The Overlooked Cost Cutter
Musculoskeletal disorders (MSDs) accounted for one-third of all occupational injuries and illnesses in 2013, according to the Bureau of Labor Statistics. Costs for workers’ comp claims involving MSDs are already around $26,000 on average, and can increase when costs associated with absenteeism, retraining, and lost productivity are taken into consideration.
Despite these numbers, there are few proactive methods in place to identify risk factors for the development of a musculoskeletal injury and prevent it from occurring. Rather, approaches to these types of injuries are typically reactionary.
“Companies respond when an employee asks, by which time they already have pain or discomfort,” said Nate Rogoff, software specialist with Humanscale, a manufacturer of ergonomic products. “Ergonomists aren’t able to get ahead.”
Stats compiled by Humanscale show that there is only one certified ergonomist for every 100,000 workers in the United States. Many companies simply overlook the impact that improved ergonomics can have on decreasing injury claims and boosting productivity.
“Most employers do not proportionally allocate their resources — their time, talent and treasure — related to their injury experience and exposures,” said Tom Hilgen, senior risk control consultant at Willis Risk & Analytics. An article written by Hilgen details one company that was allocating only 5 percent of its cost-control resources to ergonomics, even though musculoskeletal injuries accounted for 50 percent of its incurred costs.
Ergonomists’ limited reach is further constricted by corporate silos that separate initiatives by risk management, safety and human resources departments.
“Safety and risk management have their own metrics, and operations have their own metrics, but they often are not aligning them. There needs to be the right alignment of business metrics that includes the impact of MSDs properly and how they affect costs associated with injuries, with absenteeism, turnover, and production quality and schedule,” Hilgen said.
Stats compiled by Humanscale show that there is only one certified ergonomist for every 100,000 workers in the United States.
Collection and sharing of the right data can help companies predict what injuries are likely to occur in which workers, rather than wait for them to appear.
Lagging indicators like type of injury, total count and total dollar amount of claims, and top causes of injuries can help employers pinpoint their top exposures, Hilgen said. But it’s also imperative to track the performance of existing ergonomics interventions.
“The best predictor of future performance is how well are they doing on a daily, weekly, monthly basis in terms of prevention of MSDs,” he said. “We call that a scorecard. We look at their ergonomics processes and score them between zero and 100 to see how they’re doing in terms of implementing best practices for prevention of MSDs.”
But best practices circle back to the professional ergonomists who come in such short supply. In addition to integrating efforts across an organization, employers need to strengthen the expert base from which they draw their best practices.
There are some tools that companies can use to help streamline and focus their efforts on MSD prevention.
Alan Hedge, a professor in the Department of Design and Environmental Analysis at Cornell University developed a software tool called Sonexes that uses predictive analytics to predict work-related MSDs based on the risk factors within a particular work environment.
“[The tool] uses a rule-based algorithm or expert system which utilizes the knowledge and expertise of an ergonomist or practitioner through the software,” said Rogoff, a colleague of Hedge’s. The program checks results from an employee’s checkups against its rule-based system — based on established best practice — to produce a prediction of potential injuries.
“It was created to assist practitioners and ergonomists because they’re so outnumbered,” Rogoff said. “It allows them to gain visibility on their entire employee workforce at the same time. Within the software, they can drill down to different departments and identify high-risk individuals. It allows them to better prioritize their interventions.”
As safety, wellness and employee health initiatives grow inextricably linked, large companies are being called more and more to break down silos, improve communication and share data across all departments. Ergonomics can get lost in these efforts, but the high costs associated with MSDs certainly demand some attention.
Take-Home Exposure a Widespread Problem
More than 1.5 million workers are potentially at risk of lead exposure. The problem can lead to contamination of others unless proper steps are taken, according to the government.
A routine, well child exam showed that a 2-year-old girl had a blood lead level that was nearly three times the amount the Centers for Disease Control and Prevention recommends as a reference level.
“This serves as a warning the child may be exposed to lead at home or in the environment and may require case management,” according to the National Institute for Occupational Safety and Health. “It also allows parents, doctors, public health officials, and communities to take action earlier to reduce the child’s future exposure to lead.”
In this case, the exposure was work-related. A post on the NIOSH science blog explained that the agency has found so-called take-home exposure to be a widespread problem.
Investigators conducted a lead risk assessment of the girl’s home but found no lead-based paint. However, there was lead dust on the floor of the family’s laundry room.
“Upon further testing of the family, [the father] was found to have a BLL of 25 micrograms per deciliter (µg/dL). NIOSH defines an elevated BLL for those over age 16 to be 10 µg/dL or more,” according to the post. The father “told the lead risk assessor that he typically came home from work at the e-scrap recycling facility with dust in his hair and on his clothes. He routinely picked up and played with his 2-year-old daughter Sarah when he arrived home, then would take a shower and throw his clothes in the laundry before sitting down for dinner.”
The agency determined that the father and his coworkers were exposed to lead as they performed various tasks at the e-scrap recycling facility such as crushing cathode ray tubes from discarded televisions and computer monitors.
“Without access to showers at work or uniforms that could be left at work for laundering, employees of the e-scrap recycling facility risked contaminating their personal clothes, vehicles, and homes with lead,” the post said. “The Occupational Safety and Health Administration estimates that approximately 804,000 workers in general industry and an additional 838,000 workers in construction are potentially exposed to lead as a result of the production, use, maintenance, recycling, and disposal of lead material and products.”
The government recommends employers help prevent take-home exposure by:
- Reducing exposure in the workplace.
- Having employees shower and change clothes before going home and leaving soiled clothing at work for laundering. They should also store street clothes in areas separate from work clothes.
- Prohibiting removal of toxic substances or contaminated items from the workplace.
“Preventing take-home exposure is critical because decontaminating homes and vehicles is not always effective,” according to the post. “Normal house cleaning and laundry methods are inadequate, and decontamination can expose the people doing the cleaning and laundry.”
In the case above, the father quit his job at the e-scrap recycling facility. Three months later, his daughter’s BLL had decreased substantially.
Detention Risks Grow for Traveling Employees
It used to be that most kidnapping events were driven by economic motives. The bad guys kidnapped corporate employees and then demanded a ransom.
These situations are always very dangerous and serious. But the bad guys’ profit motive helps ensure the safety of their hostages in order to collect a ransom.
Recently, an even more dangerous trend has emerged. Governments, insurgents and terrorist organizations are abducting employees not to make money, but to gain notoriety or for political reasons.
Without a ransom demand, an involuntarily confined person is referred to as ‘detained.’ Each detention event requires a specialized approach to try and negotiate the safe return of the hostage, depending on the ideology or motivation of the abductors.
And the risk is not just faced by global corporations but by companies of all sizes.
“The world is changing. We see many more occasions where governments are getting involved in detentions and insurgent/terrorist groups are growing in size and scope. It’s the right time for a discussion about detention risks.”
— Tom Dunlap, Assistant Vice President, Liberty International Underwriters (LIU)
“Practically any company with employees traveling abroad or operations overseas can be a target for a detention risk,” said Tom Dunlap, assistant vice president at Liberty International Underwriters (LIU). “Whether you are setting up a foreign operation, sourcing raw materials or equipment overseas, or trying to establish an overseas sales contract, people are traveling everywhere today for so many reasons.”
Emerging Threats Driven By New Groups Using New Tools
Many of the groups who pose the most dangerous detention threats are well versed in how to use the Internet and social media for PR, recruiting and communication. ISIS, for example, generates worldwide publicity with their gruesome videos that are distributed through multiple electronic channels.
Bad guys leverage their digital skills to identify companies and their employees who conduct business overseas. Corporate websites and personal social media often provide enough information to target employees who are working abroad.
And if executives are too well protected to abduct, these tools can also be used to identify and target family members who may be less well protected.
The explosion of new groups who pose the most dangerous risks are generally classified into three categories:
Insurgents – Detentions by these groups are most often intended to keep a government or humanitarian group from delivering services or aid to certain populations, usually in a specific territory, for political reasons. They also take hostages to make a political statement and, on occasion, will ask for a ransom.
In other cases, insurgent groups detain aid workers in order to provide the aid themselves (to win over locals to their cause). They also attempt prisoner swaps by offering to trade their hostages for prisoners held by the government.
The most dangerous groups include FARC (Colombia), ISIS (Syria and Iraq), Boko Haram (Nigeria), Taliban (Pakistan and Afghanistan) and Al Shabab (Somalia).
Governments – Often use detention as a way to hide illegal or suspect activities. In Iran, an American woman was working with Iranian professors to organize a cultural exchange program for Iranian students. Without notice, she was arrested and accused of subversion to overthrow the government. In a separate incident, a journalist was thrown in jail for not presenting proper credentials when he entered the country.
“Government allegations against detainees vary but in most cases are unfounded or untrue,” said Dunlap. “Often these detentions are attempts to prevent the monitoring of elections or conducting inspections.”
Even local city and town governments present an increased detention risk. In one recent case, a local manager of a foreign company was arrested in order to try and force a favorable settlement in a commercial dispute.
Ideology-driven terrorists – Extremist groups such as Boko Haram and ISIS are grabbing most of today’s headlines with their public displays of ultra-violence and unwillingness to compromise. The threat from these groups is particularly dangerous because their motives are based on pure ideology and, at the same time, they seek media exposure as a recruiting tool.
These groups don’t care who they abduct — journalist, aid worker, student or private employee – they just need hostages.
“The main idea here is to shock people and show how governments and businesses are powerless to protect their citizens and employees,” observed Dunlap.
Mitigating the Risks
Even if no ransom demands are made, an LIU kidnap and ransom policy will deliver benefits to employers and their employees encountering a detention scenario.
For instance, the policy provides a hostage’s family with salary continuation for the duration of their captivity. For a family who’s already dealing with the terror of abduction, ensuring financial stability is an important benefit.
In addition, coverage provides for security for the family if they, too, may be at risk. It also pays for travel and accommodations if the family, employees or consultants need to travel to the detention location. Then there are potential medical and psychological care costs for the employee when they are released as well as litigation defense costs for the company.
LIU coverage also includes expert consultant and response services from red24, a leading global crisis management assistance firm. Even without a ransom negotiation to manage, the services of expert consultants are vital.
“We have witnessed a marked increase in wrongful detentions involving the business traveler. In some regions of the world wrongful detentions are referred to as “business kidnappings.” The victim is often held against their will because of a business dispute. Assisting a client who falls victim to such a scheme requires an experienced crisis management consultant,” said Jack Cloonan, head of special risks for red24.
Without coverage, the fees for experienced consultants can run as high as $3,000 per day.
Given the growing threat, it is more important than ever to be well versed about the country your company is working in. Threats vary by region and country. For example, in some locales safety dictates to always call for a cab instead of hailing one off the street. And in other countries it is never safe to use public transportation.
LIU’s coverage includes thorough pre-travel services, which are free of charge. As part of that effort, LIU makes its crisis consultants available to collaborate with insureds on potential exposures ahead of time.
Every insured employee traveling or working overseas can access vital information from the red24 website. The site contains information on individual countries or regions and what a traveler needs to know in terms of security/safety threats, documents to help avoid detention, and even medical information about risks such as pandemics, etc.
“Anyone who is a risk manager, security director, CFO or an HR leader has to think about the detention issue when they are about to send people abroad or establish operations overseas,” Dunlap said. “The world is changing. We see many more occasions where governments are getting involved in detentions and insurgent/terrorist groups are growing in size and scope. It’s the right time for a discussion about detention risks.”
For more information about the benefits LIU kidnap and ransom policies offer, please visit the website or contact your broker.
Liberty International Underwriters is the marketing name for the broker-distributed specialty lines business operations of Liberty Mutual Insurance. Certain coverage may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds. This literature is a summary only and does not include all terms, conditions, or exclusions of the coverage described. Please refer to the actual policy issued for complete details of coverage and exclusions.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.