RISK MANAGEMENT/INSURANCE PRACTICE SPECIALTY NEWSLETTER RM/Insight AMERICAN SOCIETY OF SAFETY ENGINEERS Fall 2001 Vol. 1, No. 1 Career Risk Management www.asse.org Manage your career during an economic downturn In This Issue (or what do I do when my company is going belly up?) By George W. Pearson, CSP, ARM Career Risk Management 1 T his is the first of a Career Risk Management series of three articles, entitled The Crisis: Managing the Transition and The Safe Landing. They industry jobs were eliminated in the first half of 2001. Analysts do not expect the sector to recover for 12 to 18 months. describe three crucial phases in a safety professionals If you are working for a company that faces a sim- career that follow an economic crisis. They are based ilar fate, this downturn does not occur overnight, but on lessons learned from the authors real-life experi- over time. There is cost-cutting, staff reductions, Administrators ence of going though a work-life crisis that was trig- operation consolidation and project cancellations. Message gered by an economic downturn. These ideas are Before bankruptcy, the banks step in to supervise the 2 offered as an object lesson for safety professionals for cash flow; in other words, they say who gets paid, their own career risk management. how much and when. Your safety supply vendors are being paid in installmentsand many are demanding The Crisis to be paid in advance. In early 2001, it was clear things were not going well However, operations continue and exposures to On the Nightstand for the competitive telecommunication business. The loss remain a threat. Thus, the job of the safety pro- 3 Telecommunications Act of 1996 was expected to fessional remains critical. Motor vehicle accidents stimulate competition among local telephone compa- still occur, equipment mysteriously disappears and nies. Enter the competitive local exchange carrier claims frequency can rise. Property loss prevention (CLEC) with a promise to spend a lot of money and environmental protection remain concerns. In building out a network and providing high-speed other words, things still need to be done to protect Risk Management local, long-distance and data services. people, property and the environment. OSHA does vs. Investors went on a buying binge on the promise of not stop inspecting when a company is on the finan- Compliance high returns, but their expectations were too ambitious. cial ropes, and injuries and illnesses still occur. 4 The industry accumulated a horrendous debt and the This is a difficult and stressful scenario for any customer base did not develop. Wall Street became safety professional who has to manage a program in reluctant to continue its exuberance, and with limited an economic downturn and still maintain effective- access to capital, many CLECs are now in economic ness. This article highlights a true-life experience crises (with several entering Chapter 11 bankruptcy). and offers tips to others who may have to endure this Managing Risk According to the Washington Times in July 2001, in the future. If you are not sure this is happening to During Uncertain some of the 35 publicly traded CLECs were forced you, let me share a few hints. Times into insolvency, including three of the five located in The stock price plummets from $100 per share to 7 northern Virginia: E.Spire, Teligent and Winstar. They below $2 per share in nine months. also report that some 130,000 telecommunication continued on page 6

Administrators Message The Impact of Change A sI grasp the gavel and RM/I Division is a practice specialty and serves as one of the Societys leaders in membership, resources for safety infor- tantly its commitment to safety, is essen- tial to having a safe workplace; safety culture plays an important role embark on mation, risk management trends and con- to having a successful outcome; my term as cerns, andmore safety professionals needed to broad- Willie Nash Jr. the Risk specificallyinsurance industry changes. en our knowledge of the various Management/Insurance (RM/I) Adminis- Speaking of which, what impact has approaches and concepts of our profes- trator, my first order of business is to the recent workers compensation rate sion to succeed. thank outgoing Administrator JoAnn Sul- increase (20 to 40 percent; or overall This required greater and instant livan. JoAnns dedication to ASSE as increased insurance cost) had on your access to the numerous resources that well as her leadership and participation company and, even more directly, your had become available by way of the in RM/I over the years have contributed duties as a safety professional? It seems computer and Internet. Additionally, we greatly to the growth and successes of as if it was just yesterday that our roles were required to enhance our awareness each. Additionally, as a friend, mentor changed because companies were of the risk management discipline, to and peer who shares the responsibility down/rightsizing. Over the yearspartic- broaden our education, and to consider for my joining RM/I, she has greatly ularly in the 1980ssafety professionals obtaining professional credentials such as influenced my role and participation in were asked to assume more responsibili- the CSP, CPCU, ARM, CHMM, CHCM the Society. ty in their positions. Once upon a time, and CIH. we as safety engineers simply asked, Changes What are you doing to reduce injuries? The Impact I believe it appropriate to take a moment Now we are safety professionals who What impact do these changes have on to reflect on my first introduction to are asked to participate in budget deci- us as safety professionals and on the ASSE. It was in the late 1960s and early sions with regard to safety and claims Society? 1970s, when our primary focus for and/or injury cost reduction, conduct addressing safety concerns was to apply training and protect the public image of Safety Professionals the principals of Heinrichs domino theo- our companies. The change in RM/I leadership has little ry or triangle of occurrences. For those The OSH Act of 1970 not only to no impact on the role of the practice who thought we were forward-thinking changed how safety professionals viewed specialty and/or its members to the Soci- or more sophisticated, there was fault safety, but for the first time established ety. My goal is to assure you, as mem- tree analysis with its and/or gates. Acci- federal legislative means of contractor bers of this practice specialty, that you dent trending, lost-time injury and management accountability with fines will be kept abreast of enhancements and reportable injury analyses were based on and penalties for failure to protect work- innovative changes in our profession and per million manhours worked and ers. Although initially rebuffed in its ap- Society updates. ANSI calculations rather than OSHA. proach and viewed as a policing agency, As always, your support and input as My first PDC had hundreds in attendance OSHA today involves contractors and RM/I members is not only welcomed but (as opposed to thousands), and the Soci- trades and looks to ASSE for assistance expected since this provides a greater ety had far less influence in safety stan- in developing its standards. Each political vision of todays ever-changing events. dards/regulations development. Our group in office now takes a position on JoAnn will continue to provide valuable primary sources of safety information worker safety and standards, including input. In addition, her active involvement were outdated books, and many of us allocating annual budgets. in the Risk Insurance Management Soci- had copies of various ANSI standards on The 1990s brought in an era of safety ety will give us considerable insight on our bookshelves. as a course of study at many colleges and the risk management aspect of insurance Approximately 10 years ago, JoAnn, universities, and provided opportunities and safety. Mike McKeon and Tim Brun approached for safety professionals to develop many However, I strongly recommend that me at the PDC in Minneapolis, asked me techniques to address safety in the work- we each take a moment to assess our to join the RM/I Division and serve on place. We learned that: positions and roles within our companies. the Advisory Committee. Today, the Management, and even more impor- I refer back to an article I wrote last year 2 Fall 2001

for this newsletter, Are You Ready? sight of our importance to all those who 2001-2003 and ask again . . . are you ready? are depending on us. RM/I The dot.com industry has taken a Practice Specialty Officers dramatic hit; this is having an echo effect The Society on other industries. Will this affect you in While other professional organizations ADMINISTRATOR roles in determining the path of safety in Willie Nash Jr., CSP, CHCM some way? 415.512-6174 The new administration is establish- society have slipped somewhat, ASSE is willie_nash_jr@ars.aon.com ing its own agenda regarding legislation at the top of its game. Over time, the pertaining to cost, standards, ADA and Society has become a major player and ASSISTANT ADMINISTRATOR Project Labor Agreements the previous resource for safety information and tech- Steve Nyblom, CSP, ARM, ALCM administration approved. Have you niques. Its Board and committee mem- 818.598.0455 researched how and if any of this will bers, with input from its diverse societal steve_nyblom@ars.aon.com affect your company? membership and political contacts, have Since diversity, societal and political strategically addressed the many changes NEWSLETTER EDITOR risks are having immediate impact on our brought before them. Michael C. McKeon, CSP, ARM companies and jobs, have you considered The Societys outreachonce mostly 319.934.3892 domestic in natureis now global. More what you need to do to ensure that you mmckeon.netins.net can appropriately address your compa- international attendees participate in nys challenges from the risk manage- PDCs each year and the opening sessions AWARDS & HONORS CHAIR speakers are more renowned than ever. Steve Nyblom, CSP, ARM, ALCM ment, loss control or safety perspectives? Recognizing the realities of our Through its many authors, journal and everyday lives, each company should newsletter articles, the Society continues PDC PLANNING CHAIR now have in place workplace violence to serve as a major resource for its mem- JoAnn Sullivan, CSP 602.337.6249 and crisis management plans. Do you bers. OSHA and other regulatory agen- JoAnn.M.Sullivan@marshmc.com have a role in this as the companys safe- cies depend on ASSEs input with regard ty professional, and is it well-defined? to changes in regulations, standards and LONG-RANGE PLANNING CHAIR Plain and simple: To remain methodologies for improving work place Willie Nash Jr., CSP, CHCM employed, the impact of these issues safety. To retain this strong position, the requires each of us to be better-educated, Society is looking to each of us to do our NOMINATING CHAIR more-knowledgeable and effectively pre- part in preparation and with involvement. Michael C. McKeon, CSP, ARM pared to address all the various aspects of this profession. We and ASSE are the NEWSLETTER LAYOUT & DESIGN leaders of our profession. Lets not lose Susan Carlson ASSE headquarters staff scarlson@asse.org American Society of Safety Engineers On the Nightstand 1800 E. Oakton Street By JoAnn Sullivan, CSP Des Plaines, IL 60018 www.asse.org Former RM/I Administrator JoAnn Sulli- force field analysis. Wright applies that van is here more than just in spirit. She process to the decisions and acts of indi- RM/Insight is a publication of the has agreed to continue her popular On viduals and peoples in history. Applying American Society of Safety Engineers the Nightstand column. logic to each major age of human develop- (ASSE) RM/I Practice Specialty, 1800 ment, he finds that current ideologies, E. Oakton St., Des Plaines, IL 60018, Nonzero: The Logic of Human Destiny by technological advances and the success of and is distributed free of charge to Robert Wright, (Pantheon 2000). The democratic systems were inevitable. This members of the RM/I Practice Special- author does not believe in the chaos theory is a very well-researched and thought-pro- ty. The opinions expressed in articles or randomness of history or human evolu- voking work. herein are those of the author and are not necessarily those of ASSE. Techni- tion that some historians/ anthropologists For those who work in the critical risk cal accuracy is the responsibility of the have postulated. He feels there is an aim areas, loss control and/or crisis manage- author. Please send address changes to and uses the logic of zero sum and a ment, Wrights book should be of interest ASSE at the address above; fax to (847) nonzero sum game theory to the develop- as his non-zero-sum philosophy includes 768-3434; or e-mail to customer ment of our complex cultures and civiliza- a fitness-for-survival perspectiveim- service@asse.org. tion. If you took philosophy in college you portant in the safety, occupational health will recognize truth tables, a precursor to continued on page 8 RM/Insight 3

Program Management Risk Management vs. Compliance: A Question of Balance By Mark Briggs, CSP, ARM E very company and organization must explore the balance between compliance with mandatory regulations and the need to protect employees and the harm. The companys safety efforts evolve from an attitude of if only we could comply with the regulations to a realization that much more is required. National Institute for Occupational Health and Safety (NIOSH) Society for Automotive Engineers (SAE) company from risk. Decisions must be Underwriters Laboratories (UL). made regarding the proper level of effort Incorporation by Reference aimed at enhancing workplace safety once A quick read of OSHA standards might Additional Regulatory regulatory compliance is achieved. OSHA give a false sense of security regarding Requirements standards detail minimum legal require- the level of safety within a company, and Aside from OSHA, a variety of regula- ments, yet often fall far short of ensuring even with the level of regulatory compli- tory agencies impact the safety profes- employee safety and controlling risk to the ance. However, the standards themselves sion. These include related disciplines company. Excepting the General Duty are the proverbial tip of the iceberg. such as environmental and transportation Clause, many operations and activities are Included within many OSHA stan- agencies. Additionally, local and regional unregulated or inadequately regulated. Companies that have established safe- dards are notations regarding standards of other federal agencies, as well as those agencies such as the municipal fire department, the building code compli- ty programs and are of organizations ance division and the local health depart- ready to move not affiliated with ment may impose specific requirements. beyond compliance, the government. Building codes, fire codes, food ser- as well as those in Decisions must be made regard- These standards vice standards, environmental require- the initial phases of ing the proper level of effort are incorporated ments and transportation issues are just a safety program simply by refer- few of the safety-related issues that may development, aimed at enhancing workplace ence and have the safety once regulatory compli- be regulated by agencies other than should develop a same force and OSHA. These agencies may develop detailed risk man- ance is achieved. effect as those their own standards or may adopt all or agement program. standards that are portions of existing consensus standards. The purpose of this explicitly detailed. An example is the adoption of NFPAs exercise is to ensure a comprehensive The mandatory provisions (containing Life Safety Code by many governmental review and analysis of the companys the word shall or similar mandatory entities to regulate related issues within exposures with the intent of ensuring that language) of those standards are adopted their jurisdiction. adequate controls exist. Regulatory com- as standards under the OSHAct (see 29 It is the safety professionals responsi- pliance, conformance with consensus CFR1910.6). bility to seek out any agency that may standards, coordination of insurance cov- By virtue of this method of incorpora- have jurisdiction over the companys oper- erages, integration of corporate policies tion, safety professionals must be famil- ations in order to determine the nature and and adherence to industry practices are iar with a myriad of standards from a extent of this regulatory requirement. considerations during this process. wide variety of organizations simply to achieve regulatory compliance. These Risk Management vs. include: Going Beyond Regulatory Compliance American Conference of Govern- Regulatory Compliance Every company has a natural progression mental Industrial Hygienists (ACGIH) Even after addressing compliance with related to safety and risk management. American National Standards Insti- all applicable regulatory requirements, Management at many growing compa- tute (ANSI) each organization must evaluate its own nies mistakenly believes that compliance Agriculture Ammonia Institute-Rub- operations and exposures in order to with the plethora of regulatory standards ber Manufacturers Assn. (AAI-RMA) determine whether additional action is is sufficient to ensure a safe workplace. American Petroleum Institute (API) prudent. If regulatory issues are unclear, However, as companies mature, most American Society of Mechanical this may be the huge gray area that truly realize that these regulations offer mini- Engineers (ASME) challenges the safety professional. Lack- mal standards in many instances. Indeed, American Society for Testing and ing the impetus of regulatory require- the standards fail to address many Materials (ASTM) ment, some organizations fail to address aspects of the operations that expose Compressed Gas Assn. (CGA) non-mandatory consensus standards and employees and the company to potential National Fire Protection Assn. (NFPA) industry-practice issues. This often 4 Fall 2001

proves to the bane of an otherwise effec- for management commitment and to insulate a company from unanticipated tive safety and risk management effort. employee participation in companys financial risk. In all cases, these purchase Although failure to comply with regu- safety efforts in 1989. At that time, the decisions should be an integral part of latory standards may indeed lead to fines agency issued the Safety and Health Pro- the companys comprehensive risk man- and sanctions against an organization, gram Management Guidelines, which agement plan. Working with your carrier these often pale in comparison to the detail the basis of an effective safety or broker during the development of the exposures from other parties. In todays effort. Although this is elementary to a risk management plan ensures coopera- litigious society, it is often the actions of successful safety and risk management tion and coordination, and avoids dupli- an unrelated third party that result in a program, many professionals would do cation of efforts. significant loss to a company. well to review the information with man- While the purchase of insurance is a Therefore, the safety professional agement and production employees. complex topic, the general intent in buy- must take reasonable measures to rou- If a safety program is to succeed, the ing a policy is to minimize the financial tinely assess the expectations of the safety professional must educate not only impact of a potential loss. Additionally, industry and society to ensure that his/her exposed workers, but also the entire com- some insurance is frequently required by company is taking prudent care to avoid pany. The line worker must understand statute, as is often the case with workers injuring others. This is accomplished in why s/he is being asked to do something, compensation coverage. The goal of the various ways, including regular review of and management must appreciate the risk manager is to minimize the need for industry-wide and industry-specific trade total impact on the company if necessary insurance policies by taking proactive journals, general awareness of the busi- actions are not taken. This approach measures to minimize the likelihood of a ness climate locally and nationally, and extends you beyond the traditional role loss. This is true for all types of insur- participation in local and national profes- of safety director and establishes you ance. In those cases where risks cannot sional associations. Information gathered as a risk manager. As a result, your value feasibly be controlled or eliminated, the from these resources is used to develop to the company is greatly enhanced. purchase of a proper policy will protect the base knowledge, which is used as the All policies, procedures and safety the company. foundation during decision-making action plans should be completed with When the risk management plan and processes. Summaries of legal proceed- the goal of integrating safety and risk appropriate insurance coverage are in ings, a review of editorials and letters to management into the core values of the place, continue to work with carriers to the editor in local publications and company. This is usually most easily monitor company activities and related involvement with civic groups are addi- achieved by involving representatives exposures. This will allow you to imple- tional sources of information to continu- from all levels of the company in the ment changes in the plan or policies as ously reinforce this foundation. development phase. This allows the the need arises. Request that your insur- financial officer as well as the production ance carriers participate in your efforts. Integration of manager to participate and provide valu- This may involve various activities, able input. including claims review, loss control sur- Company Policies & Procedures Successful integration of safety efforts veys, production and management train- Many safety professionals find that the into the core values and goals of the ing or consultation with legal counsel. difficulties associated with knowing and organization is the only means of ensur- understanding regulatory requirements ing a quality, continuing safety effort. Conclusion minimal compared to the effort involved Risk management and safety efforts must in integrating these requirements into reach far beyond basic regulatory com- their companys operations. The political Integration of Insurance Coverage pliance in order to be fully successful. It nature of many firms, compounded by is the integration of regulatory standards differing perspectives, priorities and Purchasing an insurance policy is one of many approaches that can be employed compliance efforts and successful risk goals make this integration a challenging management techniques into a compa- proposition. nys culture that creates an environment Without management commitment, in which the interests of the company, the safety professional will struggle to Resources and society are justly protected. This successfully integrate safety and regula- level of accomplishment is the founda- tory compliance into the core values of OSHA Safety and Health tion for a successful, continuing risk the company. Therefore, the safety pro- Program Guidelines management effort. fessional must understand the companys www.oshaslc.gov/FedReg_osha_ operations and goals, as well as general data/FED19890126.html business practices. Too often, programs are developed programs, employees Public Risk Management Assn. trained and equipment purchased without www.primacentral.org a commitment from management to use Risk and Insurance these tools. Take the time to develop the Management Society Mark E. Briggs, CSP, ARM, is campus risk business acumen that will make these www.rims.org manager for the University of Illinois, Urbana. efforts successful. He is also the current Administrator of ASSEs OSHA formally recognized the need Consultants Practice Specialty. RM/Insight 5

Professional Issues Career Risk Management Be a Willing Resource er focusing on individual losses and continued from page 1 Help where you can. Be willing to accept open claims. expanded assignments (a decision that Do not overlook catastrophic expo- There are rumblings that the may be made for you when additional sures and high-risk operations. For exam- NASDAQ will delist your companys duties are being doled out). Accept the ple, motor vehicle operations on the stock, so it will no longer be a publicly assignments you are clearly competent ground, electrical safety in switch equip- traded company. in. For example, most safety profession- ment, and fall protection on rooftops and You get your news about what is als will have the skill sets to manage the towers were likely priority issues before going on in the company by reading the rudiments of environmental and security the crisis and should remain priority Washington Post. programs. Others will have experience in issues. To be effective, be onsite whenev- Your safety suppliers are not being claims management, and becoming gate- er possible. Investigate incidents as soon paid and will not deliver on orders unless keeper for all property and casualty as possible. paid by credit card. claims is not beyond the realm of possi- Maintain the viability of critical Your boss is laid-off and so are close bility. If you are asked to do things that equipment as well. This will no doubt co-workers. are outside the realm of safety manage- include uninterruptible power supply sys- Your property and casualty insurers ment, e.g., inventorying assets at closed tems and battery racks. Also sprinkler send notices of cancellation. facilities, help where you can. systems and clean gas suppression sys- tems need periodic maintenance and ven- So, Youre Having dors who provide those services should A Bad Day Dont Rearrange be given priority. (You may need to argue What to do? You can always look for the Deck Chairs on the Titanic to get them paid.) If your insurers are another job, but for practical reasons, this Establish priorities, know and do what is available, ask them to monitor these situ- may not be the right thing to do at this important. Work on mitigating threats to ations at sites you cannot visit. moment. For example, it will take time to the organizations solvency, but do not find another job. If you are a telecommu- overlook considering people, property and nications professional, the sector may not the environment. Learn how all this relates Facing a Transition be the right choice and you may have to to cash flow. Remember, lawyers, accoun- Although you may be facing a transition consider a career change; that may take tants and investment bankers (and soon the phase in your career sometime in the more time. Also, you may be offered a regulators) are managing your company. near future, your diligent attention to retention bonus and have to commit to Communicating in terms they understand your employers risks will bode well for stay to the end. Or, you may just want to will be more effective. Convert your termi- you professionally. Hopefully your fulfill a personal and professional com- nology from accidents, injuries and illness employer has benefited. The people you mitment to continue to be successful in to loss of assets, regulatory fines, business have been working with will more than what you doin good times or bad. interruption, extra insurance charges and likely speak well of you and be good ref- Assuming you choose the latter course, loss of service capability. erences. You at least have the satisfaction here are some suggestions that may help Address all imminent threatsinclud- that you did a good job. ensure your career and professional repu- ing those that seem obvious. OSHA is not tation stay intact, even when the compa- going to take a day off from conducting ny may not. inspections and issuing citations. This is George Pearson is an active member of the one area in which the safety professional International Practice Specialty Advisory Com- mittee. He resides in Ashburn, VA. Aim High can be a proven asset in defending the Manage your work life day-to-day. This company. Continue rudimentary training will help you manage the stress related to and orientation programs, if possible. Try Seminarfest Jan. 20-26, 2002 the aura of uncertainty that will prevail. to avoid giving up on the basics. Primm, Nevada Outside of work, engage in activities that You can also develop reports that will help you maintain good physical and show recent loss trends. Be sure to add This week of over 40 seminars features a spiritual health. It is important to also the economic implications of what the wide selection of seminars, one to three maintain an unimpeachable reputation graphics are showing. For example, a days in length, on technical, management and do good work. This lets others know good leading indication of future costs is and skill-development topics. Join us for that your role is important to you and to the trend in loss frequency. If you believe one day or enroll for the entire week. the companys survival. Sustain your that frequency begets severity, an increas- Earn up to 5 CEUs/CoCs for CSP exemplary level of job performance and ing trend may be relevant here. But, you maintenance. continue to be good at what you do. The may have to convince someone that your Participate in preparation workshops proof is in the delivery and you must conclusions are valid. They may not see for the ASP, CSP, CHST or OHST exams. maintain a high level of effectiveness. it your way when daily survival is the This can ensure that you are considered primary objective. For example, you may For more information, an asset to the organization. have to shorten your horizon and consid- visit www.asse.org. 6 Fall 2001

Program Management Managing Risk During Uncertain Times By Steven E. NyBlom, CSP, ARM, ALCM W e are living in a world of change. Facility closures, downsizing, business transformations, mergers and Labor unrest is sometimes associated with union strikes or negotiations but can occur with any type of workforce. Proper tigative unit should be notified in all cases where fraud is suspected. Incident investigation procedures must be fol- acquisitions, and labor unrest are among education of supervisors is essential. De- lowed for all cases. Investigations should issues being handled by industry today. escalation techniques should be under- be completed as soon as possible after How do you handle risk management stood and followed by all supervisors. the incident to obtain the most-accurate issues during these uncertain times? This Given the high levels of stress that can information. Refresher training for super- is a question facing many employers. be created during uncertain times, a firm visors on how to conduct an investigation Managing risk during uncertain times should plan for acts of workplace violence is appropriate as well. starts with control measures that should and industrial sabotage. This is true at all Within any facility, there are often be in place at all times. These include times, but is heightened given uncertain- known problem employees or high-risk active environmental, health, safety and ties. Increased security measures and edu- jobs. Increased attention must be paid to property protection programs (particular- cation for the supervisors is helpful. these known problems. ly identification and correction of unsafe One method of gathering information conditions and behaviors and adherence Handling Workers is to conduct exit interviews to screen to quality standards); attention to claim Compensation & Legal Claims employees in order to identify those who issues and medical case management; Workers compensation costs can be min- may be particularly disgruntled or may and compliance with regulatory con- imized with proper planning before lay- have been hurt on the job. Asking cerns. Quality supervision is critical. offs and closures. Some common employees if they have experienced a Facility closures present significant methods of helping employees deal with workplace injury that has not previously challenges given the number of people the stress of these situations are to offer been reported can help identify issues involved and the need for maintaining outplacement services (resume prepara- that could be handled through early med- historical records. Downsizing, layoffs tion, classes on interviewing skills, refer- ical intervention and treatment. Having and business transformations present sim- rals to other employers, job placement employees sign a statement that they ilar exposures as plant closures, but to a services), severance packages, employee have had no injury helps to discourage somewhat lesser degree. Developing and assistance programs and good communi- them from filing a claim later and can be communicating sound business reasons cation of the timing involved. Providing helpful from a defense standpoint. Pre- for the changes are essentialthis helps counseling and assistance in the comple- termination physicals or medical testing employees understand what is happening. tion of unemployment insurance forms is can also be considered to help document Federal and state regulations specify also helpful. employees physical condition before actions that must be taken for some facili- Actively managing claims is as impor- they are terminated. These can be han- ty closures or mass layoffs. For example, tant after layoffs and closures as it is dled through your medical clinic or by the Worker Adjustment and Retraining before. Medical case management and in-house medical professionals. Notification Act (20 CFR 639) requires regular communication with injured for- Preventing discrimination and wrong- employers with more than 100 full-time mer employees should be in place. Claims ful termination claims can be handled by employees to provide employees with at that are not managed properly have a ten- good communication, following existing least 60 days notice of closure or mass dency to become more expensive. policies and procedures throughout the layoffs. Consult a labor attorney for spe- Employees may become disgruntled if process, and having a legal review of cific governmental requirements. they know no job is waiting for them employee files for those who will be Mergers and acquisitions may include when they recover from their injuries. discharged. facility closures and downsizing, but most Medical providers must be made aware certainly will result in employee apprehen- that you are actively managing the claims. Handling Regulatory sion. Thus, communication is critical. The Your insurer should be placed on due diligence process is often not complet- notice to watch out for suspicious claims. Compliance & Record Retention ed very well prior to a merger/acquisition. Past claims should be reviewed for cases Regulatory compliance is an area that is The acquiring company should conduct a that have the potential to be reopened. often neglected if key personnel leave the comprehensive risk management survey of Fraud prevention and detection is also facility or if supervision is stretched to its all new facilities as soon as possible (if not important. Some employees may attempt limits by other needs. The need to retain completed before the acquisition). Prob- to file false or misleading claims in an key personnel is widely recognized with lem issues should be identified and miti- attempt to secure some degree of com- respect to key production positions, but is gated as soon as possible. pensation. The insurers special inves- continued on page 8 RM/Insight 7

On the Nightstand Managing Risk continued from page 3 continued from page 7 and environmental fields. His book deals often not considered these critical times. with a more scientifically founded history with respect to the Records to Retain Attempts should be of the survivability of humankind as peo- environmental, made to keep key ple deal with crisis risk management and health and safety Following a personnel at the controlling losses. professionals. The Facility Closure facility. Existing pro- The Future of Success, by Robert B. use of stay bonus- grams, policies and Reich (Knopf 2001). Once again the for- es can help in clo- Environmental reports procedures should be mer Secretary of Labor and college profes- sure situations. Industrial hygiene reports followed or sor has written a book that captures the During facility Employee exposure records enhanced. current ethos of our technology dependent closures, corporate Facility diagrams It is crucial that society. This is about the U.S. and how we knowledge is often Detailed job descriptions supervisors be prop- have exported not only our competitiveness lost as records are Personnel files erly educated. The but also our wanderlust. Reich sees the not properly retained Medical information including supervisors need to emerging systemthe combination of by the corporate enti- first-aid logs understand company immediate communication, the vast ty. These records are Employee handbooks and safety policies, procedures resources of the Internet and our desire to often essential during rules and safety rules, and get the best for the cheapest price as prob- legal or regulatory Material safety data sheets have the interper- lematic to corporations. Think about it as a proceedings that Training records sonal skills neces- complete blurring of the brand loyalty that occur after the facili- OSHA 200 logs and inspection sary to deal with the the big names used to have; value and ty has closed. reports employees. This is a value pricing attract customers for the Records should be Video of machinery and processes fundamental need in normal operation moment. Search engines allow comparison maintained where for supervisors, but Quality control records shopping and brand switching. Is this what they can be located many employers do we really wanted? as needed. Many a poor job in He also examines the need to leave records should not be this regard. cyberspace and have face-to-face, destroyed. Unfortunately, documentation Risk can be managed during these in-person, intelligent discourse as well as is a problem for many companies. If the uncertain times in which we live. We personal time for introspection. Reich is records are in the minds of your employ- simply need to plan in advance, consider concerned at the commoditization of ees (and not on paper), the knowledge will all options, enlist the help of others and human effort, skill and intellect at all lev- be lost. follow through on those tasks we know els and for all purposes. Especially inter- need to be done. esting is his discussion of risk sorting, a Conclusion phenomenon he feels is eroding social Many organizations do not properly plan insurance mechanisms, many of which for risk management considerations relat- were institutionalized in the 20th century ing to their needs during uncertain times. and are being dissected in the 21st. Steve NyBlom is the Assistant Administrator of The risk management and/or environmen- the Risk Management/Insurance Practice Spe- Reich looks at the real world facing tal, health, and safety departments are cialty and is a vice president with Aon Risk Ser- todays workers and their challenges in the often laid off or the personnel leave during vices in West Hills, CA. face of managing safety, health and envi- ronmental risks and crisis while controlling losses and coping with the quandaries that both employers and employees face in this new century. Also interesting is Reichs American Society of Safety Engineers PRESORT STD renewed interest in work-life balance. Its Risk Management/Insurance Practice Specialty US POSTAGE not the traditional dividing time approach 1800 East Oakton Street PAID . . . you will enjoy this book! Des Plaines, Illinois 60018-2187 PERMIT NO. 234 DES PLAINES, IL JoAnn M. Sullivan is vice president risk consul- tant for Marsh USA Inc., Phoenix. She is a for- mer administrator for ASSEs RM/I Practice Specialty. Explore ASSEs Online Community Visit www.asse.org to register.