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September 2013

Sep 01
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UNDERGROUND CONSTRUCTION RISKS: THE 811 SOLUTION

By Construction Insurance Bulletin

Across the nation, utility lines, tunnels, and structures run under our feet, Each year, excavators strike approximately 700,000 of these underground lines, often triggering potentially fatal accident (from steam, gas, propane, or electricity). A single strike might easily cost a contractor hundreds of thousands, or millions, if the accident leads to an interruption of service that shuts down a factory, hospital, telecommunication lines– even a missile silo.

In most cases, insurance will not cover these losses. To deal with this threat, the Common Ground Alliance coordinates 811 –Call before You Dig, a nationwide phone and online system that contractors can use to notify local utilities so they can “mark out” their facilities before excavation of anything from to a sewer to a subway. These markouts are required under state law.

When you use the call 811.com system, bear in mind that:

  1. It doesn’t matter where you are – downtown, in the middle of a suburban street, or building a private home.
  2. Call even if you’re confident that you know where something is buried (for example, if you installed the line); many contractors dig up lines that have just put in.
  3. Instead of marking the area with wooden stakes – which are all too easy to drive through gas lines – use white paint or “feathers;” even the most shallow excavation can be hazardous.

Remember, failing to contact 811.com before every excavation violates the law – and leaves you wide open to huge liability losses. Don’t take a chance your odds of losing in the Underground Damage Casino!

To learn more, just get in touch with the Construction Insurance Specialists at our agency.

Sep 01
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CONSTRUCTION SAFETY: MYTH AND REALITY

By Construction Insurance Bulletin

Unfortunately, a number of erroneous beliefs about worksite safety are widespread in the construction industry.

Here are seven common safety myths – and why they don’t pass the reality check:

  1. Safety programs ensure worker safety. In practice, this means that binders on a variety of topics (usually regurgitated OSHA standards) end up gathering dust on a back shelf.
  2. Safety is common sense. Taking risk is a very personal matter. Some people skydive, others bungee jump; some race automobiles, others rock climb.
  3. Incentive programs improve safety. Because these programs usually reward not having a recordable incident, they benefit workers been lucky enough to avoid accidents – not to mention a natural tendency not to report injuries.
  4. Progressive punishment ensures safety compliance. The best punishment can do is achieve temporary compliance. Effective policing must be continuous and consistent, with clear consequences.
  5. Firing noncomplying workers solves safety problems. This is like trying to cure a disease by treating its symptom. Instead, find the error that led to unacceptable behavior and change it.
  6. Safety training is a leading safety indicator. The sign-in sheet shows only who attended the meeting. For training to work, managers need to test what individual workers learned – or didn’t learn.
  7. Inspections and audits will uncover most workplace hazards. Inspections provide snapshots of workplace conditions at a given time, rather than an accurate picture of ongoing operations or activities.

Every construction firm needs to evaluate its safety systems, practices, and procedures critically, challenge the status quo where needed – and take decisive action.

Our agency’s professionals would be happy to offer their advice at any time, free of charge.

Sep 01
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TRIANGULATING FRAUD

By Risk Management Bulletin

Most people who commit fraud at work are not career criminals – and are often trusted staff with no criminal history. According to criminologist Donald Cressey, there are three factors (the “Fraud Triangle”) that lead an ordinary person to fraud: opportunity, pressure, and rationalization.

Take this example: a bartender who splashes a little more scotch into his friends’ drinks when they come into the bar is succumbing to opportunity; his peers’ expectations that he’ll do this create pressure; while telling himself that “everybody does this – and we’re too stingy on our pours, anyway” provides a rationalization.

How can you use this three-legged tool to detect and deter fraud?

You can’t do much with about rationalizing fraudulent misbehavior because everyone does it without announcing their decision in advance.

You can’t learn whether employees might be under financial pressure to commit fraud without investigating their personal finances – which is impractical and illegal. However, you might be able to minimize work-based pressures they face (for example, forbidding managers from ordering them to hit their goals at all costs).

Opportunity provides the most effective leg in the triangle to curb fraud by making it more difficult. Here’s how:

  1. Segregate duties so that no one has sole control over accounting, reconciling, custody of assets, and approval of transactions.
  2. Make sure that transactions which are unusual or involve large amounts have strong managerial oversight and follow-up.

In other words, develop effective control systems so that any larcenous employee will need to be clever enough to avoid several pair of eyes while running a gauntlet of people who reconcile accounts and monitor budget.

If fraud does strike despite these precautions, make sure that you have the right insurance to protect you from loss. For more information, just give us a call.

Sep 01
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PROTECT YOUR BUSINESS WHEN AN EMPLOYEE LEAVES

By Risk Management Bulletin

It’s always difficult to terminate an employee – especially in this age of employment litigation and privacy concerns. Even if a worker leaves voluntarily, you need to make sure that he or she no longer has access to confidential information

The key to making sure that you’ve covered all bases of your bases is to follow a Departure Checklist:

  • When an employee leaves, whether voluntarily or involuntarily, notify all staff immediately to help reduce rumors, hurt feelings, and concerns. Keep the announcement positive.
  • Remove the employee from your facility soon as possible. Offering to have the person stay is nice, but might not always be helpful. If you decide to let the employee stay for the customary two weeks, assign him or her specific tasks to complete. Collect keys immediately and assign someone to work with the departing employee for the duration of their stay.
  • Once the decision has been made, restrict the employee’s access to sensitive company information at once; be sure that this restriction includes any VPN or private access.
  • Have the employee review all items on which he or she is working and write a synopsis of what’s needed to complete each item. Then review these items to create a specific workload transition plan, and assign them to other employees. The sooner you do this, the better.

The more you think through this process before a problem arises, the more effectively you’ll be able to deal with it. We stand ready at any time to help you develop and implement an effective plan that can go a long way to help you protect your business from this risk.

Sep 01
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RISK MANAGEMENT IN THE ‘CLOUD’ CAN BE HAZY

By Risk Management Bulletin

Businesses are transferring more and more client information files online for storage on hard drives in remote data centers or server farms that offer convenient Internet access. Buying space in this “cloud” (a $40 billion a year business, according to the IDC research firm) is becoming as common as paying for power, water and Internet service. With corporate spies after trade secrets, hackers out to steal sensitive financial information, and the federal government demanding online communications records, protecting data in the cloud creates a serious security risk for companies of all sizes.

“It’s easy to overlook security because of the virtual nature of the cloud,” warns Thomas Trappler, Director of Software Licensing at UCLA. “Your data is going over the Internet to another computer and not to some magical world where everything’s going to be fine.” Unfortunately, businesses often seem blissfully unaware of this threat: a recent nationwide study by the Ponemon Institute found that half the firms surveyed had not considered security risks when storing data with providers in the cloud.

A major question in these deals is determining who’s responsible for the risk of compromised data. Because companies often lack security expertise, they expect cloud providers to do the job. Some providers certify that they meet government or third-party standards for data confidentiality. However, few of them let clients test their digital security – which leaves their clients feeling that they might be liable.

To minimize this risk, Trappler advises businesses to:

  1. Evaluate the provider’s reputation.
  2. Insist on reviewing its encryption and security systems.
  3. Set guidelines for immediate notification of any breaches.

You can also protect yourself from the risks of storing data in the cloud by investing in Cyber Insurance. To learn more, just get in touch with us.

Sep 01
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FIVE STEPS TO STAY IN BUSINESS AFTER A DISASTER

By Risk Management Bulletin

Three out of five firms that suffer a major disaster go out of business or are sold. Preparing your business to survive a disastrous event involves a multi-step process: assessment, planning, implementation, testing, and documentation.

  1. Assessment: Brainstorm and list all potential losses. Then rate them on a 1-10 scale, with 10 being the most disastrous and 1 having the least impact on the business.
  2. Planning: Formulate a comprehensive, detailed action plan, using both in-house and outside sources. The plan should include both steps to prevent the loss and remedies to take if the loss occurs. Be as specific as possible.
  3. Implementation: Act on the plan. Determine what steps you must take to now insure a positive outcome if disaster strikes; Who will be accountable for taking these steps when and to whom will they report?
  4. Testing: For example, if you’re planning to deal with a computer crash, data recovery is essential. Test back-up media regularly to ensure that they will be available when needed. All too many businesses lose data due to malware or mechanical breakdown only to find that their backup is either corrupted or unavailable when needed.
  5. Documentation: Put the details of the plan (who, what, when, and where) in writing. Keep one copy in the office, another on the computer, a third off premises – and make sure that every manager knows these locations. Finally, review and update the plan every six months.

Although nothing is foolproof, implementing these five steps can go far to prevent a disastrous loss, or at least, mitigate its impact.

To learn more about developing a disaster plan for your business, feel free to give us a call at any time.

Sep 01
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HELP KEEP TEMPORARY WORKERS SAFE ON THE JOB!

By Workplace Safety

With businesses hiring more temporary workers, the Occupational Safety and Health Administration is encouraging companies to beef up their efforts for keeping contract employee safe on the job.

According to OSHA, at least 14 temporary blue-collar workers died during their first day at a new worksite in the previous 12 months. As a result, OSHA inspectors have begun asking contract employees whether they’ve been trained about safety protocols, such as lockout-tagout procedures. The agency also is working with the American Staffing Association and employers that use temporary staffing agencies on an initiative to protect contract workers.

A number of factors make temporary workers particularly vulnerable. In many cases, there’s a conflict between staffing companies and employers about who should provide safety training. Although employers are required to train all workers in safety procedures, some businesses don’t invest in training contract workers because of uncertainty about how long they’ll stay on the job. Also, while staffing companies are required to provide general safety training for temporary employees, the employers they work for are responsible for training them in their specific job responsibilities.

Unfortunately, employer negligence can also contribute to workplace mishaps involving contract employees. Some businesses hire and train temporary workers to do one job, and then later assign them to perform dangerous work for which they’re untrained, believing that any injuries will increase the staffing company’s Workers Compensation experience modification factor without affecting the employer’s Comp costs.

According to safety experts, if you use contract workers, the best way to protect them on the job is simple: Provide them with the same training and workplace practices as you would for your own employees!

Sounds like sound advice.

For more information, just give us a call.

Sep 01
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SAFETY VIOLATIONS – A MATTER OF DISCIPLINE

By Workplace Safety

If you think that workplace safety and discipline are incompatible, think again.

Although discipline is essential for safety, many employers just aren’t imposing it. For example, a study by the Fisher & Phillips labor law firm found that 56% of large general contractors were unsatisfied with how often supervisors disciplined employees for unsafe actions.

This can create problems for several reasons. Without a record of disciplinary action, you might not be able to demonstrate to OSHA that you’re operating an effective safety program. Failure to discipline safety violations also makes it harder to use the “unpreventable employee misconduct/isolated incident” defense, which argues that an employee acted unsafely, despite your efforts to run an effective program.

Some supervisors fail to discipline unsafe workplace behavior because they fear that imposing discipline will cause trouble for the employer. Others only penalize unsafe behaviors that lead to accidents or injuries, but turn a blind eye to ‘minor violations of safety rules. The Fisher & Phillips survey also found that most companies make little effort to train supervisors on when and how to discipline employees.

The bottom line: disciplining workers for safety violations has a “pro-employee” purpose and should play a key role in keeping your workplace safe by:

  • Removing poor performers
  • Creating limits for employees
  • Improving morale when employees see that management recognizes safe and unsafe behavior
  • Limiting potential negligent retention and negligent supervision claims
  • Providing the accountability that’s essential for an effective safety program
  • Avoiding the appearance of discrimination and unfairness when applied consistently
  • Reducing your Workers Compensation premiums

What’s not to like?

Sep 01
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AVOID THESE SAFETY COMMITTEE PITFALLS

By Workplace Safety

Your safety committee plays an essential role in keeping your workplace safe. However, all too many business undercut the effectiveness of their committees by making these mistakes:

  • Unclear roles. Have a written agreement that the committee meets regulatory requirements and communicates with all employees about its activities.
  • Inadequate budget. Invest in financial resources for member training, safety and health fairs, and other activities.
  • Unwieldy size. Structure the committee based on the size of your business and the hazards workers face. Keep it relatively small so that members can participate actively. If needed, set up subcommittees for special projects.
  • Failure to orient new members. Because newcomers might be unaware of group dynamics and past issues, the committee should bring them up to speed by providing minutes and other documents. If possible, have departing members orient newbies.
  • Lack of follow-up. Committees rise and fall depending on their reputation for doing what they say they’ll do. Leaders should request status reports and review assignments at the end of the meeting to keep everyone on the same page. Many committee agendas list both the topic and the person responsible for implementing it.
  • Lackluster participation. The best members are active, involved participants who eagerly share their passion for safety with their co-workers. Leaders should find ways to get all members fully involved representing their department or work group.
  • Same old, same old. Committees must innovate to maintain interest and involvement. Encourage leaders to learn about successful committees at other businesses and borrow good ideas. Canvass all employees to make sure their good ideas are getting through.

To learn more about making your safety committee as effective as possible, feel free to get in touch with our agency at any time.

Sep 01
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DON’T LET SLIPS AND FALLS TRIP UP YOUR WORKERS COMP PROGRAM!

By Workplace Safety

The bad news: slips, trips, and falls are one of the nation’s leading causes of workplace injuries. The good news: working with safety professionals can help prevent these accidents – and keep your Workers Compensation costs under control.

Falls on the same level (in which workers slip and fall on the surface on which they’re standing) cost Workers Comp insurance companies a hefty $8.61 billion in 2010, accounting for 16.9% of their total claims. That’s the word from Wayne Maynard, Manager of Technical Services and Product Development for the Loss Control Advisory Services unit of Liberty Mutual, the largest Comp carrier in the nation.

According to the Liberty Mutual 2012 Workplace Safety Index, “bodily reaction” injuries – which includes those caused by slipping or tripping without falling – represented $5.78 billion of Comp costs in 2010, or 11.4% of the overall burden,. Falls to a lower level in that year accounted for another $5.12 billion, or 10% of claims.

These costs are rising, due in part to an aging workforce (older worker tend to have more balance problems). Falls on the same level increased 42.3% from 1998 to 2010, while bodily reaction injuries increased 17.6% during this period.

You can help reduce the frequency of slips, trips, and falls by taking such ergonomic enhancements in the workplace as 1) adding slip-resistant flooring; 2) eliminating raised surfaces that might cause tripping; and 3) installing handrails on stairs. Also make sure that your employees take immediate steps to clean up spills that could create slippery floors.

Our agency’s professionals would be happy to provide a complimentary “slip, trip, and fall” safety review of your premises – just give us a call.

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