Passion for Protecting Lives
Each year, the judges of the Teddy Awards diligently evaluate applications based on numerous criteria for success, including performance, innovation, sustainability and teamwork.
But our panel this year was quick to point out that those criteria — while vital — don’t always tell the whole story.
The judges, all professionals in workers’ comp fields and most of them Teddy Award winners themselves, connected on a deeper level to those applications that were rife with the intangible qualities that fuel their own companies’ success: imagination, enthusiasm, energy, and most of all, passion.
It’s passion, fueled by a family legacy in the business, that drives Harder Mechanical Contractors’ Jennifer Massey, corporate director of safety, health and claims management, to ensure that her co-workers’ lives aren’t diminished or cut short like so many in generations past. And it’s the same passion that drives her team to protect every worker as fiercely as they would their own families.
Harder Mechanical just hit 16 million man hours with zero lost-time accidents. Zero. Those results stem from the combination of a comprehensive safety program, combined with an unwavering determination to put every injured teammate back to work immediately, in every circumstance.
It’s passion and imagination that are behind the relentless and savvy marketing campaigns that Excela Health’s Laurie English, senior vice president and chief human resources officer, and her team use to keep staff actively engaged with injury prevention on a daily basis. Campaigns featuring character mascots and catchy mnemonics keep Excela’s injury prevention message at the forefront of employee’s minds at all times.
The 2017 Teddy Award winners had programs that were rife with the intangible qualities of imagination, enthusiasm, energy, and most of all, passion.
The same keen sense of visual safety communication is also evident in the company’s unique color-coded flag system to display vital safety information at a glance, and help prevent disruptions that lead to needle-sticks and other injuries.
It’s also passion — mixed with grit — that allowed Target’s Amanda Lagatta, director of insurance and claims, and her team to maintain a steady downward trend in losses and claims despite losing one-third of the company’s risk management staff.
The company credits its success to its culture of caring, putting the needs of its 341,000 team members first. Target’s advocacy-based workers’ comp assistance center gives injured workers access to skilled and compassionate representatives that offer answers and reassurance throughout their recovery.
And it’s passion for making employees part of the solution that fuels the robust “360-degree” safety and training program employed by Hampton Roads Transit.
Under the guidance of Human Resources Compliance Manager Danielle Hill and her team, employees are fully engaged in safety and workers’ comp from Day 1 on the job. And bus drivers attend eight intensive weeks of training that includes a driving simulator as well as classroom work.
Ongoing training is focused on safety but goes far beyond it, including programs that teach employees to eat healthier, get fit and stay fit. The company is partnering with a physical therapy provider on stretching and exercise training videos designed specifically for bus drivers and maintenance personnel.
Congratulations to all of the winners of the 2016 Teddy Award, sponsored by PMA Companies. They have earned our respect and our admiration for their devotion to their most important asset: their people. &
Read more about the 2016 Teddy Award winners:
Bringing Focus to Broad Challenges: Target brings home a 2016 Teddy Award for serving as an advocate for its workers, pre- and post-injury, across each of its many operations.
The Road to Success: Accountability and collaboration turned Hampton Roads Transit’s legacy workers’ compensation program into a triumph.
Improve the Well-Being of Every Life: Excela Health changed the way it treated injuries and took a proactive approach to safety, drastically reducing workers’ comp claims and costs.
The Family That’s Safe Together: An unwavering commitment to zero lost time is just one way that Harder Mechanical Contractors protects the lives and livelihoods of its workers.
More coverage of the 2016 Teddy Awards:
Recognizing Excellence: The judges of the 2016 Teddy Awards reflect on what they learned, and on the value of awards programs in the workers’ comp space.
Fit for Duty: 2013 Teddy Winner Miami-Dade County Public Schools is managing comorbid risk factors by getting employees excited about healthy living.
Saving Time and Money: Applying Lean Six Sigma to its workers’ comp processes earned Atlantic Health a Teddy Award Honorable Mention.
Caring for the Caregivers: Adventist Health Central Valley Network is achieving stellar results by targeting its toughest challenges.
Advocating for Injured Workers: By helping employees navigate through the workers’ comp system, Cottage Health decreased lost work days by 80 percent.
A Matter of Trust: St. Luke’s workers’ comp program is built upon relationships and a commitment to care for those who care for patients.
Keeping the Results Flowing: R&I recognizes the Metropolitan Water Reclamation District of Greater Chicago for a commonsense approach that’s netting continuous improvement.
An Insatiable Beast
Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.
Part One: Who Kicked the Door In?
Executives with Sweet Life are in a self-congratulatory mode.
Having just plunked down $15 million for a new, just-in-time processing and shipping system, the company leadership feels poised for even greater success.
Starting with a then-unknown Kombucha product, the company grew, selling Kombucha, coconut water and a menu of flavored sparkling water sourced from unquestionably pure springs.
Walk into almost any tony yoga studio along the Atlantic seaboard and you would see some bottle or can with the Sweet Life label on it.
“I want to congratulate everyone involved in this effort,” Saltwood tells his assembled leadership team during a celebratory, well-lubricated meal at one of the best vino-centric restaurants in the Finger Lakes.
Smiles all around, except for Anne Margate, the company’s chief risk officer. Saltwood notices her mood and lifts a wine bottle in her direction as if to offer her more.
She waves the bottle off, and bends her head back down to her BlackBerry, typing feverishly.
Saltwood just shakes his head.
“She worries too much,” he says to himself.
Two days later comes a jolt of reality for Saltwood in the form of a phone call from his CIO.
“We’ve got a breach. Doesn’t look too extensive but we’re moving to identify any lost data and isolate the problem,” the CIO says.
“Alright, keep me posted if you think it’s going to get uglier. I especially want to know if any customer data gets compromised,” Saltwood says.
“Roger, Wilco,” says the CIO.
It’s uglier than either Saltwood or his CIO could possibly know.
What’s hit Sweet Life is a cyber worm that goes by the name of “Purple Moray.” The name of the worm reveals its intent.
The worm carries a payload that is designed to search out and destroy — just like its ravenous sea eel namesake — programmable logic computers that control machine processes, the very thing that Sweet Life just purchased as part of its $15 million manufacturing upgrade.
Purple Moray is also equipped with a rootkit component, making its passage through Sweet Life’s information technology systems virtually impossible to detect. Try as they might, Sweet Life’s IT team feels like it is not seeing the whole picture.
Sweet Life’s CIO picks up the phone and calls a forensics team he knows in Rochester.
“Yep,” says the CEO of the forensics team when he picks up the phone. He’s eating potato chips as he talks.
“Yeah, hi Mark,” says the CIO, who has known the forensics CEO since high school.
“Whatcha’ got?” Mark says, crunching a chip.
“Are you eating?” the CIO says agitatedly.
“I’m hungry. What is it?” Mark says.
The CIO shakes off his irritation.
“We need you to come down here. We’ve had a breach and we’re not sure of the extent of it,” the CIO says.
“We’ll be there this afternoon.”
Part Two: Gut-Wrenching Pain
The CIO initially fails to tell Anne Margate what’s going on. Sweet Life is a bit of an old boy’s club — though all the top brass is under 40 — and Anne is not a member of the club.
But she makes a point of finding out what’s going on within the company regardless. It’s when the Rochester forensics team shows up that she gets wind of what’s happened.
“When were you going to tell me about this?” she asks the CIO.
“I … ,” he manages to get out before she cuts him off.
“We need to tell our insurance broker,” she says. “I’ll send you an invite.”
“Which is more than you did for me,” she says to herself under her breath as she walks away.
“OK to summarize,” the broker says on the call, “we need a full list of any customers affected, then move to notify those customers. And keep the forensic work going.”
“I’ll let the cyber policy carrier and the crime policy carrier know that we might have a claim coming,” the broker says.
The next day the chief of operations comes into work to find that Sweet Life’s spanking new manufacturing system is down, all the way down.
“All the computers are dead, boss,” says one of the line foremen.
Anne Margate, who is now fully engaged in the recovery attempt, barges into the company lunch room.
There she finds Mark, the forensics guy, and two of his teammates settling down to a lunch of pepperoni pizza and a very large meatball sub.
“What’s going on?” she says.
“We’re having lunch,” Mark says.
“I know that, I mean with our manufacturing process,” she says.
Mark pauses to wipe some red sauce off of his chin.
“You’re, who again?” he says.
“I’m the risk manager,” she says, trying to control her anger.
“Oh,” he says. “What’s happened is that your operations have been attacked by a cyber worm. It’s called Purple Moray. It’s disabled the programmable logic computers that control your machine processes,” he says.
“Are they merely disabled or destroyed?” she says.
“We’re getting to that,” says Mark. “As soon as we finish lunch.”
Sweet Life’s broker, exercising an abundance of caution, contacts the company’s property carrier to notify it that Sweet Life may have a claim against this policy as well.
“It looks like the damages are far more extensive than we thought,” Anne Margate says on a call with Saltwood and the company’s property underwriters.
After she gets off the phone with her property underwriters, Anne Margate has the sickening feeling that in the event of the damages caused by a computer worm of this nature, her cyber, crime and property policies might not be all that well aligned.
Part Three: All Gone
“Can anybody in this company tell me what’s going on with this Purple Moray worm?” Josh Saltwood thunders into the phone from his vacation home in the Hamptons.
“All we’ve been able to do is identify it, we can’t stop it,” says the exhausted CIO.
Sweet Life’s situation is weakening day by day.
In addition to disabling or damaging key pieces of manufacturing equipment, the worm, through a second payload, did access and steal customer data; much more data than the company’s IT department initially understood to be taken.
The company has to inform customers, including the largest natural foods retailer in the country, that although it thought it hadn’t lost their data, it turns out they had.
“We know we told you a week ago that your information was OK, but it’s not OK,” the CIO and Margate tell the retailer on yet another painful call.
“This thing is like some kind of insatiable beast,” says Mark, the forensics guy, as he sits at an in-house Sweet Life computer, an open bag of peppermint bark on the desk.
“You want some bark?” he says to Margate, who is sitting beside him trying to learn as much as she can about cyber hack forensics.
“No thanks,” she says.
“I’ve never seen anything like this,” says Mark.
Over time, the forensics team, working in congress with Sweet Life’s IT team, is able to isolate the Purple Moray malware and remediate some of the damage done to the company’s computer-controlled manufacturing system.
Anne Margate, who worries about everything, finds that her concerns about her insurance policies were somewhat unfounded.
The cyber, crime and property policies all respond, although not to the degree that every loss is covered.
The company’s property coverage was inadequate to cover all of the damage done to the company’s new manufacturing system. The uninsured loss there is more than $5 million.
Sweet Life is facing a daunting task as it deals with a bruised image in the marketplace and strained relationships with its once loyal customers.
Now it also has to improve its cyber security and convince its insurers that it is a good risk going forward. When Josh Saltwood founded Sweet Life, he was one of three licensed retailers selling Kombucha. When Purple Moray struck, there were more than two dozen U.S.-based producers. The burgeoning coconut water market reflects a similar reality.
As Sweet Life tries to claw back to some semblance of success, it faces an initial market share loss of some $10 million annually, and there is no policy that can insure that.
Risk & Insurance® partnered with FM Global to produce this scenario. Below are FM Global’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance®.
While one could argue whether cyber risk is still “emerging,” it’s the new reality, and should be dealt with like any other hazard. So, let’s examine this scenario using a traditional risk management approach. Although cyber is a relatively new exposure, traditional risk management concepts apply: risk identification, assessment and mitigation.
Essentially, any organization is subject to a cyber attack, and it’s not a matter of if, but when it happens. In this case, Sweet Life had just upgraded its processing and shipping system, when a data breach occurred. How the breach actually occurred is not clear, but we do know that it did cause some major damage to the industrial system control computers. Serious business interruption ensued, which had a deleterious affect on the company’s supply chain and market share.
Just how aware was Sweet Life that its IT systems were at risk? Did Anne Margate, the chief risk officer, fully understand the potential exposure? Had she and the chief information officer had any discussions about business risk impact if the systems were compromised? Today’s risk manager has to think well beyond insurance procurement. In this new digital era, the CIO becomes a new and important ally in managing risk.
Potential questions to ask:
- To what extent are your business operations tied to computers, and how reliant are you on these systems to keep your operations running? Do you have a back up plan?
- How secure is your network? How resilient are your email spam filters and malware protection devices?
- Have employees received proper network security training?
- Are measures in place to keep potential intruders from gaining access to your network—internally and externally?
Some pre-emptive actions to consider:
- Determine what information security standard applies to your industry and base your cybersecurity framework on standardized practices.
- Identify and classify data based on business criticality, as well as sensitivity/confidentiality of data.
- Identify critical assets and physical/logical network access points at your facility and determine how access is controlled. Prioritize improvement activities.
- Create and maintain a documented incident response team to respond to cyber events. The plan should be part of a holistic risk management program.
- Test the plan. Tabletop simulation exercises can test the plan and identify restoration timeframes.
Multiple policies, various coverage: In terms of insurance coverage, cyber losses tend to involve multiple carriers. In this case, Sweet Life had three separate policies for cyber, crime and property. Unfortunately, how these policies would respond in the event of a cyber attack had never been fully vetted. As is the case with any insurance coverage, the time to learn about what is covered is an exercise best conducted before the loss actually occurs. If you have multiple carriers, be sure that you and your broker meet with them in advance to understand how the policies will respond and iron out any discrepancies.
From Drones to Defects: Planning for Construction’s Top Challenges
The construction industry is firing on all cylinders. New projects spring up every day, but not all go according to plan.
Three out of every four construction projects fail to finish on time. Every party involved – owners, designers, contractors and subcontractors – expects perfection, with the final product delivered on schedule and on budget. Those expectations leave little room for uncertainty, so even a small hiccup can have ripple effects that disrupt a project for everyone.
“There’s often a big disconnect on the front end of project planning,” said Doug Cauti, Senior Vice President, National Insurance, Chief Underwriting Officer, Construction, Liberty Mutual.
Proactive risk mitigation is also important to manage emerging challenges facing the construction industry ‒ drone regulations are evolving, commercial auto losses are rising, and so is uncertainty about which party might be held responsible for a construction defect. Without the proper planning, these issues can easily be overlooked and result in major losses and project disruption.
Liberty Mutual’s Doug Cauti discusses key challenges facing the construction market.
“Key risk management strategies have to be aligned among all parties from the beginning to minimize these uncertainties.”
Before construction begins, there are actions that project owners, designers and contractors can take to address these challenges and better protect their projects and businesses:
Drones can be useful tools on construction sites, providing an extra set of “eyes” for large commercial projects or tall buildings. They provide a real time aerial glimpse of works in progress, giving supervisors an added perspective to spot potential flaws, assess safety hazards, and check on workers. But many challenges remain in the safe — and legal — operation of drones.
Liberty Mutual’s interactive infographic highlights risks related to managing drones at construction sites, and also includes a pre-planning drone use guide and a pre-flight checklist that includes making sure to review the latest drone regulations.
How construction buyers can manage the insurance implications of using drones in their operations.
General contractors and project owners need to stay up to speed on FAA regulations, which changed in August, 2016.
“For one thing, operators need to have the drone in sight at all times,” Cauti said.
“And you need to make sure any operators are appropriately licensed and trained, that the drones are regularly maintained, and that the machines don’t impede on others’ safety and privacy.”
Clear flight paths and work zone boundaries can minimize the risk of a drone striking another property, or worse, a person. Operators should also know how to conduct an emergency landing if the drone suddenly loses power. It’s also important to consider how you are going to manage and use drone footage. Advertising liability can be a concern if third party images are captured and released. Know who is in charge of the data collected, who has access to it, and how you are going to protect it.
“If the contractor owns the drone, it takes on more liability. The contractor should review its insurance policies to make sure the coverage will respond to that risk,” Cauti said.
“As an insurance carrier, we may have a role to play in those proactive discussions. We are uniquely positioned to help project stakeholders see their risks and work to minimize them.”
— Doug Cauti, Senior Vice President, National Insurance, Chief Underwriting Officer, Construction, Liberty Mutual Insurance
Contractors and project owners can protect themselves through enhancements to their commercial general liability policies or through separate aviation policies, he said.
If a general contractor leases a drone through a third party, “they bear the responsibility of making sure the vendor is fully insured,” Cauti said. Vendors should have “non-owned” aviation coverage with limits suitable to handle the size of the risk.
Commercial auto losses challenge many business sectors, and construction is no exception.
More vehicles on the road and more miles driven, combined with fewer experienced commercial drivers, are driving up the frequency of accidents. On construction sites in particular, congestion created by closed roads, piles of materials and roving heavy machinery may lead to work zone accidents. Rising medical costs and repair and replacement costs of high-tech vehicles increase claim severity.
“I don’t see this trend reversing any time soon,” Cauti said.
Mitigating commercial auto losses begins with driver hiring practices.
“Pay attention to who you put behind the wheel,” Cauti said.
“Motor vehicle reports (MVRs) and driving history can alert employers to previous accidents or tickets. But there also needs to be regular communication with the drivers you do hire, and clear protocols in place that define expectations of how the job should be performed,” he added.
Ways construction buyers can manage rising commercial auto loss costs and better protect their fleets and employees.
Those protocols include requiring the use of seat belts, prohibiting cell phone use while behind the wheel, mandating scheduled breaks, outlining maintenance procedures, defining if company vehicles can be used for personal use, and establishing crash report procedures that delineate who to contact and what information to collect in the event of an accident.
Contractors can also monitor fleet performance through telematics systems. These on-board systems can track unsafe driving behaviors like hard braking, sharp turns, and speeding. But the data is only as good as the person analyzing it. Contractors and project owners should partner with an insurer who can use fleet telematics data effectively to pinpoint common causes of accidents and recommend specific risk mitigation strategies.
Liberty Mutual’s Managing Vital Driving Performance is one tool that leverages insureds existing telematics data to identify unsafe driving behaviors and accident patterns.
“Our risk control consultants can drill deeper into the data and interview drivers to identify patterns and find out the root causes of bad driving behaviors in the first place,” Cauti said.
For example, a post-accident interview with a driver could reveal that he had been skipping breaks and spending too many hours on the road, leading to fatigue and inattentive driving.
Identifying those connections enables consultants to make specific risk mitigation recommendations, such as adjusting drivers’ schedules and workloads to reduce overtime, or adjusting dispatch protocols so employers can ensure drivers aren’t working too many shifts in a short period of time.
Another uncertainty project owners, designers and contractors have to face is how insurance coverage will apply should a project end up in a dispute. “The struggle is around the definition of ‘faulty workmanship’ and who is responsible for the defect. Is it in the design or the build?” Cauti said.
“There can be a lot of finger pointing involved. This reinforces the need for contractors to have a systematic quality assurance (QA) program that adheres to best practices, and for every party to have a role in it.”
Elements of a QA program could include testing of construction materials, conducting regular walk-throughs and obtaining approvals from the owner at key phases, and final sign-off by the owner at the project’s completion.
How construction defects and the current legal climate are affecting projects.
Construction defect claims can affect a business’s reputation, profits, and ability to maintain insurance coverage. That’s why it’s so important to be vigilant about avoiding construction defects, whether you’re a designer, developer, owner or general contractor.
Ultimately, though, these risks should be addressed before ground is broken. Discussing these challenges and collaborating on loss prevention strategies up front reduces the likelihood that any “hiccups” will throw off project timelines or increase costs for the various stakeholders.
Pre-planning discussions also offer the opportunity for these parties to take advantage of carrier partners’ risk control services.
“As an insurance carrier, we may have a role to play in those proactive discussions,” Cauti said.
“We are uniquely positioned to help project stakeholders see their risks and work to minimize them.”
To learn more about Liberty Mutual’s solutions for the construction industry, visit https://business.libertymutualgroup.com/business-insurance/industries/construction-insurance-coverage.
 Managing Uncertainty and Expectations in Building Design and Construction SmartMarket Report
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.