Newsletter Sign-up

Risk Engineer
Oman Insurance Co.
Dubai

Comic strip bridges cultural gaps and helps workers understand the need for safety on the job.

Working in the rapidly modernizing United Arab Emirates in the Middle East, Manuel "Mike" B. Perito Jr., risk engineer for the Oman Insurance Company, was faced with the challenge of instilling safety awareness and a risk management focus in construction projects and real estate developments.

Knowing from experience that a picture can be worth a thousand words, Perito turned to the power of comics and created the superhero character Super Oman to get across the risk and safety story.

Super Oman comes to the rescue of people worried about safety in their apartments and on construction sites with practical and timely information. One strip, for instance, dealt with the need for construction project developers to instill a safety culture down through their contractors and subcontractors to the laborers. Another addressed the question of fire safety in new apartment buildings for residents.

"My hat's off to a talented man like him ... (for) introducing a technical info-comics like Super Oman in the specialized field of risk management and insurance," Saad Al Beiruti, senior manager of the risk management unit for Oman Insurance Co, wrote in an e-mail.

"We have maximized the risk and loss control awareness through distribution of the cartoon series to our valued clients, thus paving the way for them to implement some loss control recommendations by installing proper fire fighting equipment, observing good housekeeping and other safety measures. There were loss reductions to the clients who took our advice and (who) have openly appreciated our comic strip," Beiruti wrote.

Besides having a direct impact on loss control and risk management for clients, the Super Oman strip also has won recognition by winning a prestigious IDEAS.ARABIA award organized by the Dubai Quality Group. Perito won a special award of appreciation and first runner-up in the health and safety category.

Using the comic strip has allowed Perito to reach a wide audience.

"Graphic and pictorial ways of describing or educating clients about risk management are easily adapted by clients and their employees, particularly the labor sectors in construction and warehouses," said Perito, who trained as a civil engineer in his native Philippines, where he also developed an informative comic for the World Wildlife Fund to alert villagers on the island of Mindoro about the dangers of deforestation and the need for preservation of the mangrove forests.

The comic has been a big success in helping to instill a safety culture in a rapidly developing country.

"It has a big impact for clients and employees just when risk management is in the infancy stage, particularly in a booming economy like Dubai where construction and business expansions are everywhere," Perito said. "So when we released the comic strip coupled by surveys and recommendations and follow-up visits for updates on implementation ... clients eventually realized the importance of good housekeeping, (and) installing the required fire fighting facilities."

Perito said that he strives to help clients manage risk themselves with risk elimination, reduction and control measures while also adopting risk transfer for the uncertainties.

"They (the comics) have certainly reached the local market here in Dubai and are backed up with real knowledge of fire and insurance situations," wrote Robert Morgan, principal architect for Scott Wilson Kirkpatrick & Co. Ltd., Dubai. "Through Mike's office, I am now able to acquire information at concept stage, regarding both risk and strategy for fire protection. This is at commencement of a project, rather than at the end."

"Dubai and the Middle East are developing markets," Morgan wrote. "Mike has been able to take this several stages further in that he has spread the message with regard to risk."

--By Michael Fitzpatrick

Broker
Las Vegas Real Estate Professionals
Las Vegas

An ex-Air Force pilot uses a game to mimic commercial real estate risks.

With a background in demolition, weapons and explosives gained through a career in the Air Force, Jeffery Bollman, a broker with Las Vegas Real Estate Professionals, brings a different perspective to risk management. The Las Vegas real estate consultant and broker, who sustained injuries in the 1996 terrorist bombing of the Dhahran air base in Saudi Arabia, knows first hand that risk is always a presence.

He's taken that background, which included serving as superintendent of weapons safety and developmental projects manager in the Air Force and applied it to managing the risks inherent in commercial property and real estate. "I was able to take those things and apply them to the focus of my company," Bollman said.

"One of the things that we provide is assessment of facilities. I've done it for McCarran Airport, I've done it for the Department of the Air Force at Nellis (Air Force Base) ... I've done it for a number of different large utilities and entities to evaluate their commercial property with respect to the things that can happen both natural and unnatural."

In commercial real estate, Bollman has developed a process for evaluating the risks inherent in a particular property for buyers, sellers, potential lessors and lessees. In his consultations, Bollman goes over the client's goals and develops a commercial risk analysis and reduction statement for a particular piece of property.

"I try and look at things with respect to particular properties. Where are they located? What goes on there? What are the tenant mixes? What is the neighborhood supporting? What is the demographic? And you start to look at these data points ... and then you're looking at it in such a way that you apply it to risk on a particular property."

This leads to a comprehensive report on a particular piece of property that lays out what the most likely risks are for a certain piece of property, whether it be economic concerns, problems with crime or other issues.

"People get involved in things and they really don't have a good command of what it is they're looking for," Bollman said. "We try and provide those things in such a format that we let them know that 'you're at risk for crime,' for example, 'you're at risk for these particular events.' " In addition, Bollman has developed a commercial property management profile that is similar to the disclosure form that sellers must provide in a residential transaction, but in the form of a 10-page document.

"If you can do things like this then the chances of litigation down the road for a particular negotiated contract, whichever side you're on, are going to be much more diminished," Bollman said.

He also has developed a CD training program that discusses commercial property risk management from a total perspective, as well as a board game to help clients learn about risks involved in investing in commercial property.

The training program addresses potential catastrophes, both natural and man-made, that can affect a commercial property as well as outlining certain scenarios and deciding what actions or precautions are necessary, such as providing training for on-site property managers, what to do about criminal activity, disgruntled employees and bomb threats.

Bollman's board game, called "Aspiration," takes up to 12 participants through the commercial real estate investing business with a view to identifying and mitigating the potential risks. The game starts with the participants seeking to amass money and then begin to invest in real estate.

"You start to acquire property and you can do building and you can do zoning and all these things that are an essential part of the development of any project. You go through the process and throw in some curve balls and see how people react," Bollman said, "and they learn a lot."

--By Michael Fitzpatrick

Supervisor of Corporate Risk
Vulcan Materials
Birmingham, Ala.

Vulcan adapts a browser-based system for on-site claims reporting and cuts costs by 40 percent.

Safety and workers' comp claims are a major concern for Vulcan Materials, a Birmingham, Alabama-based construction aggregates company. Many of the company's 8,000 employees work in stone quarries and sand and gravel plants with heavy machinery: massive haul trucks, loaders and processing equipment that crushes boulders into pebble-sized bits of stone.

As supervisor of corporate risk, Chilcoat was looking for a way to streamline and standardize workers' comp claims from the company's 166 stone quarries, 37 sand and gravel plants, 66 sales yards, 45 asphalt plants and 22 ready-mixed concrete facilities.

"We're self-insured and self-administered for workers' comp claims and liability claims," Chilcoat said. "What had been happening in the past is that our various divisions throughout the country would fill out a paper, either a workers' comp claim form or a liability claim form, and they would either fax it or mail it."

Those handwritten forms, however, were prone to errors, forcing Chilcoat's staff to spend much of their time simply double-checking information such as Social Security numbers or having to make follow-up calls to decipher someone's handwriting.

To tackle this problem, Vulcan adopted a browser-based claims management system from CSC to allow safety personnel from the company's divisions to electronically submit the information.

Chilcoat's department linked that to the employee database so that much of the required information, such as the employee's address, would be automatically filled in on the claims form when the employee's name was entered.

"It cut down tremendously on duplication; it cut down on errors being entered, and it streamlined the whole process, so that our people in this department who were having to key in the data were freed up to do higher-level tasks related to that claim," Chilcoat said. "They have more time to really be focused on the claim itself, and get more details and ask more questions and spend more time managing the claim, rather than having to sit at their desk entering claim information."

Then, working with the corporate safety, health and environmental department, Vulcan decided to expand the type of information collected on the reports in order to better track injury trends and so prevent future injuries.

"Already for workers' comp purposes, we were reporting whether (the injury) was a hand or an arm, but we took it to another level with their help to say the right hand was injured in this piece of equipment and this is what the person was doing when they were using this equipment," Chilcoat said. That additional information allowed the safety staff to analyze the data for trends across the company, such as, "Were certain injuries more likely on certain pieces of equipment being used in a certain way?"

"They were able to develop better safety procedures when they found such a trend," she said. That trend analysis, added in with other measures the company was taking, helped Vulcan to improve its safety rate.

"Within a five-year period we reduced our workers' comp claims by about 40 percent," Chilcoat said. "Not only is the information more accurate, but we also reduced the number of claims because we allowed our safety people to see reports and information that they had not been able to see in such detail before. It was a joint effort between our department and our Safety, Health and Environmental Department."

As a bonus, the new process allowed Vulcan to demonstrate to its underwriters in a very detailed manner that it is carefully and effectively managing the risks associated with mining and obtain more favorable premiums.

--By Michael Fitzpatrick

Owner
Pacific Construction Management Inc.
Riverside, Calif.

One-stop shopping for an effective defense strategy in construction defect cases: beating the lawyers at their own game.

Construction defect lawsuits are an unavoidable part of the building business. They are also a lucrative business for plaintiff's attorneys who have built up a lot of expertise and earned a lot of money in such cases. These cases can, however, pit well-funded attorneys against builders with little experience in defending themselves. Scott Vivian wanted to level the playing field a little.

The owner of construction defect litigation consulting firm Pacific Construction Management International, Vivian used his background as an expert witness in these cases to develop a rapid response and loss mitigation service for developers and subcontractors to help them limit losses, avoid errors in dealing with homeowners, take advantage of right-to-repair laws and fight back effectively in court.

"His company's loss control program is innovative in ways that (could only come from) someone who built a contracting business, worked as a forensic expert witness representing a few thousand of the 8,000-plus cases his firm has handled and as a licensed building inspector," Brenda Sherman of Arizona brokers Brown and Brown Insurance wrote in her nomination.

Vivian's consulting company got its start in the early 1980s when an attorney was looking for an expert witness in a construction case and looked to Vivian because of his background as a licensed general contractor with experience in projects worth hundreds of millions of dollars. That was his entry into this niche business.

"I ended up dealing with so many lawsuits that my firm won the Inc. 500 169th fastest-growing company rating in 1995 and in 1996 the 150th," Vivian said. "During that time I was dealing with and representing both general contractors and subcontractors, and I became very familiar with the judicial system, insurance and the business of litigation in construction."

Vivian later started an insurance company offering wrap coverage for residential contractors, but with the downturn in the market he could not obtain sufficient premiums to protect the insureds and suspended the company in December 2007.

The loss-control techniques he developed, however, form a key part of his continuing consulting business.

"I have the plaintiff's defect list. I know from hundreds if not thousands of these projects that they use these defect lists over and over and hunt for the same problems in structures," Vivian said. "The homes that my insurance company was writing, I was collecting a set of photographs that would prove that the defects weren't there."

By collecting evidence to counteract lawsuits that might be filed later, Vivian was able to convince the plaintiff's attorneys to either not take a case or to agree to let the contractor proceed with repairs under the right-to-repair laws.

Without an established loss-control program, however, builders have to navigate the unfamiliar legal terrain by themselves.

"Generally, it's a fragmented market. They look for a defense attorney, an expert firm, a construction testing company and they try to pull together some claims approach and they really do not know what they are doing," Vivian said. "They may irritate the homeowners and the plaintiff's attorney has a great opportunity to ignore the right-to-repair statute."

Vivian said his consulting business now provides one-stop shopping for developers and subcontractors facing a construction defect lawsuit.

"I'm the only one who has a complete program for a developer to make one phone call and all of the services are provided: the attorney services, adjusters, CPAs everything," Vivian said. "We know the law. We know construction and the construction defect business."

--By Michael Fitzpatrick