Risk Management

The Profession

Sandra Little of the Bar-S Foods Co. talks about the diligence needed to prevent product recalls and the fascination of people-watching.
By: | November 2, 2015 • 5 min read

R&I: What was your first job?


My first job ever was for the Newark Star Ledger. I used to deliver papers in the morning before school. I was probably about 12 years old.

R&I: How did you come to work in risk management?

I was working in the liability claims area in New Jersey and Delaware for ESIS, a TPA that is part of ACE. Then when I came to Arizona I worked for a couple of excess and surplus insurance companies in the claims area. I just got to the point where I was looking for a change but wanted to be able to use my claims skills and risk management seemed to be a perfect fit.

R&I: Where did you start out?

My first risk management position was with Elizabeth Arden Spas, where I began working in 2006. I stayed on until 2013.

Sandra Little, manager, enterprise risk, Bar-S Foods Co.

Sandra Little, manager, enterprise risk, Bar-S Foods Co.

R&I: What is the risk management community doing right?

I think we’re creating visibility for ourselves by demonstrating vision and value. In my view, risk management is the blending of science and art. You’ve got to be creative in how you approach everyday challenges, but then you have to translate information into concrete numbers to provide to the financial side of the business, again establishing value. That is really a great part of what we do.

R&I: What could the risk management community be doing a better job of?

I think we could do a better job at establishing support and purpose for risk management education at the university level. There are some programs out there, and I think we could do more to promote existing ones and to create new ones.

R&I: What emerging commercial risk most concerns you?

Being in the food manufacturing business, we are always very aware of contamination issues. We’ve seen a lot of recalls this year with a variety of different things involving produce, ice cream, hummus and more. I think that the risk management community and insurance industry must remain diligent in efforts to maintain effective supply chains and distribution channels.

R&I: What insurance carrier do you have the highest opinion of?

The one I have the highest opinion of is the one that responds when I have a problem. Our organization is so large and complex that when I have a problem I need someone who can address the scope of what my risk is. It could be AIG, or ACE, Travelers, Liberty or virtually any commercial insurer that has depth and resources.

112015_profession_sidebarR&I: Are you optimistic about the U.S. economy or pessimistic and why?

I’m going to say optimistic. I’m generally a “less regulation” person, so I think if companies had the benefit of having less regulation, in a general context, we could be doing even better.

R&I: Who is your mentor and why?

Actually many of the people I’ve met through RIMS have been mentors to me. But I want to particularly mention two women, the first being Lynn Lovell, who has been a mentor for me since I entered the risk management community. She is a risk manager and an educator and does a lot of in-person and online teaching. I would also mention a woman by the name of Jackie Wanta, who is a construction account manager for broker Lovitt & Touché. I met her through Lynn and she lives down the street from me so we spend a lot of time talking about industry topics. She is also a former president of the “Big I” (Independent Insurance Agents & Brokers of America) here in Arizona.


R&I: What have you accomplished that you are proudest of?

I have two things to mention: I trained for and ran a half-marathon a few years back. It was one of those things I just thought I’d never be able to do. Also the completion of my MBA. Those two things really gave me the ability to understand that I could accomplish whatever I wanted and that led me to the place I am today.

I like this work because it’s different every day. You don’t know what’s going to happen or the challenges you’re going to be handed on any given day.

R&I: What’s the best restaurant you’ve ever eaten at?

There is a steak house here in Scottsdale called City Hall. I really enjoy that restaurant because the food is simple but so well done that it’s exquisite.

R&I: What is your favorite drink?

I really had to think about this one: It’s my morning coffee! After that, its probably water. But I just love the experience of coffee in the morning.

R&I: What is the most unusual or interesting places you have ever visited?

I haven’t travelled too much outside of the United States, so I would have to say Times Square and Las Vegas. In both places, particularly Times Square, you just see every range of person in just about every point in their life, with every type of emotion that you could imagine. It’s just fascinating to watch those people.

R&I: What is the riskiest activity you ever engaged in?

Inviting two of my nieces to move in with me when they were trying to launch their careers after graduating college. It’s so important to have a mentor and a support system at that stage since it will impact the rest of that person’s life. I took that vocation very seriously because I was aware of how I could impact these girls.

R&I: What do they do now?

One is about to become a senior accountant for a company called SilverRock. The other is an accounting assistant for broker Risk Placement Services in Scottsdale.

R&I: If the world has a modern hero, who is it and why?

At the risk of sounding cliché I think it’s the military, the police and the firefighters. These people put their lives on the line every day and yet are so humble, and ask for so little in return.


R&I: What about this work do you find the most fulfilling or rewarding?

I like this work because it’s different every day. You don’t know what’s going to happen or the challenges you’re going to be handed on any given day.

R&I: What do your friends and family think you do?

I don’t think they know what I do. They do know I am a great reference for insurance-related questions, but unless they are industry people, I don’t think they know what I do.

Janet Aschkenasy is a freelance financial writer based in New York. She can be reached at [email protected]
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Risk Insider: Martin Frappolli

Baseball’s Nagging Problem With Player and Fan Injuries

By: | October 23, 2015 • 3 min read
Martin J. Frappolli, CPCU, FIDM, AIC, is Senior Director of Knowledge Resources at The Institutes, and editor of the organization's new “Managing Cyber Risk” textbook. He can be reached at [email protected]
Topics: ERM | Liability | Risk Insider

Football is, by nature, a violent sport. While the fans (the sober ones, anyway) are seldom at risk, the NFL has been taking action to reduce player injuries. Rules are revised to protect defenseless players, and better equipment is designed to reduce severe injuries.

Baseball, on the other hand, has been slow to find ways to protect either the players or the fans.

Pete Rose and Chase Utley are two of my favorite Phillies because of their game knowledge and hustle. However, in the 1970 All-Star Game, Pete Rose (then a member of the Reds) barreled into Ray Fosse, the American League catcher who was blocking the plate.

There’s a lagging old-school tough guy mentality that affects baseball in that kind of risky game behavior and also in how baseball treats its fans.

Rose could have chosen to slide under the tag, but he had a better chance to score by blasting Fosse with sufficient violence to make him drop the ball. Rose succeeded; he also effectively ended the playing career of an All-Star catcher.

In the 2015 divisional playoffs, Chase Utley (now with the Dodgers) crashed into the Mets’ shortstop Ruben Tejada in an aggressive move to break up a double play. Utley has long been known as a smart baserunner, but he broke Tejada’s leg while making little effort to pretend he was heading for the second base bag.

Were Rose and Utley just taking advantage of the rules?

That’s largely outside the point. Why does baseball encourage plays where one player is given an unmitigated opportunity to injure another? There’s a lagging old-school tough guy mentality that affects baseball in that kind of risky game behavior and also in how baseball treats its fans.

For most of MLB history, teams and owners have been protected from liability for fan injury. When tickets were printed on paper, the fine print on the back contained a disclaimer that fans assumed the liability of injury risk.

Now, the legal doctrine behind that is changing, but why is baseball waiting to be forced to protect the people who buy tickets?

I’ve spent a lot of time in the cheap seats, where you can barely dream of seeing a foul ball reach you. On the other hand, there are several fine minor league parks near my home, and every seat is a good seat. And most of those good seats terrify me, because I sense my vulnerability to a sharply hit foul line drive as I sit behind the dugout.

When I took my daughter to games, I made certain that I sat between her and home plate, and I never dared to stop paying attention to the game action. Does MLB expect every fan to exercise such diligence? Would that prevent every injury?

It’s not a complicated solution. When I go to see the Trenton Thunder or the Wilmington Blue Rocks, I get a seat behind the plate, where I and my family are protected by netting.

MLB likewise provides some protection for those few fans behind home plate, but leaves those along the sidelines entirely vulnerable. With modern technology, the netting needed to protect these fans would not interfere with their view of the game.

As baseball has brought a host of novelties and non-baseball entertainment to ballparks in order to attract children and casual fans more interested in the atmosphere than the game action, the need to protect fans is plain and obvious.

Why are owners waiting for lawsuits and regulations in order to do the right thing?

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Sponsored: Liberty Mutual Insurance

Managing Construction’s True Risk Exposure

Mitigating construction risks requires a partner who, with deep industry expertise, will be with you from the beginning.
By: | November 2, 2015 • 5 min read

When it comes to the construction industry, the path to success is never easy.

After a long, deep recession of historic proportions, the sector is finally on the mend. But as opportunities to win new projects grow, experience shows that more contractors go out of business during a recovery than during a recession.

Skilled labor shortages, legal rulings in various states that push construction defects onto general liability policies, and New York state’s labor laws that assign full liability to project owners and contractors for falls from elevations that injure workers are just some of the established issues that are making it ever harder for firms to succeed.

And now, there are new emerging risks, such as the potential for more expensive capital, should the Federal Reserve increase its rates. This would tighten already stressed margins, perhaps making it harder for contractors and project owners to invest in safety and quality assurance, and raising the cost of treating injured workers.

Liberty Mutual’s Doug Cauti reviews the top three risks facing contractors and project owners.

“Our customers are very clear about the challenges they are facing in the market,” said Doug Cauti, the Boston-based chief underwriting officer for Liberty Mutual’s construction practice.

“Now more than ever, construction risk buyers – and the brokers who serve them – are leveraging our team’s deep expertise to find solutions for complicated risks. This goes way beyond what many consider the traditional role of an insurance carrier.”

Other leading risks facing contractors and project owners.

Given the current risk environment, firms that simply seek out the cheapest coverage could leave themselves exposed to these emerging risks. And that could result in them becoming just another failed statistic.

So what is the best way to approach your risk management program?

Understanding the Emerging Picture

Construction firms have been dealing with multiple challenges over the last several years. Now, several new emerging risks could further complicate the business.

After an extended period of historically low interest rates, the Federal Reserve is indicating that rates could rise in late 2015 or sometime in 2016. That would surely impact construction firms’ cost of capital.

“At the end of the day, an increased cost of capital is going to impact many construction firm’s margins, which are already thin,” Cauti said.

“The trickle-down effect is that less money may be available for other operational activities, including safety and quality programs. Firms may need to underbid and/or place low bids just to get jobs and keep the cash flow going,” Cauti said.

SponsoredContent_LM“Now more than ever, construction risk buyers – and the brokers who serve them – are leveraging our team’s deep expertise to find solutions for complicated risks.”
— Doug Cauti, Chief Underwriting Officer, Liberty Mutual National Insurance Specialty Construction

“Experience shows us that shortcuts in safety and quality often lead to more construction defect claims, general liability claims and workers’ compensation claims,” Cauti said.

Currently, the frequency of worker injuries is down on a national basis but the severity of injuries is on the rise. If those frequencies start creeping up due to less robust safety programs, the costs could grow fast.

And if this possible trend is not cause enough for concern, the growing costs associated with medical care should have the attention of all risk managers.

“Five years ago medical costs represented 56 percent of a claim,” said Jack Probolus, a Boston-based manager of construction risk financing programs for Liberty Mutual.

“By 2020, that medical cost will likely grow to 76 percent of an injured worker’s claim, according to industry experts,” Probolus said.

Rising interest rates and rising medical costs could form a perfect storm.

Focusing on the Total Cost of Risk

For risk managers, the approach they utilize to mitigate the myriad of existing and emerging risks is more important than ever. The ideal insurance partner will be one that can integrate claims management, quality assurance and loss control solutions to better manage the total cost of construction risk, and do it for the long term.

Liberty Mutual’s Doug Cauti reviews the partnership between buyers, brokers and insureds that helps better manage the total cost of insurance.

In the case of rising medical costs, that means using claims management tools and workflows that help eliminate the runaway expense of things such as duplicate billings, inappropriate prescriptions for powerful painkillers, and over-utilization of costly medical procedures.

“We’re committed to making sure that the client isn’t burdened in unnecessary costs, while working to ensure that injured employees return to productive lives in the best possible health,” Probolus said.

The right partner will also have the construction industry expertise and the willingness to work with a project owner or contractor from the very beginning of a project. That enables them to analyze risk on the front end and devise the best risk management program for the project or contractor, thereby protecting the policyholder’s vulnerable margins.

“We want to be there from the very beginning,” Liberty Mutual’s Cauti said.

“This isn’t merely a transaction with us,” he added. “It’s a partnership that extends for years, from binding coverage, through the life of the project and deeper as claims come in and are resolved over time,” he said.

In other words, it’s a relationship focused on value.

Today’s construction insurance market – with an abundance of capacity – can lead to new carriers entering the market and/or insurers seeking to gain market share by underpricing policies.

“We see it all the time,” Liberty Mutual’s Cauti said.

Where does this leave insureds? Frustrated at pricing instability, or by the need to find a new carrier.  And wiser, having learned the wisdom of focusing on value, that is the ability to better control the total cost of risk.

“Premium is always important,” notes Liberty Mutual’s Cauti. “But smart buyers also understand the importance of value, the ability of an insurer to partner with a buyer and their broker to develop a custom blend of coverages and services that better protect a project’s or contractor’s bottom line and reputation. This is the approach our dedicated construction practice takes.

Why Liberty Mutual?

For more information on how Liberty Mutual Insurance can help assess your construction risk exposure, contact your broker or Doug Cauti at [email protected].



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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