IRMI Update—Issue #54
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
December 3, 2002
In This Issue
Colleague,
Last summer, IRMI held several seminars on using captives to solve insurance
challenges for middle market companies. This series was such a success, we will
present it again early next year.
The program will help middle market companies solve hard market problems
with sophisticated alternative risk transfer (ART) programs. Kate Westover and
Bill McIntyre did such a fantastic last time, that the seminar received dean's
list quality grades (a 3.79 average out of a possible 4.0) from the nearly 200
people who attended. They've made a few adjustments in the agenda based on the
feedback we received, and we're ready to do an even better job this time around.
"Captive Insurance Solutions for Middle Market Companies" is an intensive
and focused learning session for financial officers, risk managers, association
executives, consultants, and agents/brokers who are considering forming a captive
insurance company, participating in an existing group captive, or utilizing
a rent-a-captive on behalf of a midsize organization. For more information or
to register, go to http://www.irmi.com/seminars.
Have a great day.
Jack
Jack P. Gibson
President
IRMI
Sanitize Your Web Site To Avoid Underwriter Fears—Underwriters
routinely visit the Web sites of their customers and prospects to get a better
handle on their operations and the risks they present. Of course, most Web sites
are maintained by corporate marketing departments with no concept of how an
underwriter might perceive the information displayed there. The unfortunate
result is sometimes a terrified underwriter along with higher insurance costs
(or no insurance at all).
For example, I ran into this recently when a contractor's Web site had photos
of condominiums and a power plant despite the fact the firm does no residential
construction and didn't routinely work in power plants. The underwriter considered
not providing a quote until we explained that someone in the marketing department
put these photos on the Web site because they were "cool shots," not because
they had anything to do with the contractor's normal operations.
To avoid unnecessarily complicating your renewal process by steering the
underwriter in the wrong direction, carefully review your firm's (or your client's)
Web site with an underwriter's eye. Then eliminate or change anything that might
raise a red flag. This will be time and effort well spent.
By: Steven D. Davis
Director, McGriff, Seibels & Williams
Birmingham, AL
E-mail: sdavis@mcgriff.com
Suggest a Risk Tip. Future issues of IRMI Update will include more risk tips from our readers. Send
us a practical tip (less than 300 words) for identifying and managing risks,
buying insurance, managing claims, or filling gaps in insurance coverages. We'll
give you credit for your contribution.
There are now 363 articles on IRMI.com, and many more are in production.
Below you'll find summaries of some recent additions with links to the articles.
-
The Sarbanes-Oxley
Act of 2002: Expanded Whistleblower Protection—Paul Siegel discusses
the employment-related provisions, procedures, and implications of the recently
enacted "whistleblower" act, which became law July 30.
-
Practical ERM Applications:
Capital Allocation—In this article on enterprise risk management,
Jerry Miccolis outlines a process for assessing capital adequacy using the
insurance industry as an example.
-
Changing Information
Technology (Part 1)—In the first of two articles, Martin McGavin
examines new risk management information technology and illustrates its
advantages.
-
Grammar at a Glance—How
would you rate the punctuation and grammar skills of the employees at your
company? Gary Blake provides a short mini-assessment to help you evaluate
these skills.
-
The Value of Safety—In
a continuing series on construction safety, Ron Prichard discusses why safety
deserves placement in an organization as a value, and some of the obstacles
to be overcome.
Navigating the Workers Compensation
Residual Market—Christine Fuge overviews the types of residual market
mechanisms available in the various states, including information about coverages,
contacts, and factors to consider when considering that route.
Construction Risk Conference Audiotapes Make Learning
Easier—Nineteen workshops and seminars from the 22nd IRMI Construction
Risk Conference are now available. Learn about umbrella insurance problems,
OCIPs, workers compensation claims management, project professional liability
insurance, insuring work in progress, and much more during your daily commute!
At only $12 each, they are very affordable, and you even have access to the
session handouts!
New IRMI Classification
Cross-Reference—We've updated and improved the Classification Cross-Reference. Now in
its eleventh edition, this popular tool contains a master cross-reference sorted
over 10 different ways—alphabetically then numerically by workers comp codes,
CGL code, NAICS code, SIC code. In addition to the NCCI codes, 7 different state
workers compensation codes systems are included. Follow the link for more information
or to purchase the
Cross-Reference.
In IRMI Update #53, Jack Gibson discussed
automatic external defibrillators (AEDs), the device used to jump-start hearts.
With recent availability of these devices to businesses, the question of risk
arises. Readers were asked to share their experience with AEDs. Below are a
few of the responses received.
- When I joined Plaza Construction 4.5 years ago as the Company Safety
Director, I was determined to get a defibrillator program in use at our
office. The first year an AED was purchased, only a few employees were interested
and had no real drive for the program. Everything changed last May when
a laborer was in the office and collapsed with sudden cardiac arrest. We
saved a life that day and this one use stimulated all our employees to get
involved. We now have 95 employees trained in American Red Cross CPR with
the AED training. Plaza is the first construction company in New York to
have on its construction site (as a pilot program) an AED machine. All Plaza
Construction staff members on the job site are trained to use this life
saving equipment in the event of a sudden cardiac arrest.
—Mary Ellen Sacchetti, Safety Director, Plaza Construction,
New York
- A Good Samaritan would be the term for someone who was involved in applying
the AED to use for a stricken person. If all other training and defense
techniques are argued out, the person could still be covered under the Volunteer
Protection Act of 1997, Public Law 105-19 H.R. 1167 105th Congress. This
provides Federal Immunity for persons who are performing an act without
malice or criminal intent. I'm still in favor of training and familiarity
with the unit, even though the AEDs have been made with all intentions of
overcoming the idiot factor to know when and when not to apply the shock,
and how to position the pads properly.
—Gary Sawyer, Sawyer Insurance Services, Garland, Texas
- We've recently purchased AEDs and put our safety team members through
AED training at all four of our main office locations (number of employees
at each location ranges from 75 to 350). We have had no incidents in the
past where AED use would have been appropriate, but we figured we'd rather
be safe than sorry.
—Lyn Martin, Risk Manager, California Casualty Management
Co., San Mateo, California
-
I have no success or horror stories however I do have a client who offers
social services to the elderly. One of their funding organizations was willing
to provide a defibrillator and training to staff for free. My client wanted
to know the carrier's position and if there were any additional liabilities
associated with accepting the defibrillator.
My thoughts concurred with yours. In today's environment, and working
with the elderly, I thought that the organization could easily be criticized
for not having one available. The carrier had no issues as long as the person
administering the device was properly trained.
—Louise Flemming, CPCU, Director of Business Development,
AV Consultants, Inc., Wayne, Pennsylvania
-
The purpose of my message is to let you know that Automated External
Defibrillators (AEDs) do save lives. In response to your Nov. 19 article
on the importance of having AEDs in the workplace, I share with you how
an AED impacted the employees at GuideOne Insurance.
Earlier this year, an employee of GuideOne Insurance, the nation's leading
insurer of churches, collapsed while at work. When co-workers found her,
she was in cardiac arrest. The company's AED was retrieved from the first
aid room and applied to the patient. An employee trained by the American
Heart Association in the use of an AED, successfully defibrillated the patient.
GuideOne was one of the first companies in Central Iowa to place defibrillators
in its buildings as part of the City of West Des Moines Emergency Medical
Services Public Access Defibrillation Program. Since this incident, the
company has proactively placed these life-saving devices in all of its branch
office locations, trained Emergency Response team members on their use,
and maintained employee certification per state requirements.
Speaking from experience, whether you end up using an AED in your workplace
or not, knowing that you have the ability to save a team member's life is
worth much more than the cost and time invested in purchasing AEDs and training
employees.
—Jim Wallace, President and Chief Executive Officer,
GuideOne Insurance
- I just got back from a trip east and was able to review the last two
IRMI Updates. One of them dealt with your call for shared experiences with
AEDs, and I read with interest the story of the New York construction firm
whose safety/risk manager had a good story to tell.
But as risk managers (or, at least, people committed to the process that
bears its name), shouldn't we be thinking about loss prevention far back
up the chain? In the case of cardiac arrest, it generally means that underlying
conditions in the form of coronary artery disease exist sufficient to trigger
an event. To be sure, many of the unfortunate victims are already under
the treatment of a physician and should be carrying the appropriate medication.
But an alarming number of people who die have absolutely no idea that
they are at risk in the first place. When I think of construction workers
in New York City, my mind conjures on the hard-hatted gentlemen from the
seventies, bellies hanging over beltlines, harassing war protesters as they
paraded through the streets of New York. An admitted over generalization?
Yes. But stay with me, for there is a grain of truth here.
Many construction workers are, by physical conditioning alone, ill-suited
to the rigors of construction risk (lifting, climbing, balancing, etc.).
Even those in so-called good condition could be at significant cardiac risk
because, while their muscles may be fit, their hearts are not.
The point of all this is that the use of AEDs at the construction workplace
could be reduced to practically zero, if employers provided employees with
stress-EKGs. I say "stress"-EKGs (i.e. a true, treadmill-based stress test),
because it is only under the strain of exercise, with the heart pumping
vigorously, that many of the underlying causes of catastrophic cardiovascular
events can be detected. So-called "at rest" EKGs regularly performed during
routine physical exams, often fail to uncover potentially fatal conditions.
Stress tests are very expensive, easily several hundred dollars for each
administration, so I am open to the charge of pie-in-the-sky remediation,
i.e. an uneconomical prescription of how to treat the risk of cardiac arrest
on the construction jobsite.
But think again: if every construction worker were to have a stress test
administered as part of a routine physical, as opposed to the at-rest variety,
the cost of the personnel and equipment to administer the test becomes amortized
over a larger number of applications, with a resulting decline in average
cost. Weigh this against the cost of death and disability and then factor
in the value to the family of a good life saved.
Finally, to be completely forthright, early detection of cardiovascular
disease forces us to consider the cost of treatment when underlying conditions
are discovered. In many cases, to be sure, the treatment consists of medication
and dietary/lifestyle change. In more serious cases, surgical intervention
is warranted. But I don't think that these significant costs should deter
us from considering the benefits of knowing what is going on inside the
bodies of working people who need well-functioning cardiovascular systems
to perform their jobs safely and effectively. Thanks for "listening."
—Richard E. Schmidt, Insurance and Risk Management Consultant,
Redmond, Washington
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