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Workplace Safety

Scientists Look to Protect Workers From Climate Change

While there has been much research and planning regarding the environmental aspects of climate change, few are discussing the potential impact on workers.
By: | October 27, 2014 • 3 min read
hazmat mask

“Climate change may result in not only the increasing prevalence and severity of known occupational hazards and exposures, but also the emergence of new ones,” states a blog post. “Workers are often the first to be exposed to the effects of climate change and may be affected for longer durations and at greater intensities. Recently, workers were referred to as ‘the canaries in the coal mine of climate change impacts.”’

But the article on the National Institute for Occupational Safety and Health’s website also notes that while there has been much research and planning on public health from the environmental aspects of climate change, little has been done on the effects on workers.

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Those particularly at risk include outdoor workers, emergency responders, commercial fishermen, health care workers, farmers, certain indoor workers, and transportation and utility workers. “For worker populations such as migrant workers and day laborers who may have inadequate housing or other social and economic constraints, the health effects of climate change may be additive from exposures both at work and at home,” according to the post.

The potential effects of climate change on workers include:

Direct effects such as increased ambient temperatures, air pollution, ultraviolet radiation, extreme weather, vector-borne diseases, and expanded vector ranges.

Indirect effects, such as hazards from new and emerging industries such as renewable energy, carbon sequestration, and “green industries,” and changes in how structures and communities are built and maintained.

“There is strong evidence that climate change is and will continue presenting risks of job-related injury, illness, and death …” — National Institute for Occupational Safety and Health

“Climate change can contribute to decreasing the ozone layer and affect UV radiation levels at the surface of the earth. Outdoor workers will have more frequent, intense, and longer exposure to UV radiation, resulting in increased risk of adverse eye effects, skin cancer, and possibly immune dysfunction,” the article states. “Extreme weather events or natural disasters, such as floods, landslides, storms, lightning, droughts, and wildfires, are becoming more frequent and intense. Weather disasters may cause deaths, injuries, diseases, and mental stress.”

The post notes that an executive order signed by President Obama last year made a commitment to prepare the nation for the potential impacts of climate change. “The challenge is to characterize how these climate events may influence worker health and safety and to establish plans for mitigating, responding, and adapting to the current and anticipated impacts.”

NIOSH has created a team of scientists to investigate the implications of climate change for worker health and safety and to develop an action plan. Called the NIOSH Climate Change Occupational Safety and Health Work Group, the team is charged with determining relevant issues, identifying gaps in worker protection, and making recommendations for worker safety and health improvements.

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“There is strong evidence that climate change is and will continue presenting risks of job-related injury, illness, and death, so numerous critical research questions need to be resolved regarding specific hazards, sentinel events, risk assessment, and preventive actions,” the post says. “Additional research needs include susceptible populations, surveillance, and indicators relevant to climate change and workers. A strategic research plan will provide the roadmap for a broad approach to meeting these needs. As a result, the health consequences of climate change and how to lessen them will be widely understood.”

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com.
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Expedition Exposures

Brokers Bankrolling Adventures

Retracing the route of Amelia Earhart is the most recent adventure made possible by brokers.
By: | September 2, 2014 • 7 min read
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When it comes to great adventures, youth will be served by large insurance brokerages.

On June 26, weather permitting, 31-year-old aviatrix Amelia Rose Earhart will embark on an around-the-world flight retracing the route of her famous namesake. If successful, Earhart will become the youngest woman to circumnavigate the globe in a single-engine aircraft.

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Earhart and her aircraft will be insured on a pro bono basis through policies structured and secured by Kansas City, Mo.-based Lockton Cos., the world’s largest privately held insurance broker.

“Lockton is thrilled to be a part of this legendary journey,” said Ty Carter, aviation producer at Lockton and the liaison coordinating the insurance protection for Earhart and for the Pilatus aircraft that she will be flying.

“We are passionate about aviation and appreciate Amelia’s efforts to raise awareness of the opportunities and experiences she provides. Her tenacity and spirit are truly inspiring.”

Though she is not a blood relative of the late Amelia Earhart, Amelia Rose Earhart has had a love of flying from an early age.

“I started dreaming of flying when I was 18 years old, and I’ve been flying for 10 years,” said Earhart, who planned the entire 17-stop route of her flight, which originates in Oakland, Calif.

Journey to the South Pole

Explorer Parker Liautaud and Willis Global Director of Communications

Explorer Parker Liautaud and Willis Global Director of Communications Nathan Hambrook-Skinner at the South Pole.

This venture was preceded by another headline-making adventure that teamed Willis Group Holdings plc with Parker Liautaud, a 19-year-old sophomore at Yale University who on Christmas Eve became the youngest man to ski to the South Pole.

Liautaud and companion Doug Stoup set a new speed record for the fastest-ever unsupported walk from the edge of Antarctica to the South Pole in 18 days, four hours and 43 minutes.

Known as the Willis Resilience Expedition, the venture was jointly sponsored by Willis and EMC, a large global technology company.

On their expedition, Liautaud and Stoup were tracked by sophisticated communications housed in Ice Broker, a custom-built Toyota Hilux six-wheel truck that broadcast live around the world and on the expedition’s website. The truck was created by a team assembled by Willis and tested in Iceland.

“It was Parker who first approached Willis,” said Nathan Hambrook-Skinner, London-based director of communications for Willis Global. “He came to us early in 2013 with the idea that he wanted to ski to the South Pole.”

For Liautaud, it was the end of a long journey.

Until he connected with Willis, Liautaud spent 8 p.m. to 1:45 a.m. “every night without fail in the basement of the nearest library sending out emails seeking support for the venture,” he said.

As part of Willis’ aid for Liautaud’s adventure, the global insurer handled all insurance aspects.

“Risk management was a key focus for us.” — Nathan Hambrook-Skinner, Willis global director of communications

“Risk management was a key focus for us,” said Hambrook-Skinner. “You can’t really go to Antarctica without full evacuation insurance, which you’ll need to cover you if there’s any accident. Obviously we had that fully covered.”

Willis, a leading global risk adviser and insurance and reinsurance broker operating on every continent, also handled the insurance for the Ice Broker. And of course Liautaud and four other expedition members, including Hambrook-Skinner, were covered by insurance.

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“We had a crisis risk management consulting team in London that was constantly monitoring our progress,” said Hambrook-Skinner. “If anything had gone wrong, they would have covered the expedition.”

Along with the snow-skiing record, major accomplishments of the venture included:

• Liautaud took snow samples along the journey that formed a valuable contribution to current studies on climate change.

“Overall, we were able to do much more in terms of data gathering and scientific exploration in previously unexplored and untouched part of Antarctica,” said Hambrook-Skinner.

• The expedition partnered with EMC to create data visualizations to engage the public in a better understanding of the science behind climate change and the importance to society.

• A lightweight weather station was tested for the first time in Antarctica.

“The objective of the venture for us as a global risk adviser and insurance broker at the forefront of supporting businesses and individuals all around the world was to help build resilience to extreme events and natural disasters, this being one of those events,” said Hammond-Skinner.

“So it was very natural for us to help support an expedition like this which was seeking to enhance understanding of how the world is changing and how climate matters might be changing over time and help shed some light on that,” Hammond-Skinner said.

Policy Parameters

For “The Amelia Project,” Earhart and her aircraft are structured and secured by Lockton through Global Aerospace. The policy provides a combined single limit for property damage and bodily injury, as well as physical damage to the aircraft.

“One of the key parameters essential to the primary policy was the inclusion of ‘worldwide territory.’ ” — Ty Carter, aviation producer, Lockton

“One of the key parameters essential to the primary policy was the inclusion of ‘worldwide territory’ ” said Lockton’s Carter. “Due to the nature of this trip, which will occur over approximately 19 days and include 28,000 miles, having a policy that allowed for flexibility in routing was critical to the program’s success.”

Lockton was chosen to handle all aspects of the expedition’s insurance because of Carter’s long-standing and close relationship with Pilatus aviation.

“I’ve owned two Pilatus planes and I’ve also been the former president of the Pilatus Owners and Pilots Association,” said Carter. “I’ve had thousands of hours flying Pilatus aircraft.”

In financing the project, Earhart was greatly aided by Pilatus, which donated a Pilatus PC-12 NG single-engine aircraft for the flight.

In addition, with some help from Lockton, Earhart was able to sell 20 sponsorships to help pay for the flight.

“We were able to put their logos on the outside of the aircraft and also on my flight jacket as well as that of my co-pilot Shane Jordan,” said Earhart.

“I took it upon myself to bring in the sponsorships. I had never done any selling prior to that. I really knew nothing about the process getting started but I learned along the way.”

Lockton is dedicating a team of aviation experts to assist Earhart 24/7 during her flight, with regard to any insurance issue, “or for that matter any question to support her while she is making this journey,” Carter said.

“Our group internally is a mix of pilots, people who have been involved in the maintenance side and former underwriters,” he said. “We have a couple of people on our team who are fully dedicated to the project, literally from the time Amelia leaves until she returns.”

Prior to launching her flying career, Earhart was a helicopter traffic co-anchor for NBC affiliate KUSA in Denver, where she also is president of the Fly With Amelia Foundation, which grants flight scholarships to girls between the ages of 16 and 18 and supports the advancement of general aviation opportunities.

Round Two for Solar Impulse

In another aviation promotional undertaking, Swiss Re Corporate Solutions will join Solar Impulse in a joint venture to launch the Solar Impulse 2 airplane in 2015, in an effort to fly around the world using only solar power.

It took 12 years of calculations, simulations, construction and testing to arrive at the launch of Solar Impulse 2, one of the most technologically advanced aircraft of our time, company officials said.

In 2012, Swiss Re became the sole insurer of Solar Impulse 2. The plane was considered uninsurable by others and yet made the first coast-to-coast crossing of the United States by a solar plane. See R&I’s story on that journey here.

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“Insurance plays an important role in supporting pioneering projects in the renewable energy sector,” said Agostino Galvagni, CEO of Swiss Re Corporate Solutions.

“We believe that advancing renewable energy and clean technologies, and establishing them as integral components of the global energy mix, is crucial to ensuring a sustainable future.

“The intent of the Solar Impulse-Swiss Re Corporate Solutions partnership is to endorse and promote this message,” he said.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at riskletters@lrp.com.
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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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