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/.
Have a great day.
Jack
Jack P. Gibson
President
IRMI
Sanitize Your website To Avoid Underwriter
Fears—Underwriters routinely visit the websites of their
customers and prospects to get a better handle on their operations
and the risks they present. Of course, most websites 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 website
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 website 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) website 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:
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, NY
- 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, TX
- 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, CA
-
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, PA
-
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, WA
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