Revolutionizing the Organization
Claims to cover wage losses for disciplined union transportation workers were ramping up, and LECMPA’s reserves were dwindling — from $10 million to about $5.5 million.
“The trend was so dire, I was concerned we would run out of money,” said Susan Tukel, president of the nonprofit Locomotive Engineers and Conductors Mutual Protective Association (LECMPA).
Adding to the troubles, Union Pacific, employer of the majority of LECMPA members, had increased its discipline for safety violations from about five days’ suspension to a minimum of 180 days.
A more thorough risk management approach was needed, and Tukel’s approach revolutionized her industry.
“She brought an awful lot of foresight to bear to position a 100-year-old organization for the long-term,” said Rod Bloedow, a trustee of the organization. “Susan is clearly a terrific leader.”
LECMPA not only had to increase prices, but Tukel decided it had to begin differentiating its coverage based on frequency and severity of claims as well as by job function. At the time, LECMPA had no writing groups and all members paid the same premium.
The riskiest workers — conductors, engineers, dispatchers and crew callers — would be offered newly created Group A coverage. It was more costly and provided expansive coverage for disciplinary days. Group A workers also had the option to purchase a lower cost policy that would provide fewer benefits.
Newly created Group B policies would be offered to railroad workers with less risk of discipline, those in communications and signals, and maintenance.
About 75 percent of the members fell into Group A, and the decision wasn’t popular. It also wasn’t popular with the nonprofit’s salespeople, who feared decreased commissions.
“It was very controversial,” Tukel said. “We lost about 5,000 members. It was very scary. I probably didn’t sleep the entire year. Everybody was angry with me.
“But the next year, we operated at a profit. We had fewer members but we operated more profitability. Bigger isn’t always better. I learned that that year.”
“It was very scary. I probably didn’t sleep the entire year. Everybody was angry with me.” — Susan Tukel, president, Locomotive Engineers and Conductors Mutual Protective Association
And later that year, some of those 5,000 members who left for a competitor asked to return when the competitor raised its prices.
They were surprised when LECMPA turned them down, Tukel said.
“We decided to use this as an opportunity to do some housecleaning,” she said. “We had paid some big claims, $70,000, $80,000 claims, and then they left. And then they wanted to come back.”
Since then, she has reached out to transportation and logistics union workers to expand membership, introduced a loyalty program for retiring members, and enhanced both Group A and Group B benefits at either the same or lower price due to improved underwriting.
“She’s done an excellent job for her clients,” said David Duthie, chair, Vistage Michigan, a peer-to-peer business organization that honored Tukel with a “Soaring Eagle” award in 2015.
“She’s taken that nonprofit organization from not being as well financed as it should be to being comfortably financed as far as reserves and a growing client base and coming up with a variety of new products,” he said.
At its high point, LECMPA had 32,500 members. After seeing the huge loss of members, it now has 30,200. And its reserves are about $53 million. &
Asleep at the Wheel
Drowsy driving can be just as deadly as drunk driving — and the transportation industry is taking steps to combat this sometimes tragic problem.
The National Highway Traffic Safety Administration estimates that 83,000 crashes each year are caused by driver drowsiness. Motor carriers, transportation companies and organizations with their own fleets are acutely aware of the tragedies that driver fatigue can cause, as well as the major financial and other losses that can result.
Even if a driver is not at fault in a crash that results in serious injuries or fatalities, ultimately the company’s reputation is at stake, said Michael Nischan, vice president, transportation and logistics risk control at EPIC Insurance Brokers and Consultants in Atlanta.
The company may be ordered to pay for damages, especially if management did not properly vet the driver for a sleep disorder or if the driver’s medical certificate was expired.
“Damages from civil suits may not be covered by insurance, so whether the driver is at fault or not, the costly settlements may ultimately cause a company to go out of business,” Nischan said. “The key is to ensure the driver is qualified before hire and throughout employment, and that requires continuing dialogue and education throughout the organization.”
Rates on the Rise
Crashes involving driver fatigue have also impacted commercial insurance for fleets. Craig Dancer, Marsh’s U.S. transportation industry practice leader in Washington, D.C., said that rates in the insurance market had been soft when carriers were trying to get business and build volume, and underwriting, in some instances, may have been lax.
“So now we’re seeing premiums rise to support the carriers’ level of losses, and some markets have exited the trucking industry,” Dancer said.
Underwriters wanting to write best-in-class are now looking to see whether organizations are using technology to make sure their drivers are performing optimally, he said. Underwriters are also looking to see if organizations are going down the regulatory checklist on how to deal with sleep apnea.
“The proactive motor carriers and transportation drivers have been addressing sleep apnea for a while now, and they have become really good at vetting drivers and adhering to fatigue management programs,” Dancer said.
Companies are conducting sleep studies and buying CPAP machines for drivers diagnosed with sleep apnea, which can have a huge impact on driver fatigue, said Todd Reiser, vice president and producer with Lockton’s transportation practice in Kansas City, Mo.
“A lot of motor carriers are trying to improve driver wellness, which correlates directly with driver fatigue,” Reiser said. “Truck driving is a sedentary job, and drivers tend to struggle with their health, whether it’s from occupational accidents or weight problems.”
The industry has also encouraged truck stops to provide healthier food alternatives, and trucking companies are implementing these alternatives at their own terminals, as well as exercise facilities, workout rooms, and nurses or physicians onsite to provide check-ups, he said.
Large trucking companies have terminals throughout the country in areas where they have a high concentration of business. Underwriters respond favorably to these types of programs.
Technology Use Increases Safety
Underwriters are also looking for anything from a technology perspective to make drivers safer, such as warning systems if a truck crosses the center line or drives onto the shoulder of the road, Reiser said. There is also collision mitigation technology that will stop or slow vehicles before a crash.
Advanced technologies can help identify tired, drowsy or distracted drivers. Canadian-based Fatigue Science makes biometric wristbands that drivers wear, said Rich Bleser, fleet safety specialty practice leader for Marsh Risk Consulting in Milwaukee.
Australian-based Seeing Machines builds dash-mounted sensors with image-processing technology that tracks the movements of a driver’s eye, face, head and facial expressions to detect driver fatigue — and even distraction from doing things like texting.
Seeing Machines also provides in-cab driver alerts to prevent accidents, and 24/7 monitoring and data analytics so employers can improve practices.
The National Safety Council recommends drivers stop every 100 miles and walk around, Bleser said. Keep vehicle temperature cooler and drink ice water, because when the core body temperature is lower, the body’s “internal furnace” kicks in and builds energy to stay alert.
“If drivers are tired, they should not drink caffeine, because even if it makes a person feel that they are awake, caffeine can’t control micro sleep,” he said. “I recommend taking a 10- to 15-minute cat nap, if the driver can find a safe place to park their vehicle.”
Jenn Guerrini, executive commercial auto specialist at Chubb Transportation Liability in Whitehouse Station, N.J., said that driver fatigue can also be a problem for ridesharing companies, as they are not regulated like taxi cab drivers.
“For most of the drivers, this is their second or third job, and there is no regulation on hours of work and fitness of duty,” Guerrini said.
She said some organizations forbid employees to use ridesharing services from 1 a.m. to 4 a.m. while traveling.
For organizations with their own commercial fleets, they should track driving hours automatically in real-time by installing electronic logging devices registered and certified by the Federal Motor Carrier Safety Administration, she said. Such devices will be mandated by the end of 2017.
Companies should also develop best practices for dispatchers, said Chris Reardon, vice president of transportation, warehousing and logistics practice at Assurance in Schaumburg, Ill.
“People are going to seek to put the fault on the motor carrier as well as the driver, but companies should be managing this issue at the dispatcher level as well because often, that is where hours of service issues originate,” Reardon said.
“Poor dispatching and load planning can lead to drivers feeling pressure from the dispatchers and management to get the trip done, regardless of the time constraints.”
He reminds clients of the widespread public scrutiny and even condemnation that could occur after crashes involving driver fatigue, citing comedian Tracy Morgan, who was hit by a Walmart driver who had been awake for more than 28 hours in 2014.
“There are always going to be drivers who don’t care about regulations, because they want to make the most money running the most miles,” Reardon said. “If the management of a company does not establish a culture of safety and compliance in the office or terminal, it will inevitably trickle down to the drivers as a result.” &
Your Workers’ Safety May Be at Risk, But Can You See the Threat?
Deadly violence at work is covered extensively by the media. We all know the stories.
Last year, ex-reporter Bryce Williams shot and killed two former colleagues while they conducted a live interview at a mall in Virginia. In February of this year, Cedric Larry Ford opened fire, killing three and injuring 12 at a Kansas lawn mower manufacturing company where he worked. Also in 2015, 14 people died and 22 were wounded by Syed Farook, a San Bernardino, California county health worker, and his wife, who had terroristic motives.
Active shooter scenarios, however, are just the tip of the iceberg when it comes to violence at work.
“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees,” said Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA. “We just don’t hear about them.”
According to statistics compiled by the FBI, the chance that any business will experience an active shooter scenario is about 1 in 457,000, and the chance of death or injury by an active shooter at work is about 1 in 1.6 million.
The fact that deadly attacks — which are relatively rare — get the most media attention may lead employers to underestimate the risk and dismiss the issue of workplace violence as media hype. But any act that threatens the physical or psychological safety of an employee or that causes damage to business property or operations is serious and should not be taken lightly.
“One of the core responsibilities that any organization must fulfill is keeping employees safe, and honoring that duty is becoming more challenging than ever,” Spunberg said.
“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees. We just don’t hear about them.”
— Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA
Desk Rage and Bullying: The Many Forms of Workplace Violence
Bullying, intimidation, and verbal abuse all have the potential to escalate into confrontations and a physical assault or damage to personal property. These violent acts don’t necessarily have to be perpetrated by a fellow employee; they could come from a friend, family member or even a complete stranger who wants to target a business or any of its workers.
Take for example the man who killed three workers at a Colorado Spring Planned Parenthood in April. He had no affiliation with the organization or any of its employees, but targeted the clinic out of his own sense of religious duty.
Companies are not required to report incidents of violence and many employees shy away from reporting warning signs or suspicious behavior because they don’t want to worsen a situation by inviting retaliation. It’s easy, after all, to attribute the occasional surly attitude to typical work-related stress, or an office argument to simple personality differences that are bound to emerge occasionally.
Sometimes, however, these are symptoms of “desk rage.”
According to a study by the Yale School of Management, nearly one quarter of the population feels at least somewhat angry at work most of the time; a condition they termed “chronic anger syndrome.” That anger can result from clashes with fellow coworkers, from the stress of heavy workloads, or it can overflow from family or financial problems at home.
Failure to recognize this anger as a harbinger of violence is one key reason organizations fail to prevent its escalation into full-blown attacks. Bryce Williams, for example, had a well-documented track record of volatile and aggressive behavior and had already been terminated for making coworkers uncomfortable. As he was escorted from the news station from which he was terminated, he reportedly threatened the station with retaliation.
Solving Inertia, Spurring Action
Many organizations lack the comprehensive training to teach employees and supervisors to recognize these warning signs and act on them.
“The most critical gap in any kind of workplace violence preparedness program is supervisory inertia, when people in positions of authority fail to act because they are scared of being wrong, don’t want to invade someone’s privacy, or fear for their own safety,” Spunberg said.
Failing to act can have serious consequences. Loss of life, injury, psychological harm, property damage, loss of productivity and business interruption can all result from acts of violence. The financial consequences can be significant. In the case of the San Bernardino shootings, for example, at least two claims were made against the county that employed the shooter seeking $58 million and $200 million.
Although all business owners have a workplace violence exposure, 70 percent of organizations have no plans in place to avoid or mitigate workplace violence incidents and no insurance coverage, according to the National Institute for Occupational Safety & Health.
“Most companies are vastly underprepared,” Spunberg said. “They don’t know what to do about it.”
Small- to medium-sized organizations in particular lack the resources to develop risk mitigation plans.
“They typically lack a risk management department or a security department,” Spunberg said. “They don’t have the internal structure that dictates who supervisors should report a problem to.”
With its workplace violence insurance solution, Hiscox aims to educate companies about the risk and provide a solution to help bridge the gap.
“The goal of this insurance product is not so much to make the organization whole again after an incident — which is the usual function of insurance — but to prevent the incident in the first place,” Spunberg said.
Hiscox’s partnership with Control Risks – a global leader in security risk management – provides clients with a 24/7 resource. The consultants can provide advice, come on-site to do their own assessment, and assist in defusing a situation before it escalates. Spunberg said that any carrier providing a workplace violence policy should be able to help mitigate the risk, not just provide coverage in response to the resultant damage.
“We urge our clients to call them at any time to report anything that seems out of ordinary, no matter how small. If they don’t know how to handle a situation, expertise is only a phone call away,” Spunberg said.
The Hiscox Workplace Violence coverage pays for the services of Control Risks and includes some indemnity for bodily injury as well as some supplemental coverage for business interruption, medical assistance and counseling. Subvention funds are also available to assist organizations in the proactive management of their workplace violence prevention program.
“Coverage matters, but more importantly we need employees and supervisors to act,” Spunberg said. “The consequences of doing nothing are too severe.”
To learn more about Hiscox’s coverage for small-to-medium sized businesses, visit http://www.hiscoxbroker.com/.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Hiscox USA. The editorial staff of Risk & Insurance had no role in its preparation.