in touch with our risk management specialists.

If your idea of orienting a new employee is to introduce them around and show them the bathroom and the coffee room, you need to reorient yourself.

New employees are five times more likely than experienced workers to suffer a lost-time injury on the job in their first month at work. What’s more, two in five workers injured on the job have been doing it less than a year.

Why are “newbies” so vulnerable, and more important, what can you do about it?

This vulnerability results from a combination of ignorance and fear by workers and employers alike. New workers are unfamiliar with the tools, conditions, and most important, safety hazards, associated with the job. However, many employers assume that new employees know more than they do. Certain jobs require precautions that might seem like common sense to someone who has spent years doing them, but that newcomers have never even thought about.

Rookie workers are often afraid to ask questions, so that they won’t seem unable to do the job and be vulnerable to termination. Questions also reinforce supervisors’ awareness of safety issues by reminding them of things that they didn’t explain fully or forgot to mention. Supervisors need to keep reminding new workers that the more questions, the better.

To encourage safe-mindedness on the job from Day One:

Acclimate new hires to workplace safety starts as soon as possible. Orientation is the perfect place to introduce safety training to a new worker. The new hire packet should include a safety policy that covers generic concerns and sources for additional information so that the employee feels comfortable asking questions.
Incorporate safety information in your walk-through, pointing out the safety elements you’ve built in, such as the location of fire exits and extinguishers, first-aid kits, and eyewash stations. Stress less obvious safety features, such as letting new workers know that they can improve safety by keeping walkways clean and clear. Imparting safety knowledge will also make the newcomer feel valued and informed, leading to a more engaged and productive employee.
Finally, if you haven’t already done so, set up and monitor a comprehensive safety training program for new hires.
Our risk management professionals would be happy to offer their advice. Just give us a call, or send an e-mail

Most on-the-job accidents occur in “safe”� workplaces. Why?

Some on-the-job injuries result from inappropriate safety equipment or unsafe processes and procedures problems that workplace safety laws can help correct. However, most of these mishaps are due to employee error (taking unneeded chances without thinking about them). For example, a worker might suffer a back injury despite being trained in safety, having a safety belt available, and knowing that their behavior is risky.

Job-related excuses for a back injury might include:

• “I’ve picked up bigger boxes than this before without hurting myself.”�
• “Back belts are for sissies.”
• “I’m too busy to stop and get a belt.”
• In these cases, the employee at least thought about the possible dangers in lifting and alternatives.

You might also hear such non-job-relatedreasons� for ignoring safety procedures as:

• “I’m mad at my spouse. My kids are a pain.”
• “How am I going to get my car fixed? Where will the money come from?”
• “What should I wear tonight? Do the Joneses like asparagus?”
• “I sure need a cigarette. When’s my break?”

The solution to these cavalier attitudes: Develop a comprehensive, effective employee safety motivation program.

Market the program by instilling the value of safety. Include program evaluation and trainee feedback for supervisors and employees. Create detailed guidelines and documentation Set goals and reward success by providing such incentives as lottery tickets, gifts, savings bonds, and cash.

Although these efforts involve costs, they can save you big dollars. The rate of return on an effective safety program can be $4 to $10 for every $1 you invest.

What’s not to like?

With the “Web 2.0″� world of Facebook, LinkedIn, and other networking sites expanding exponentially, your company and your employees increasingly are becoming involved in the world of social media a reality that creates both opportunities and risks for your business. A comprehensive workplace policy on social media to help you manage this exposure should include these guidelines.

1. Be sure that this policy meshes with other company guidelines on Internet usage, privacy, nondisclosure, noncompetition, ethics, etc. For example, both your social media and Internet policies should ensure your right to monitor any messages sent or received within the company’s e-communication systems.
2. Have employees acknowledge that they understand your policy and agree to it as a condition of employment. Remind them that you’re an at-will� employer (unless you have employment contracts or bargaining agreements that limit termination options).
3. Tell employees that, if they publish anything about your organization, they must note that they are employed there, and that their views are entirely their own.
4. Emphasize the risks of online publishing, including the danger of disclosing confidential information which the company hasn’t released. If they’re in doubt, they should check with their supervisor.
5. Make sure employees know that they’re legally liable for what they publish and that if they publish words or images embarrassing or harmful to the company, they’ll face discipline.
6. Prohibit them from disclosing anything that would allow hackers to access personal information. A name and birth date can be enough for identity thieves with Web-crawling applications to triangulate their way to sensitive personal information.
7. Stress the need for employees to check facts before publishing or attributing information and to make sure that they don’t present their opinions as facts. Doing so can make it easier to prove malice in defamation or invasion-of-privacy cases.

For more information, feel free to contact our risk management professionals.

Emergency preparedness is essential for all of your employees – but especially for those with disabilities.

Emergency Action Plans (EAPs) help orchestrate employer and employee actions, including evacuations, during a workplace emergency. An employer must have an EAP for its facilities whenever a specific OSHA standard mandates one for example, at any facility that requires workers to evacuate after a fire alarm. Employers at facilities with fixed extinguishing systems and fire detection systems must also develop an EAP. What’s more, OSHA strongly recommends that all businesses have an EAP.

Your EAP must include these elements:

• A means of reporting fires and other emergencies
• Evacuation procedures and emergency exit route assignments
• Procedures for employees who remain to operate critical facility operations before they evacuate
• A method of accounting for all employees after the completion of emergency evacuation
• Rescue and medical duties for those employees who are to perform them
• Names and/or job titles of people to contact for further information or explanation of duties under the plan

Employers covered by the Americans with Disabilities Act (ADA) who are required or who choose to adopt EAPs must also include procedures for evacuating people with disabilities. Even employers without EAPs should address emergency evacuation for employees with disabilities as a reasonable accommodation under the ADA.

The California Governor’s Office of Emergency Services offers these disaster preparedness tips for disabled individuals:

• Set up a disabled worker’s job area so that they can quickly get under a sturdy desk, table, or other safe place for protection; this will be essential during an earthquake or explosion.
• Identify doorways behind which the worker can take cover.
• When practicing emergency exit drills, include any special assistance a disabled worker might require; at least two other workers should be familiar with the disabled worker’s special needs, including how to operate any equipment the person uses and the location of emergency supplies.
• Have workers with disabilities keep a list of medications, allergies, special equipment, names and numbers of doctors, pharmacists, and family members with them at all times.
• Make sure that these workers keep extra medication with their emergency supplies.
• Require mobility-impaired workers to have walking aids close by at all times.

For the rest of the winter, many employees will need to work briefly or for sustained periods in cold weather — leaving them vulnerable to special hazards.

The two main health dangers from overexposure to cold are frostbite and hypothermia. Frostbite occurs when body tissues freeze; it usually affects fingers, toes, nose, cheeks, and ears. Frostbite can cause permanent tissue damage and loss of movement in affected parts. Hypothermia results from exposure to cold, which plunges body temperatures dangerously low. Hypothermia can also occur in above-freezing temperatures when it’s windy, or when a person is exhausted or wearing wet clothes. Untreated, it can lead to unconsciousness and death.

Wearing the right clothing is essential for workers to protect themselves against cold weather and to prevent heat loss. Canada’s largest union, the Canadian Union of Public Employees (CUPE), recommends that workers wear:

• Undergarments – A cotton shirt and shorts under thermal underwear (preferably a two-piece style). To avoid constricting blood vessels, the fit should be loose.
• Socks – Should be woolen, high, and encourage evaporation of sweat. Stretch socks restrict circulation.
• Pants – Either wool or quilted pants or lined thermal types. Pants should be roomy and worn with suspenders rather than a belt, which are constricting.
• Boots – Should be felt-lined, rubber bottomed, and leather topped, with removable insoles. Footwear should be waterproof and reach high up the leg.
• Shirt – Wool (cotton or synthetic for people allergic to wool) over underwear tops and suspenders. To aid ventilation, the shirttail should be worn outside the pants.
• Head covers – Wool knit caps or hat liners that extend down the back of the neck. A balaclava (ski mask) provides further face protection.
• Face masks – For workers who can’t afford reduced vision on the job. Workers should remove facemasks periodically to check for frostbite.
• Gloves and mittens – Mittens offer the best protection, but limit finger movement. On very cold days, it’s wise to carry both.

In all too many workplaces, good housekeeping tends to fall at the end of the priority list for both management and employees. However, this creates a problem because there’s a direct correlation between a clean, neat, well-organized workplace and a safe healthy one.

Good, safe housekeeping doesn’t just happen. Nor is it something that you can do once a month and forget about. You and your employees must tackle a daily mission with energy, focus, and purpose. You have to plan for it, involve employees in it, and sustain it. Nevertheless, if you do, the rewards will be substantial: Fewer accidents, greater productivity, and a more pleasant, healthy place for all to work.

Poor housekeeping can frequently contribute to accidents by hiding hazards that cause injuries, according to the Canadian Centre for Occupational Health & Safety (CCOHS). If the sight of paper, debris, clutter, and spills is accepted as normal, then other, more serious health and safety hazards might be taken for granted.

For employees to become willing and enthusiastic supporters of the program, they need to understand that housekeeping duties, rather than being bothersome chores (which is probably the way most of them think of them now), are fundamental to their own safety and health. Make housekeeping a part of everyone’s job: No matter what other tasks employees perform, each of them should also take responsibility for keeping the workplace clean, organized, and safe.

Be sure to motivate workers by using such reminders as regular safety meetings, signs, posters, and incentives, together with performance credits for housekeeping duties. Set aside daily times for these tasks and supervise employees closely.

To maintain a safe workplace, housekeeping really has to become a habit. That’s where checklists come in. These lists should include:

• Workstations
• Floors, aisles, stairways
• Cords, cables, hoses, cartons, and other tripping hazards
• Dust, dirt, and grease
• Clutter, scrap, and trash
• Tools and equipment
• Storage areas
• Chemicals
• Flammable and combustible materials
• Waste disposal
• Work surfaces
• Spills
• Lighting
• Entry and exit areas

It’s easy to express some of the most important business concepts in clear terms: “Buy low, sell high.” “The devil is in the details.” “Time is money.” However, implementing such familiar phrases often requires complex thought processes, calculations, assumptions, expertise, and creativity.

When a business is interrupted, the owner makes a seemingly clear request to an insurance company: Pay me for the sales I would have had. Yet, a complex reality can underlie this reality. When the owner has to prove the sales that they would have had, the projected or estimated amount is often a challenge. And because insurers often hear “We were having our best year yet …” from claimants, it’s no surprise that they often view Business Interruption claims with a measure of skepticism.

These claims can become more difficult and even contentious if differences of interpretation arise. A successful claim might require maneuvering through such inherently gray areas as financial projections, consumer demand, and policy interpretation, to reach a number that’s reasonable, credible, defensible, and well supported.

This equation summarizes the formula for determining Business Interruption losses:

BI = T x Q x V

where:

BI = Business interruption looses

and:

T = The number of time units (hours, days) that operations are shut down
Q = The quantity of good or services normally produced, or sold, per unit of time used in T
V = The value of each unit of production or service, usually expressed as profit.

When you file a Business Interruption claim, we stand ready to help you implement this equation. Feel fee to get in touch with us.

On an average day, there are more than 200 workplace fires in the U.S. These fires kill hundreds of workers a year, injure thousands more, and cost American businesses billions in damage and lost productivity.

An effective workplace fire prevention program should include these 10 essential elements:

1. Inspect all areas of your workplace for fire hazards on a regular basis. Pay particular attention to areas where fires are most likely to occur. More than half of all industrial fires break out in everyday workspaces, while a high percentage start in storage areas.
2. Educate employees about fire hazards. Use bulletin boards, memos, and safety meetings to distribute fire prevention information. Update your training whenever new equipment or processes introduce new hazards.
3. Have the right fire extinguishers. Have maintenance check extinguishers throughout your facility regularly to make sure they’re charged properly. If you expect employees to use extinguishers, OSHA requires that you train them to handle an extinguisher effectively.
4. Store materials safely. Keep storage areas well ventilated and free of ignition sources. Be particularly careful with flammables
5. Dispose of wastes promptly and correctly. Don’t allow combustible waste materials to build up. When disposing of other materials, consider the ease of ignition; For example, oily rags should be disposed of in closed metal containers.
6. Emphasize good housekeeping. Ensure that all work areas are clean and free of fire hazards.
7. Make sure ventilation systems operate effectively to remove flammable vapors, gases, and combustible dust.
8. Service machines regularly. Set up and enforce an effective maintenance schedule.
9. Pay attention to electrical safety. Check circuits, outlets, wires, and plugs regularly. If you allow employees to use coffeemakers, fans, and other appliances, require them to be used safely and turned off at the end of the shift.
10. Enforce fire safety rules, to make sure that all employees follow these precautions.

Recent economic, cultural, and legislative developments have left businesses increasingly vulnerable to employment-related litigation. The recession has led to massive layoffs and pay cuts, fostering the spread of discrimination claims. The Equal Employment Opportunities Commission reported a 15% year-to-year increase in filings from in 2008 – and the rate of increase has been growing throughout 2009. Experts see the trend intensifying this year, as the EEOC greenlights litigation based on claims filed during the past two years. Employment law attorney Paul Siegel expects a “tsunami of discharges and therefore claims and threatened claims [leading to] a renaissance of lawsuits.”

Recent accusations of affairs in the workplace by such high-profile personalities as David Letterman, and ESPN commentator Steve Phillips, have highlighted the prevalence of sexual harassment on the job – and the incentive for plaintiffs attorneys to file harassment litigation.

What’s more, two federal laws that took effect last year make it easier for disgruntled employees to sue employers. Under the Lily Ledbetter Fair Pay Restoration Act, discriminatory pay decisions occur with each pay period, making every paycheck a potential start point for a wage discrimination suit. The Americans with Disabilities Act Amendments Act of 2008 makes it more difficult for employers to define such terms as “reasonable accommodation,” “undue hardship,” and “essential job functions.”

To help cushion your business against the impact of discrimination-related litigation in this threatening environment, risk managers recommend these guidelines:

• Maintain, enforce, and update an effective anti-discrimination policy.
• Communicate this policy to all employees.
• Consult with outside counsel before making any significant employment-related decisions (such as pay cuts or layoffs).
• Carry comprehensive Employment Practices Liability Insurance (EPLI).

Our risk management professionals would be happy to help. Just give us a call.