RiskProNet News

 

2018 Trends: Standing Desks, Chatbots + More

Standing desks, healthful snacks and a focus on overall well-being are among the wellness trends for 2018. Here’s what members of the Wellness Practice Group are seeing:

  • An interest in turning wellness programs into a profit center.
  • We’re seeing a shift from wellness to overall well-being. We’re focusing on more than weight loss and cessation of tobacco use.
  • Are people getting enough sleep, for example? Sleep deprivation can affect both productivity and health. Flexible hours can help people accommodate their personal sleeping schedules.
  • Artificial intelligence software and chatbots can make wellness information available 24/7.
  • Vending machines offering healthful snacks are popular. Employees can use payroll deduction or credit cards to purchase snacks.
  • We’re trying to get away from the stigma attached to mental health programs. We want to discuss what people need to bring to the workplace to be successful and productive
  • One practice group member is using Real Appeal weight loss program, although there is a concern as to whether some of the programs are too elementary.

Standing desks are believed to promote health. However, additional space for the large desks is an issue.

 

1st Responder Contracts Can Be Critical in Pollution Claims

A contractual relationship with a first-responder is critical in a pollution claim, according to Brad Maurer, J.D., C.P.C.U., at American Risk Management Resources, a wholesaler specializing in environmental liability,

“Charges by first responders can mount up quickly unless you have a contract that provides 24/7 response with agreed-upon rates,” Maurer told the Claims Practice Group at s recent teleconference.

Here is some of his advice on pollution claims, as well as comments from practice group members.

In the case of a product spill, focus on the recovery of the product. As an example, consider a leak from an above-ground storage tank for diesel fuel. If the fuel goes outside of the containment area, it is prudent to sample the soil to be determine whether mitigation is required.

Suppose the spilled fuel soaks cardboard boxes at a nearby manufacturing plant. This can be considered physical damage to the cardboard boxes rather than a toxic effect.

Reporting Guidelines

Reporting a situation is critical for two reasons.

  • First, it is a legal obligation and failure to do so can result in fines and penalties for the insured. Different states and government agencies have different thresholds for what needs to be reported. Make certain the loss control and claims people are notified promptly.
  • Second, you want to understand your total obligation for cleanup. If it is significant, most policyholders prefer to have an environmental consultant in charge of interaction with first responders. Again, this is when a contract is important.

Avoid speculation. Be factual, describing water from a burst pipe or soot from a fire. However, don’t speculate on whether contaminants may be present in the water or soot.

Reporting claims quickly also can help mitigate additional claims. For example, a senior housing facility had significant water damage. It was important to alert the environmental carrier promptly because of the possibility of mold, potentially affecting residents’ health.

When an incident occurs, document the response and take samples.

Cautionary Reminders

  • After Hurricane Harvey, flooding disabled the refrigeration system at the Arkema plant that manufactured organic peroxide. The resulting explosions and wastewater tank overflows contaminated surrounding properties, resulting in lawsuits from first responders and neighbors plus OSHA fines of $91,724.
  • Remember that a fresh water loss can turn into a Category 3 water loss if the water is not cleaned up within three days. Category 3 water is contaminated with pollutants, including fungi and bacteria, and coverage is excluded from most property and liability insurance policies.

Checking Coverage

A challenge is that environmental insurance policies are not standard. Check them carefully.

  • Some policies cover crisis management services, including having a public relations firm interact with the public and media.
  • Business interruption coverage can be included in an environmental policy.

Brad can be reached at (608) 824-3347 (office), (608) 345-7641 (cell) or Maurer@armr.net.

 

 

Knowing What to Ask For in Cyber Liability Insurance

Changing verbiage and changing cyber liability coverage standards are among today’s challenges, members of the newly formed Cyber Liability Practice Group agreed at their first teleconference.

“Different carriers have different names for the same coverage. We’re struggling with how to explain it. Instead of using the carrier’s verbiage when we talk to a client, we generalize it and add a disclaimer that there may be different terminology. We’ve had more success in presenting it this way,” one member said.

Another Practice Group member took a different view. “We prefer to go agreement by agreement and explain what each section covers.”

Most practice group members work with two to five carriers, with Travelers, Hanover and The Hartford being among the most popular.

If you are considering a new carrier, one member stressed, ask about its training and track record in breach response. “It’s hard to demonstrate that on a policy form, but the value of good breach response is immense. We should highlight the carrier’s record when we are selling cyber liability coverage.”

Most carriers are willing to make changes or additions to forms upon request. “The problem is knowing what to ask for,” one person said.

Court Cases

  • A recent high-profile case involved New York-Presbyterian Hospital, which allowed unauthorized filming of two patients for a television series. The hospital previously was fined $3.3 million after health information was placed on a shared date network accessible on the Internet.
  • The decision in Carpenter v. United States, in which the Supreme Court heard oral arguments last month, is expected to have a major impact on privacy laws. The specific issue here is whether a law enforcement agency can obtain cell phone records showing a caller’s location without a warrant.

The Cyber Liability Practice Group meets on the third Tuesday of the month at 8:00 AM Pacific time (11:00 AM Eastern).

 

Coping with Depression, No. 1 Cause of Disability

Although depression is the No. 1 cause of illness and disability, workers are too often fearful of seeking help from employee-sponsored programs. More education is needed to remove the stigma attached to mental illness, members of the Wellness Practice Group agreed at their recent teleconference.

“We focus on prevention with diseases such as cancer and diabetes,” one person said. “Why are we waiting until people are on the edge with mental illness?”

One client offers “points” for contacting the Employee Assistance Program. “Lunch and Learn” sessions, stressing that EAPs can assist with issues ranging from elder care to legal matters, are helpful in removing the reluctance to contact the program.

“I contacted our EAP when my father was in hospice,” one person said. “I got a box full of useful material and I took it to work so my colleagues could see what was available to us for free.”

Among the resources mentioned are the following:

 

Expect Higher Penalties, New Safety Program Requirements from OSHA

Penalties for OSHA violations are expected to increase again – on top of an increase of approximately 78 percent that went into effect on Aug. 1, 2016. The penalty for “willful” repeat violations, for example, increased from a maximum of $70,000 to $124,709.

Milwaukee attorney Eric Hobbs, of Ogletree, Deakins, Nash, Smoak & Stewart, P.C., talked to the RPNI Loss Control Practice Group about current issues in OSHA regulations, including the new electronic injury reporting/recordkeeping rule and anti-retaliation provisions. Hobbs is part of the workplace safety employment group of the firm, which specializes in labor law.

OSHA has taken the position, he said, that automatic post-incident drug testing deters employees from reporting injuries. As a result, employers may not use drug testing or the threat of drug testing as a form of adverse action against employees who report injuries. Blanket post-incident drug test is prohibited.

Although blanket drug-testing is prohibited, testing is appropriate if there is a reasonable suspicion that drug use may be involved. The challenge is to explain why drug-testing did not take before an accident if the employer had a reasonable suspicion of drug use.

Consider Effectiveness of Safety Incentives

Safety incentive programs also are a concern. OSHA states that if programs are “not structured carefully, they have the potential to discourage reporting of work-related injuries and illnesses without improving workplace safety.”

For example, monetary bonuses, gift cards or perks for accident-free periods may deter a reasonable employee from reporting a work-related injury or illness. A better approach is to find incentives to promote participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents and “near misses.”

Requirements for electronic reporting of injuries and illnesses are being phased in this year.

“Not Dead and Not Going to Be”

Despite the changes in the federal administration, OSHA “is not dead and it is not going to be dead,” Hobbs said. “We want regulations both because we are care and because we don’t want other companies to have a competitive advantage by saving money from failing to protect workers’ safety and health. It is both a legal matter and a moral matter.”

Another current concern, he added, is expected new rules on silica, which is “everywhere from soft drinks to road-building operations.”

What should employers do?

  1. Prepare to file reports by Dec. 2.
  2. Review post-accident drug testing policies, but don’t necessarily overhaul them.
  3. Review safety incentive programs.
  4. Don’t overreact.

Hobbs can be reached at (414) 239-6414 or eric.hobbs@ogletree.com.

The program was arranged by Loss Control Practice Group Co-Chair Theresa Focardi of SullivanCurtisMonroe. The other co-chair is Rich DeLeau of BHS.

 

Wellness Includes Financial Well-Being

Financial well-being should be a part of wellness programs, participants in RiskProNet’s Wellness Practice Group agreed at a recent teleconference.

In terms of specific financial well-being programs, members have had good experiences with representatives of MetLife and Prudential, who will speak without a fee and were informative without being “salesy.” Comment: “Our representative simply passed around a sheet and asked people to sign up if they wanted a free consultation.”

Participation has been good, with no one expressing concern that attending the presentation might be seen as evidence that they are having financial troubles. “We always tell employees we hope they will come and take one positive thing away. We offer a free lunch.”

“We look at hitting all generations,” one person said. “We have young people with college debts, families with young children, families coping with college expenses and older employees who have insufficient funds for retirement after raising children.”

Physical Wellness Programs

Here are some of the comments on more traditional wellness programs.

“Fitbit’s corporate programs cost in the range of $10,000 annually and appear to be designed for really large groups. We are looking at pooling our clients to see if we can offer Fibit programs that way. Right now we create a private group within the online Fitbit community.”

“We work with nonprofits and retirement homes with many minimum wage employees. We purchased 100 Fitbits and loan them to their employees, asking them to sign a statement that they will pay for them if they lose them.”

“Free flu shots can be a draw to get employees to attend health fairs.”

“Be sure you are partnering with quality vendors. The most popular vendors are those who offer screenings, such as foot examinations. Be certain that providers at health fairs are in the network of the insurance plans offered.”

Planning a health fair can be time-consuming. Third-party vendors charge from $500 to $1,200, RiskProNet members reported.

Should the insurance broker pay for a health fair or will clients pay the bill? “We usually pay for it as an added value to our clients,” one person said.

 

Cyber Liability Practice Group

RiskProNet has formed a Cyber Liability Practice Group. There is a growing need for this coverage even including small and medium size businesses, an area that represents significant opportunity, with one source estimating that less than a third of U.S. businesses are insured against cyber threats.

The first meeting will be Friday, Dec. 15, at 8 a.m. Pacific time. The group’s chair is Brendan Rooney, who specializes in cyber liability at AHT.

Topics under consideration include these:

  1. Preferred markets of the group
  2. Rise in third-party liability claims and regulatory claims for clients
  3. Amendatory endorsements for preferred cyber carriers
  4. Group program development

If you are interested in suggesting topics, please use the Slack channel.

 

Value-Added Claims Service

RiskProNet members view claims assistance as a value-added service, members of  the Claims Managers Practice Group agreed at a recent teleconference. Selected comments follow:

“On larger accounts we may bundle a package of services for loss control and claims analysis and oversight.”

“We provide full audit service, as well as a review of best practices. When we are courting a prospect, we sometimes will do a best practices review in order to demonstrate our expertise.”

“We work with producers to set up a list of services offered which is mostly based on the size of the account.”

“Our IT department has a paperless database and can create a report that captures all the work that has been done on an account. For example, the report can include the number of endorsements and invoices processed, as well as the claims opened and closed.”

“A common issue is when a client is involved in an auto accident or other situation but is not at fault. We may need to suggest that the insured have it adjusted by his or her first-party carrier and let the carrier go to the trouble of pursuing subrogation. We try to give our clients options and guidance.”

Special Value-Added Services

“We have a large landlord and we offer to review his leases with clients. We always put in a caveat that we are not attorneys and that their attorneys should review our suggestions.”

“We have a construction defect specialist on staff who will review the contracts on any construction projects our clients are planning. Again, we make recommendations for them to take to their attorneys for review.”

A future teleconference will look at recent legislation and court decisions on insurance issues.

 

Claims Managers Discuss Outsourcing

RiskProNet members have been satisfactorily outsourcing tasks ranging from front-end reporting to compiling quarterly reports to ReSourcePro, Claims Practice Group members agreed at their recent teleconference.

These were among the comments at the teleconference, which also looked at whether and when agencies should charge for claims services. We’ll discuss this topic in another post.

On ReSourcePro:

  • “We use ReSourcePro for claims services back-end work, checking certificates and policies and benefits.”
  • “In personal lines, they help with online quoting, sending out company news, claims information retrieval and insurance scheduling.”
  • “They compile quarterly reports for our clients and also check on the status of claims.”
  • “ReSourcePro processed 498 status reports for us last year.”
  • “Commercial lines uses them for policy-checking, online retrieval, selected one-time projects, and follow-up on endorsements and pending policies.”
  • “We like the fact that they are always reviewing work they are doing for us to see if it can be streamlined.”
  • “We previously were backlogged on policy-checking. Now we can send policies out within 30 days of receipt.”
  • “We’ve set up an email address with our company name. Inquiries go to ReSourcePro as well as two of our internal addresses. They start working about 4:30 a.m. our time and process any pending claims. It’s smooth and seamless.”

 

How to Achieve Personal Lines Revenue Goals

Step-by-step processes for determining how many new clients are needed to maintain or increase revenue were shared by members of the Personal Lines Practice Group at this month’s teleconference.

Practice Group Chair George Pester of JKJ outlined questions to consider:

Step 1. What was last year’s revenue?

  • Determine last year’s revenue. Then apply your historical retention rate with any adjustments based on current conditions either positive or negative.
  • Make an assumption on rate and exposure base increases.
  • Determine your revenue goals.
  • Calculate the difference between the anticipated revenue and revenue goals.

Step 2. Set your monthly goals

  • Determine the total written premium and average commission needed to close the gap in your revenue goal.
  • Divide the goal by the average account premium to determine the number of new accounts needed.
  • Determine that number by 12 to find the number of new accounts needed each month.

Define Ideal Client

It’s helpful to sit down with the team to determine the ideal client, Pester said. His ideal client meets the following description:

  • Client Goals: Wants appropriate coverage at a fair premium. Wants a collaborative, consultative relationship. Not a transactional purchaser of products and services. Values a personal relationship with insurance representatives at all times.
  • Personal Challenges/Concerns: Protecting wealth accumulated over a lifetime. Valuing good service even if due to a bad claims experience because she was with the wrong insurance company. Coverage meets exposures. Risk management services. Competitive premium.
  • Demographic:
    • Established in job and career.
    • Average or above income.
    • Understands the need and value of insurance.
    • Habitation: Home, condo, co-op owner. Possibly has vacation home and “toys” such as sports cars or boats.
    • Location: Stable or growing community.
    • Story: Married with children. Active board member or involvement with community. Volunteering and giving back to her local community is important.

Talking to carriers about achieving mutual goals for the coming year also is important. Some carriers, however, expect a minimum amount of premium and no longer offer bonuses for exceeding goals. “Some expect growth rates from us that they aren’t even achieving themselves.”

Another agency looks at the attrition rate in three-year cycles, as well as each producer’s projected new business. “We plan for achieving 75 percent of the goal to be cautious.”

Identify At-Risk Accounts

One agency asks producers to identify the 20 accounts that are most likely to be in jeopardy, and discuss how to preserve them. A typical issue is clients who are moving into assisted living. “We make every effort to explain that we can continue serving them almost anywhere in the country.”

Direct Writers

If competition with direct writers is an issue, be sure to review coverage for uninsured and under-insured motorists. This is an area where large claims occur, and direct writers are usually not competitive or as good as assessing the needs.

Agency Structure

It helps to have a person dedicated to new business. Some agencies have found it is easier to train a college recruit with no knowledge than to train someone with limited insurance knowledge and who may find it hard to overcome outdated habits.

 

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