Risk Management Bulletin

If disaster struck your workplace, how well would you, and your employees cope until first responders arrive – which could take hours? Disaster preparation can seem overwhelming. For busy small businesses, committing time to prepare for a potential problem can take a back seat to dealing with more immediate concerns. Trying to help small-business owners and other citizens get a handle on how to prepare and what to do during and after an emergency is the goal of the Community Emergency Response Team (CERT) programs, sponsored by the Federal Emergency Management Agency. Fire departments and private companies throughout the nation are coordinating these programs that provide free or inexpensive training in lifesaving skills. “If you can be prepared, then when disaster hits you’re not going to be a victim, you’re going to be part of the solution,” says Los Angeles County Fire Department Capt. Jeff Vrooman, who coordinates CERT training for the department. “We touch as many people as we can because it’s going to pay off greatly.”

Small-business owner Jeff Edelstein (SOS Survival Products, Van Nuys, CA) credits disaster preparation classes with helping him organize a safe evacuation of his neighborhood during the 2005 Chatsworth fire. “You don’t want to practice when a disaster happens,” says Edelstein. “Make your mistakes in a drill and learn from those mistakes.”

CERT trainees learn how to assess their workplace (or home or school) for potential hazards during a disaster. They’re taught the basics of fire suppression, how to triage injured people by the severity of their condition and to handle life-threatening injuries. Courses might also include basic search-and-rescue operations, classes on disaster psychology and the organization of volunteer teams, together with guidelines for working with professional emergency response teams.

Training geared to small-business owners will be added next year by the Business and Industry Council for Emergency Planning and Preparedness, a group of local emergency planners from business and government.
The program is needed to keep businesses in operation so they can provide the products, services, and jobs that communities will need to recover after a major disaster.

For a national overview of CERT programs, go to www.citizencorps.gov/cert/

In the aftermath of Hurricanes Ivan and Ike — or this summer’s Midwest flooding or California wildfires — thousands of small-business owners are being hit with the bills for salvaging their building or the business itself, because they didn’t carry enough (or the right type of) coverage. Insurance is always a gamble.

For example, a number of communities flooded this summer when the Mississippi spilled over its banks were considered far enough from the river to be safe; which meant that some businesses owners chose not to buy Flood insurance. However, no matter where you’re located, if a small stream near your business swells up after an unusually long period of rain and water pours in through the windows or door, coverage through the federal National Flood Insurance Program will pick up the tab. For more information, visit the program’s Web site, www.Floodsmart.gov.

Similarly, a standard policy probably won’t cover earthquake damage. California businesses can buy insurance through the state-run California Earthquake Authority at www.Earthquakeauthority.com. However, other states are highly vulnerable to quakes; the largest temblor in U.S. history, centered on New Madrid, Missouri in 1812, caused damage in half a dozen states and reshaped a section of the Mississippi River.

In the aftermath of September 11, insurance companies generally require businesses to purchase separate Terrorism policies. You don’t need to be in a high-profile target area such as New York City to consider this coverage. If you’re close to a federal courthouse or administrative building, it might be a good idea.

Many businesses buy Property insurance to protect themselves against losses from such perils as wind, rain, and hail. They’d be better off with a Business Owners Policy (BOP), which includes Property coverage, together with Business Interruption insurance. This invaluable coverage will pick up the tab for your company’s operating expenses and lost profit if the business is shut down for an extended period. That can include salaries and employee benefits, rent and line-of-credit payments. It doesn’t have to be a natural disaster that shuts down the business; even losses stemming from a power outage can be covered.

Some small companies should carry special policies because of the kind of business they’re in. For example, a heavily damaged bed and breakfast that would need to restore its quaint ambience by purchasing antiques would probably need additional “guaranteed replacement” coverage. For more information on business insurance, check out the Insurance Information Institute Web site, www.iii.org. To help make sure your business is protected against disaster, feel free to contact our risk management specialists.

Believe it or not, nearly half of workplace deaths occur in transportation-related mishaps. Financial losses come to an estimated $60 billion a year in direct accident costs and lost productivity. The loss of life is, of course, beyond measure. According to OSHA and two partner organizations, the National Highway Traffic Safety Administration (NHTSA) and the Network of Employers for Traffic Safety (NETS), businesses could avoid much of this carnage by following a 10-point pathway to workplace driver safety:

1. Management Involvement. Workplace road safety starts at the top. The program needs unequivocal management support in both policy-setting and allocating resources. But make sure that workers are involved in the decision-making process.

2. Written Policies/Procedures. Implement and enforce a strict, no illegal drugs or alcohol policy during duty hours (which includes all breaks and on-call periods). Set a policy on personal seat-belt use, distracted driving (including use of cell phones while driving), and use of personal vehicles for work.

3. Driver agreements. Have a written contract with each of your drivers which states that they understand and will follow all relevant policies and laws. With this document in hand, no one can later say, “They didn’t tell me that.”

4. Driver record checks. Driving records are public information, and it’s easy to get each prospective driver’s record of motor vehicle convictions and accidents. Screen out those with poor records or certain serious violations (such as reckless driving) before hire; and then institute a point system on those you do employ. DS Waters, a drinking water distributor, uses such a system with its 3,000 drivers, working in 40 states. Point totals are checked at 6, 12, and 36 months after hire. Drivers who come up short are taken off the road.

5. Reporting Policy. Make it clear that even a minor fender-bender must be reported to a supervisor immediately. However, looking at accident reports to find bad driving patterns isn’t enough: Scrutinize your drivers’ total behavior, even using in-cab video to study it. People take calculated risks and don’t have accidents. Accidents are poor indicators-because most people get away with risky behavior.

6. The vehicle element. Road safety has three components: The driver, driving conditions, and the vehicle itself. Purchasing vehicles with “best-in-class” DOT safety ratings and then implement the makers’ preventive maintenance schedule. Supplement this with a complete mechanical inspection at least annually, and keep all maintenance records on file. Insist that personal vehicles used for business be carefully maintained.

7. Discipline. Create a structured program of disciplinary actions based on a pattern of violations or incidents, with clearly stated penalties. Some companies use a point system for this.

8. Rewards. The other side of the disciplinary coin is to reward safe driving by building driving safety into the overall job performance evaluation, with rewards or incentives.

9. Compliance. Be sure that all drivers know the law, as spelled out by various agencies, including NHTSA, the Federal Motor Carrier Safety Administration, which regulates commercial trucking, the DOT, and other agencies.

10. Training. Because it’s a skill so commonly used, most people think they already know how to drive safely. A solid defensive driving training program, supplemented by constant reminders, can show how much they have yet to learn.

Although offices are usually thought of as safe and serene, in fact they’re rife with risks, both inside and outside the building. The Protection One security company recommends taking these safety precautions:

• Parking Lot Security/Lighting. Implement a “buddy system” to ferry workers to and from their cars. Limit parking lot access to controlled points and have the lots as well lit as possible. In fact, light is such a deterrent to crime that it’s wise to keep your entire facility lit, inside and out, during non-business hours.
• Entrance Area Safety. Make sure that reception areas are always manned, all visitors registered (even if they wear the uniform of contract cleaning or other service personnel), and all doors, windows, and locks checked frequently for proper operation. Use photo ID systems, with entry code systems checked often. Never let employees prop open a door with a chair so that it doesn’t lock behind them outside on a break.
• Suspicious Activity. Urge employees to report any suspicious persons or activity around the building. Never allow suspicious packages to be opened. Instead, report them to the authorities for proper search and disposal.
• Information Safety. Unfortunately, it’s increasingly easy for computer “hackers” or disgruntled employees to steal your organization’s vital business information. To guard against this threat, use the latest security software for your entire system, frequently updated, and make sure that this information is backed up on a regular basis. Shred paper documents with critical information as soon as they’re no longer needed.
• Equipment Security. Keep an inventory of all your critical equipment, hardware, and software. This is especially important as electronic devices keep shrinking in size, making them easier to conceal and remove. Having an inventory (many experts suggest taking photos of important items) will also make it easier for your insurance carrier to process any claim if anything “goes missing.”
• Employee Valuables. Provide secure places, such as lockable drawers and closets, for employee property and encourage their use. Valuables, especially any item that reveals personal information, should be locked away during company gatherings or break.
• Safety Team: Set up a group that includes both managers and employees that meets regularly with a set agenda.

For guidelines on keeping your office safe, please contact our risk management professionals.

Power tools are handy helpers — and a significant source of injuries in the workplace that can deliver paralyzing, even deadly shocks, cut off fingers, and slash, cut, and mangle flesh and bones. When employees use power tools they have to think about safe work procedures, as well as such personal protective equipment (PPE) as a dust mask, gloves, a face shield, safety shoes, and hearing protection. If they’re not sure which type of PPE they need, have them read the manufacturer’s safety instructions or check with a supervisor before using a power tool.

To keep safe when using power tools on the job (or at home, ) train employees in these essential do’s and don’ts:

Do:

• Use the right tool for the job.
• Inspect tools before each use.
• Make sure there are guards around points of operation and on/off switches.
• Be sure that tools are switched off before you plug them in.
• Turn off and unplug tools before cleaning or changing parts.
• Use three-prong grounding extension cords with equipment requiring three-prong plugs. Don’t use three-prong cords with two-prong adapters!

Don’t:

• Put a power tool down until it has completely stopped running.
• Use cords to raise or lower equipment.
• Fasten cords with staples, nails, or other fasteners that could damage cord insulation.
• Plug or unplug equipment with wet or sweaty hands.
• Use any tool that has a damaged casing, cord, or plug.
• Continue to operate a power tool that sparks, smokes, gives a shock, or smells like it’s burning.
• Get clothes or body parts near the point of operation.
• Use electric power tools in wet areas unless the tools have been specially approved for.

On a summer morning in 2006, in Brooklyn, N.Y., OSHA compliance officer Bob Stewart requested that six construction employees be removed from a deep excavation because of a hazardous 10-ton concrete abutment hanging above it. Fifteen minutes later, the overhang collapsed and fell, landing in the exact spot in which the employees had been working. That is an unusually dramatic example of a workplace close call, made rarer still in that an OSHA inspector happened to be on hand just moments before. But close calls, or “near misses,” are a part of everyday life.

Most employers take care to remind workers of the dangers that can lead to accidents and injuries and provide training on how to avoid accidents. And when an accident does occur, there’s an immediate response, followed by an investigation, so that similar accidents can be prevented in the future.

Failure to take these incidents seriously is begging for trouble, because it’s almost inevitable that, sooner or later, a tripping worker will fall, another will be struck by that door, the damaged rung of a ladder will cause a serious fall, and improper handling of strapping will result in dire injury.

Use these close calls an opportunity for instructive and preventive action. Begin by making it clear that workers are expected to report near misses — not to place blame, but to figure out how to prevent an accident next time.

Because the training opportunity will likely be greatest while the close call is still on everyone’s mind, right after the incident, deliver a toolbox or tailgate talk on what did happen, what could have happened, and how to make sure it doesn’t happen again.

Conduct a training session on close calls in general. The trainer or safety committee member should start by mentioning examples that have occurred in your operation and ask workers to add examples from their own recollection. The session should then focus on causes and, finally, on corrective action. By recognizing the “almost-accident” as a warning and encouraging safety awareness on everyone’s part, you’ll not only reduce the number of near misses but — far more important — also the number of real accidents.

Your business might well be a target for internal fraud. Fraud costs American businesses an estimated 7% of their annual revenues — and small businesses take an especially heavy hit, according to the latest Report to the Nation on Occupational Fraud & Abuse, based on 959 cases of occupational fraud investigated by Certified Fraud Examiners between January 2006 and February 2008. The most common scams among businesses with fewer than 100 employees were fraudulent billing and check tampering, with phony checks alone accounting for more than one out of four rip-offs (a far more common method of fraud than in larger organizations). To identify and curb fraud losses, The ACFE recommends these guidelines:

• Be proactive. Establish and maintain internal controls to prevent and detect fraud. Adopt a code of ethics for management and employees. Set a tone at the top that your company won’t tolerate any unethical behavior.
• Establish hiring procedures. Every company, regardless of size, can benefit from formal employment guidelines. When hiring staff, conduct thorough background investigations. Check educational, credit and employment history, as well as references. After hiring, incorporate evaluation employee compliance with company ethics and antifraud programs into regular performance reviews.
• Train employees in fraud prevention. Are they aware of procedures for reporting suspicious activity by customers or co-workers? Do workers know the warning signs of fraud? Ensure that your staff know basic fraud prevention techniques.
• Conduct regular audits. High-risk areas, such as financial or inventory departments, are obvious targets for routine audits. Surprise audits of those and all parts of the business are crucial. ACFE’s Fraud Prevention Check-up can help to identify fraud risks and establishing a strategy to prevent such losses.
• Call in an expert. For most firms, fraud examination isn’t a core business component. When you suspect or discover fraud, enlist the anti-fraud expertise of a Certified Fraud Examiner (CFE).

You can download The Report to the Nation from the ACFE Web site: www.ACFE.com/RTTN. For more information on developing and managing a comprehensive fraud control program, feel free to contact one of our risk management professionals.

As safety professionals know — but unfortunately, many employees don’t — lockout/tagout (LOTO) procedures are designed to keep workers safe while servicing and maintaining machinery or other energized systems.

Unintentional equipment startup accidents injure some 50,000 workers a year and kill 120 people. LOTO is not only good practice; it’s the law (29 CFR 1910.147). Even with the law in place, LOTO remains one of OSHA’s most violated standards, and these violations are expensive.

A leading safety resources Web site posted these “Fatal 5” main causes of LOTO-preventable injuries:

1. Failure to stop equipment. Some workers value productivity above all else. That’s normally a good thing, but not in this case. Others feel that their age or long experience with the equipment lets them work on it without “taking the trouble” to safeguard it properly. Either attitude can lead to the same, possibly deadly, result.
2. Failure to disconnect from the power source. In the case of electrical equipment, some workers feel that simply operating the on/off switch is all it takes to be safe. This ignores the fact that the switch might be defective or that power might find its way through a short circuit or other source — until they’re shocked to learn otherwise.
3. Failure to drain residual energy. Ask workers why TV sets carry a warning about trying to open the case even if the device is disconnected. You know, and they should, that it’s because many electrical devices store power in a capacitor or battery. Even with the plug out, the risk of shock remains. Employees need to expand this concept to other kinds of devices. A compressed spring, hot pipe, pressurized tank, or even a heavy object hanging overhead, also represent energy that continues to exist, even when the initial source of this energy is disconnected. To be safe, all forms of stored energy must be completely blocked or released.
4. Accidental restart of machinery. Even if one employee knows to shut down equipment before working on it, others might not. All too many unknowing workers have injured their fellow workers by restarting machines being worked on.
5. Failure to clear work areas before restarting. Restarting machinery must be handled with as much care as shutting it down and locking it out. A repair tool left in the works to fly out, or a restart while a co-worker remains in the path of danger represent hazards as significant as not locking out the machine at all.

Our risk management specialists would be happy to review your LOTO program. Just give us a call.

They might not be exciting or high tech, but safety signs in the workplace can be worth their weight in gold! Says a recent article on businessknowledgesource.com: “The importance of workplace safety signs can’t be stressed enough. [If properly designed and used] … signs can overcome a number of losses due to language barriers, reading abilities, and insufficient work experience. Wherever there’s need for general instruction, there should be a safety sign to help avoid potential injury.”

Of course, even the best signs won’t help if poorly designed or improperly used. Although OSHA uses ANSI standards to specify the design of such common signs as EXIT or CAUTION, there’s no way to regulate how every sign will be made and used.

An effective safety signage program should meet these standards:

• Visibility. It sounds basic, but signs can’t do any good if they’re not visible. There are plenty of reasons they might not be. Check your break room bulletin board. Is one sign plastered over others? Are the signs so old they’re now the color of the Declaration of Independence? Are they hidden in corners or in hard-to-reach places on the equipment they’re designed to explain? To enhance visibility, especially from a distance, choose such contrasting color choices as yellow on black and put borders around every sign.
• Noticeability. Qualities that make a sign stand out include shape and color; most people recognize a “stop” or “yield” sign without even reading it. Perpendicular signs are among the most noticeable, which is one reason that they’re used by stores seeking to stand out in a streetscape, and why they can be useful in identifying areas of special hazard.
• Legibility. One reason it’s hard to read government regulations as published in the Federal Register is the size and grayness of the type. In the same way, type size can make important safety signs stand out more, as does spacing between words and individual letters. Printing a sign’s message in a second color improves retention of the message by 82%.
• Durability. Signs need to survive the environment in which they’re placed. High heat, humidity, or corrosives can wilt or stain a sign beyond recognition. Don’t use cardboard when sheet metal is called for.

Even if your signs meet all these criteria, OSHA still requires that they be posted and maintained properly, either by you or by the supervisors of the areas involved. That leads to the classic compliance issue of how to make sure that all regulations are observed when you can’t be everywhere at once to check.

If you’re like most business owners or managers, you spend your days (and probably nights, too) working on and thinking about ways to reduce risk in your workplace. Unfortunately, all of it can come to naught without one thing your workers need to develop: A sense of safety awareness.

Without it, workers won’t wear their personal protective equipment (PPE), or won’t wear it properly. They won’t make full use of the safety features built into their equipment. And they won’t observe basic rules, such as those of good housekeeping, that can prevent accidents. Without safety awareness, workers might be thinking about production, their compensation, or tonight’s softball game — but not about safety on the job.

Here are four ways to instill safety awareness in your workplace.

1. Develop a Safety Manual. This book given to new workers on day one, says NIFB, should “pool safety information from department managers, equipment and tool manufacturers, and workplace safety experts,” and should include “startup and lockdown procedures, types of activity to avoid at work, and proper attire for operating equipment.”
2. Name a Safety Champion. Appoint one employee in each department or work area to research and report on safety at regular safety or department meetings. It’s often amazing how workers take to this responsibility. In one organization the safety coordinator, as he’s called, subscribes to safety magazines and continually contacts safety organizations to bring his co-workers the best and latest information. The gratitude he receives from colleagues is his only payment for this work.
3. Hold a Safety Event. Encourage employees to plan and carry out safety demonstrations or create exhibits for these events, which can be either freestanding or part of larger company gatherings. This as an ideal time to hold contests or distribute safety awards. You can also invite guest speakers from vendors or safety or trade associations.
4. Build Safety into Employee Communications. Every employee contact, from daily e-mails to paycheck stuffers to newsletters, should stress workplace safety. In fact, the more you focus on safety, the more it will become a core value for your organization. Don’t forget posters, and how to display them properly. This means locating safety messages so they’re not lost in a sea of EEOC and Wage and Hour announcements. Make sure that these messages get priority placement in work areas and aren’t covered by other postings as time passes.

For guidelines on creating and nurturing a sense of safety awareness in your workforce that can reduce the risk of accident or injury (and keep your insurance premiums under control), feel free to get in touch with one of our risk management professionals.