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Risk Insider: Marilyn Rivers

Workplace Safety Requires Consensus

By: | October 16, 2014 • 2 min read
Marilyn Rivers is director of risk and safety for the City of Saratoga Springs, a historic tourist destination in upstate New York. She chairs the PRIMA Institute for the Public Risk Management Association and was named Public Risk Manager of the Year by PRIMA in 2007. She can be reached at marilyn.rivers@saratoga-springs.org.

Each of us brings a personal perception of reality to our definitions of how safe our workplaces are.

Here’s the challenge we all face in making workplaces safe across the country. Place a group of folks in a room and ask them to put together a plan and protocols to make it safe. Ask them to reach consensus on locking down their workplace.

For those of us who have tried to walk our contemporaries through the process, it can be mind-numbing, especially when working in the public sector.

According to the latest Bureau of Labor Statistics, workers in local government have a higher incidence rate of nonfatal occupational injuries and illnesses (6.1 cases per 100 workers) than any other type of industry sector.

Public workspaces are designed for the community, the employees who provide the services and the folks who come to be served.

The balance between “by the people and for the people” can be treacherous.

These folks come in all shapes and sizes and temperaments. Their issues might be as mundane as a dog license and as complex as a child custody court case. The mix of service on any given day varies according to the weather, the deadline, the season and the crime.

Limiting access to public spaces requires a balance between the safety of the employee and the need for the public to feel there are no barriers to the services they seek.

Safety planning requires common sense and a sense of purpose. Both the public and the employee need to be satisfied that any approach to workplace safety is well-intentioned and does not restrict access to our unalienable right to good government.

Safety — one little word that carries a big message. Placing a barrier between the public and its government often creates suspicion and a cry of limitation or obstruction. Folks want to come face to face with the people whose taxes pay their government salaries.

The balance between “by the people and for the people” can be treacherous.

How safe is your workplace? Look around and measure the complacency of your co-workers.

Listen to the chatter — cameras that record your environment and monitor your safekeeping are construed as Big Brother watching. Gates, window service and counters that prohibit access are obstruction devices. Opponents of metal detectors and bag screenings argue they violate personal freedom and are unnecessarily invasive.

Employees within public spaces, however, will certainly testify that workplace safety measures are needed based upon statistical data, downright scary situations, questionable behavior and outright concern.

The process for establishing safety protocols is a journey best taken with an open mind and a sense of community.

Employees in all types of workplaces have to agree to participate in the protocols established for the good of the whole. If consensus cannot be reached, the results may be fatal.

Be tenacious and push for cooperation in agreeing that safety can be achieved without the perception of violation of privacy.

At the end of the day, each of us as risk managers have one goal — to get our employees home safe and sound to families awaiting their returns.

Read all of Marilyn Rivers’ Risk Insider contributions.

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Risk Insider: Zachary Gifford

13 Rules for Risk Management Success

By: | October 15, 2014 • 2 min read
Zachary Gifford is the Associate Director of Systemwide Risk Management, The California State University. He received a 2014 Risk All Star Award from Risk & Insurance®. He can be reached at zgifford@calstate.edu.

Over my 24-plus years in the insurance, general liability claims and risk management professions, I have learned that the following practices or attributes are critical for success.

With this opportunity, I would like to share with the  readers of Risk & Insurance® the practices and attributes that lead to success when working in a high energy, heavy work-volume environment in our respective organizations.

“Risk management is about people, not money. Money is why we have risk managers; however people are why we strive for excellence. One needs to be cognizant of the uninsurable costs of risk.”

The modern conventional wisdom is that folks need to “do more with less”. Let’s face it, our organizations are either beholden to stockholders, owners or the tax paying citizens of our great country. More than ever the pressures for producing high quality, high volume and cost-effective work product is expected.

The following are some proverbial words-of-wisdom from someone who is the boots on the ground….

  • Be the “get to yes” folks and not the “little dark rain cloud”. Risk management is in the position to assist stakeholders in making informed and sound decisions. Rarely should risk management provide an absolute “no” and if so, then the successful risk manager assists in providing alternative methods to assist in reaching the goal in question. In other words, provide the organization’s stake-holders information enough for them to make an informed decision.
  • Check your ego at the door when you enter the office. It is not about “you”, it is about “us” and “them”.
  • Risk management is about people, not money. Money is why we have risk managers; however people are why we strive for excellence. One needs to be cognizant of the uninsurable costs of risk.
  • Having a positive mental attitude is critical.
  • What would Woodrow Wilson Do? Woodrow Wilson said essentially; “In times of crises a thousand hasty counsels is worth one cool judgment. The goal is to provide light and not heat.”
  • Change is going to happen, embrace it.
  • Be forthright, honest, respectful of others and diplomatic.
  • Use your internal and external resources. Governmental entities do not have to worry about trade secrets or competition and generally public entity risk professionals like to share in their successes and “lessons learned.”
  • Do not reinvent the wheel. In all likelihood someone with institutional knowledge has “been there and done that.”
  • Communicate with stakeholders. They do not like surprises and do not wait to be asked to provide a report or information. Let stakeholders know of your successes and simultaneously help identify where organization success can be maximized or where failure can be mitigated.
  • Be timely and ready to address issues as they occur without losing focus of the horizon.
  • Communicate and collaborate with organizational personnel in developing and supporting a culture of risk management and safety.
  • Battleships turn slowly and sink fast…do not rest on your laurels.

Though the cynic may conclude much of the above is cliché’, it has been my experience that incorporating the above points into how one conducts their risk management endeavors benefits the organization, fosters a positive work environment and provides the foundation for building and/or maintaining a quality risk management enterprise.

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Sponsored: Liberty Mutual Insurance

Construction’s New World

The underwriting of construction risk is undergoing a drastic change, one that may take many years to resolve.
By: | November 3, 2014 • 5 min read

Get off a plane at Logan Airport and cross the harbor toward Boston and you will see construction cranes, a lot of them.

Grab an Amtrak train from Philadelphia into New York and pulling into Penn Station, you will see more construction cranes, many more of them. The same scene repeats in Denver, Los Angeles, San Francisco and Chicago.

All that steel and cable in the skyline signifies a construction industry that is growing again, after having the rug pulled out from under it in the Great Recession of 2008-2010.

The cranes these days look the same as cranes looked in 2008, but the risk management and insurance environment in construction is anything but the same now.

A variety of factors are now in play that have drastically changed construction risk underwriting, according to Doug Cauti, a senior vice president and chief underwriting officer with Boston-based Liberty Mutual’s construction practice.

Doug Cauti characterizes the current construction market.

Talent and Margins

For one thing, according to Cauti, the available talent pool in construction is nowhere near what it was pre-recession.

“When the economy went into its downturn, a lot of talent left the business and hasn’t returned,” Cauti said.

Cauti said recent conversations with large contractors in Ohio and Pennsylvania confirmed once again that contractors are facing a workforce that is either aging or very inexperienced. That leads to safety management and project quality concerns at just the moment in time that construction is rebounding.

Doug identifies one of the top risk management issues facing construction firms today.

Workers compensation risks in construction, already a problematic area, are seeing an impact from that dynamic.

Contractors are also facing much more competition. In the past, contractors might have bid on 10 jobs to get one, now they have to bid on 50 or 60 jobs to get one. That’s putting pressure on margins.

“There are a lot of contractors out there competing for business,” Cauti said.

“Margins are going up but not at the same rate as the industry’s recovery,” he added.

Financing and Risk Transfer

Another factor impacting the way construction risk is being underwritten is the size of projects and the way they are being financed. Construction’s recovery from the recession might be slow and steady, but the size of projects requiring risk management and insurance has increased substantially.

In 2010, there were 85 projects under contract nationally that were worth $1 billion or more, according to Cauti. One year later, the percentage of projects of that value or higher had grown by 30 percent, and the trend continues.

A lot of those projects are design-build, a relatively new approach to construction that Liberty Mutual has grown comfortable underwriting over the years. But design-build is still an additional complication, blurring the traditional lines of responsibility.

SponsoredContent_LM“We did it when the growth in contractor-controlled insurance programs happened, we did it with the evolution in design-build and we’re laying the groundwork to be a thought leader in public-private partnerships and integrated project delivery.”
– Doug Cauti, Chief Underwriting Officer, Liberty Mutual National Insurance Specialty Construction

Given the funding demands of these much larger and more valuable projects — many of them badly needed public sector infrastructure improvements — public-private partnerships, otherwise known as P3s, are now coming into vogue as a financing option.

But deciding how risk should be allocated, underwritten and transferred in this new arrangement between contractors, the state, and private partners is a relatively new and untested science.

As a thought leader in the underwriting of the design-build approach – and the more traditional design-bid-build – Cauti said construction experts within Liberty Mutual are growing their knowledge to stay in step.

“We did it when the growth in contractor-controlled insurance programs happened, we did it with the evolution in design-build and we’re laying the groundwork to be a thought leader in public-private partnerships and integrated project delivery,” he said.

That means attending relevant industry conferences like the annual IRMI Construction Risk Conference where Liberty Mutual has maintained a significant presence, and engaging in dialogues with contractors and government officials, and maintaining clear and active lines of communications with brokers.

Doug discusses emerging approaches to construction.

Legal and Regulatory

Another change that is creating challenges for construction risk underwriting, according to Cauti, stems from what’s happening in United States courtrooms.

Across the country, how a court interprets coverage can vary widely, especially in the area of construction defect.

“In the past, many jurisdictions viewed construction defect simply as shoddy workmanship and they had to go back and redo it,” Cauti said.

But now, on a state by state basis, courts are ruling that a construction defect is an accident under certain circumstances that may be covered by a contractor’s general liability policy.

In 2014 alone, according to Cauti, Supreme Courts in West Virginia, Connecticut and North Dakota ruled that construction defects can sometimes be considered accidents.

Cauti said doing business with a carrier that pursues contract clarity whenever possible – and that possesses an experienced claims team that can navigate the wide variety of state interpretations – is absolutely essential to the buyer.

Having claim teams not only dedicated to construction but also to construction defect, adds a lot of value to a carrier’s offering.

Doug outlines another top risk management issue facing construction firms in today’s booming market.

Now, as never before, contractors are relying on experienced construction insurance teams to help them address these complexities.

Insurers need to have the engineering expertise to analyze a project, to make sure the right contracting team is in place and to insure that risk exposures are being properly assessed. Another key in a construction insurance team, according to Cauti, is the claims department.

A Strategic Approach

The legal and financing changes that are taking place in the construction market, from a risk transfer standpoint, aren’t going to get ironed out overnight.

Cauti said it could be 10 years until the construction and insurance industries fully understand the complications of public-private partnerships and integrated project delivery, these approaches gain traction, and the state-by-state legal decisions that are causing so much uncertainty can be digested.

In the meantime, an engaged, collaborative approach between carriers, brokers, contractors, and their financing partners will be necessary.

Doug discusses how his area can provide value to project owners and contractors.

For more information on how Liberty Mutual Insurance can help assess your construction risk exposure, contact your broker or Doug Cauti at douglas.cauti@libertymutual.com.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.


Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty, workers compensation and group benefits.
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