The Risk Taker Roundup
Welcome
Mike HayDirector of Risk Assessment and Loss Prevention / Information Resources, State Office of Risk Management
Opening Remarks
Jonathan D. BowExecutive Director and State Risk ManagerState Office of Risk Management
Introductions
Mike HayDirector of Risk Assessment and Loss Prevention / Information Resources, State Office of Risk Management
Kallman Consulting Services
The Risk Taker Roundup Conference Discussion
on
Employment Practices LiabilityHosted by the Texas
State Office of Risk Management
Phil NortonPresident
Gallagher Strategic Risk Solutions
May 25, 2006May 25, 2006
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Employment Practices Liability:
The Exposure and its Trends
• Legal and Legislative Developments
• Class Action EPL Claims
• D&O Derivative Actions Following EPL Claims
• Trends toward Catastrophic Loss
• EPL Insurance Coverage Trends
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Factors Influencing EPL Losses
1. The Older Workers Benefit Protection Act of 1990 and The Age of Discrimination in Employment Act of 1967
2. The Civil Rights Act of 19913. The American with Disabilities Act of 1990 (effective 1992)4. The Family and Medical Leave Act (1993)5. The U.S. Supreme Court decision in Harris versus Forklift Systems, Inc.
(November 3, 1993)6. Class Action EPL Claims7. Market Capitalization Drop8. Derivative Action Possibilities9. Typical Claims Costs are Significant10. Catastrophic Claims are Becoming More Likely
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
EPL Perils to consider• Wrongful Termination (actual and constructive)• Breach of Employment Contract• Discrimination• Harassment (sexual and workplace)• Failure to Employ/Promote• Wrongful Discipline or Wrongful Demotion• Failure to Grant Tenure• Negligent Evaluation• Invasion of Privacy and False Imprisonment• Employment Related Misrepresentation• Defamation or Employment Related Libel/Slander• Wrongful Infliction of Emotional Distress• Retaliation (including whistleblower)
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Tracking EEOC Charge Filings
0
1000020000
3000040000
5000060000
7000080000
90000100000
1993 1995 1998 2000 2002 2004
EEOC ChargesRaceGender
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
The Gallagher Database on EPL Claims
• Research on Public Information - not client data
• Focus on Large Losses - $1MM or more– Approaching $5 Billion of Claim Costs in database
• All Losses are Post-1991 [Civil Rights Act]
• Mixture of Settlements and Verdicts
• Jurisdiction: half State Courts; half Federal
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Large EPL Claims By IndustryGeneral Services
14%
Retail17%
Manufacturing21%
Financial12%
Professional12%
Public Sector10%
Energy & Utilities14%
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Large EPL Claims by Type of Claim
7%
20%
7%
18%
14%
7%
15%
12%
0% 4% 8% 12% 16% 20% 24%
Retaliation
Wrongful Termination
Whistle Blowers & Other Claims
Age Discrimination
Gender Discrimination
Disability & Other Discrimination
Race Discrimination
Sexual Harassment
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Top 10 States for Large EPL Claims30
10
6 6
4 4 4 43 3
CA TX NY FL IL NJ MI OH DC MA
Note: numbers are percentagesNote: numbers are percentages
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Punitive Damages & EPL Claims
• About one-third of top $2.5 BL in large losses are due to punitive damages
• Of largest 150 claims, about half have punitive damages assigned
• Average percentage of full award that is punitive is about 35% for all large losses, but closer to 70%, if a punitive award is present!
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Statutes & Law Supporting EPL Claims
• Title VII
• Age Discrimination in Employment Act
• Americans with Disabilities Act
• Pregnancy Discrimination Act
• Equal Pay Act
• Family and Medical Leave Act
• Title IX
• State Fair Employment Practice Statutes
• Whistleblower Laws
• Municipal Statutes and Regulations
• Breach of Contract
• Wrongful Termination
• Negligent and Intentional Infliction of Emotional Distress
• Defamation
• Invasion of Privacy
• Tortious Interference with Contract
• Harassment
• Assault and Battery
• Negligent Hiring/Supervision
• Fraud and Misrepresentation
Statutory Common Law
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Some EPL Cases of Significance
• Voice of America• CALPERS• Coca Cola• Texaco• State Farm• Interstate Brands• Lucky Stores• Shoney’s• Publix• Home Depot• Microsoft• Farmers Insurance
• Denny’s• Miller Brewing• Triton Energy• Proctor & Gamble• Mitsubishi• Baker & McKenzie• Tishman Construction• General Dynamics• Hughes Aircraft• UPS• AT&T• Alabama DOT
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Trends in EPL Insurance• The EPL exposure, including potential for catastrophic loss, has
increased significantly since 1991
• Pricing started high (1992/1993) then declined (1997), rose again (2001-2003) and is now declining again
• Meanwhile, EPL coverage has been greatly improved:
– sometimes packaged with Loss Control consulting
– punitive damages covered
– no downsizing exclusion
– bilateral discovery offered
– no “intentional acts” exclusion
– simpler reporting requirements often available
– flexible selection of defense firms may be possible
– third-party claim coverage
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
The EPL Marketplace Today
• Cycle of Capacity starting to turn up– 1992 to 1997, 1998 to 2003, 2004 - 2009…
• Until recently, Loss Ratios historically > 100%• Carriers took action in 2003 with:
– Increased deductibles!– Premium adjustments– Coverage fine-tuning
Risk Management, Insurance and Loss Control are more important than ever!
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Responsibility for EP Compliance
82.0%
18.0%
5.0%
25.0%
2.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Human Resources Legal Risk Management Other No One
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Risk Evaluation and Loss Control – comprehensive auditing systems may be available– Prevention versus Reduction: Insurance is still key!
To prevent EPL claims, you should review your:
* Hiring Processes
* Employee Procedures
* Training Programs
* Performance Evaluations
* Termination Policies
* HR Operations
To reduce claims costs, you should review your:
* Insurance and Risk Transfers
* Claims Investigation
* Claim File Management
* Defense Controls
* Timely Notification
* Return to Work Programs
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Appendix
• Additional Information on EPL Risks
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
The EPL Insurance Policy
• Who is covered?– Directors & Officers– All Full-time Employees– Temporary Employees and Volunteers– Independent Contractors– The Corporate Entity and Subsidiaries– Students in a limited capacity
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Who can bring covered claims?
• Employees• Students• Applicants for hire• EEOC• State Agencies• Directors• Other individuals/entities acting on behalf
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Potential Exclusions
• Strikes, Lockouts• Downsizing• Willful or Malicious Intent• Willful failure to comply with
law• M/A activity• Bankruptcy• Class Actions
• Deliberate Fraud• W. A. R. N.• Benefits Due• Written or Express
Employment Contract• Workers Comp. Claims• OSHA• Securities Violations
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Coverages to Request
• Punitive Damages
• Back Pay
• Front Pay
• Pre/Post Judgment Interest
• Nonmonetary or Injunctive Relief
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Coverage Triggers
• Written Demand for Monetary Damages
• Civil Proceeding
• Arbitration Proceeding
• Administrative Proceeding
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Defense and Settlement Considerations
• Duty to Defend?
• Panel Counsel?
• Claims reporting threshold
• Right to Settle (esp. Hammer Clause)
• Reporting – When and How
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Rating EPL - The Exposure Base
• Number of Employees– U.S. versus Foreign– Full-time versus Part-time– Leased Employees– By state (especially CA, TX, and MI)
Phil Norton – Arthur J. Gallagher & Co.Phil Norton – Arthur J. Gallagher & Co.
Other EPL Underwriting Factors• The nature of the operations
• EEO-1 report
• Turnover
• Percentage of highly paid employees
• The quality of employment manuals and handbooks; the stated positions on the key practices and procedures
• Financial Condition
• M&A Activity
• Policy Wording Considerations
• Approach to Risk Management
• Litigation/Loss History - Claims experience is essential!
Break
Public Officials Coverage / Cyber Risk
Jean MoreauAIG
Security & Privacy Security & Privacy LiabilityLiability
Nick EconomidisVice PresidentProfessional Liability DivisionAIG/National [email protected]
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy LiabilitySecurity & Privacy Liability
AgendaAgenda
• Security & Privacy Exposures
• Traditional Policy Forms
• Security & Privacy Insurance Overview
• Questions
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
In the News…In the News…
2005 Disclosures of Data: disclosed incidents in the United States potentially affect more than 57 million individuals
Source: Identity Theft Resource Centerhttp://www.IDtheftcenter.org
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Identity Theft
In the News…In the News…
Data Breach
Computer Hacking
Lost Backup tapes
Stolen Laptop
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
“The online trade in stolen financial data is thriving.”
Countless Dens of Uncatchable ThievesApril 3, 2006New York Times
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
In the News…In the News…
Typical Disclosure IncidentsTypical Disclosure Incidents
• Bank data theft: 700,000 exposed
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Typical Disclosure IncidentsTypical Disclosure Incidents
• Major retailer: $16.5 million charge for losses due to a breach of computer security
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Typical Disclosure IncidentsTypical Disclosure Incidents
• Theft of laptop containing employee records
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Typical Disclosure IncidentsTypical Disclosure Incidents
• Social Security Numbers disclosed on mailing labels
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Typical Disclosure IncidentsTypical Disclosure Incidents
• Website allows access to restricted information
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Typical Disclosure IncidentsTypical Disclosure Incidents
• Financial information obtained from discarded records
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Key Exposures…Key Exposures…
• Credit card information
• Healthcare information
• Personally identifiable information
- customers- employees
• Business information of others
- Trade secretsInsurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Covered by Insurance?Covered by Insurance?
• Commercial General Liability
• Bodily Injury and Property Damage
• Personal and Advertising Injury
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Covered by Insurance?Covered by Insurance?
• Professional Liability
• In the performance of professional services?
• Personal injury exclusion?
• Dishonest acts exclusion?
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!• Negligent handling of private or confidential information
• Legal Liability
- “Pay on Behalf of” basis
- Duty to defend
- Defense within limits
- Defense cost coverage for certain regulatory actions (Subject to insurer’s consent)
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!
• Wrongful Act --
• Failure of the insured’s (computer) security
• Wrongful disclosure by an insured of private information
• An insured’s failure to protect private information
• Vicarious liability of an insured for a failure toprotect personal information by vendors
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!• Key exclusions --
• Dishonest Acts
- Officers or directors
- Employees (if officers/directors had knowledge)
• Misappropriation of trade secrets by an insured
• Contractual Liability
- Exception: obligation under a NDA Agreement
• Special Class Action Retention
• Greater of $100,000 or 200% of the standard retention
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!
• Policy Limits
• Limits: up to $15 million available
• Retentions: start at $25,000
• Minimum Premium: $3,500
• Submission requirements
• AIG netAdvantage application
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!
Policy application and materials
http://www.aignationalunion.com
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!
• Who needs this?
• Financial Institutions
• Healthcare Providers
• Retailers
• Payment Processors
• Data Processors & Information Services
• anyone handling credit card information!
• anyone with employees!Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Security & Privacy Insurance!Security & Privacy Insurance!
A Perfect Fit for Every Company!
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Questions?Questions?
http://www.aignationalunion.com
Thank you!Thank you!
Policy application and materials
http://www.aignationalunion.com
Please drive safely on your way home!!!
Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.
Nick [email protected]
Lunch
Thank You to Our Sponsors
Risk Assessment & Loss Prevention
Mike Hay
Sam Arant
Sally Becker
Lisa Bell
Joe Deering
Risk Assessment & Loss Prevention
Cherie Hughes
Lester Taylor
Benny Vanden Avond
Mary Loza
Sam Stone
SORM’s Insurance Program
• Directors’ and Officers’ Liability (Public Official Liability) Statewide Program
• Short-Term Special Event General Liability Program
• Statewide Automobile Insurance
• Volunteer Insurance Program
• Statewide Property Insurance
Thank You to Our Sponsors
RALP’s Services
• Accident/Incident Review and Analysis• Emergency Evacuation Program Development• Traffic Safety Programs• Education and Training Programs• Identification of Hazards and Employee Accident Exposures• Job Safety Analysis• Safety Inspection Programs• Back Injury Protection Training• Ergonomic Assessment and Training• First-Aid Program (Certification provided)• Hazard Communication Program (HAZCOM)• Hazardous Materials Management Program (HAZMAT)• Personal Protective Equipment Assessments• Industrial Hygiene Services
RALP Assists Agencies By:
• Identifying, evaluating, and reducing potential liability exposures and liability losses
• Reviewing risk management programs used by state agencies
• Assisting state agencies to implement effective risk management programs
RALP Accomplishes These Services By:
• Providing risk management guidelines• Administering on-site risk management program
reviews• Administering safety evaluations, consultations,
and training• Analyzing annual reports from state agencies on
loss information, existing and potential exposure to loss, and estimates of category of risk of losses incurred but not reported
• Providing agency outreach and training
Thank You to Our Sponsors
SORM 200
• The SORM 200 is the sole source for collecting statewide information from state agencies regarding their expenditures for risk management activities, insurance purchases and non-workers’ compensation claims made or settled against the agency.
• The intent of the SORM 200 is to capture costs associated with agency Risk Management Programs, and to compile information necessary for SORM to include the administrative costs of risk in the Office’s biennial report to the Legislature.
REPS
• The Risk Evaluation and Planning System (REPS) is a data collection and analysis tool intended to assist state agencies in identifying exposures to loss in various operational areas. REPS is comprised of three major sections. The “Risk Evaluation Survey” portion is intended to lead client agencies through a series of questions intended to identify exposures that could result in financial or operational losses. The “Frequency and Severity Analysis” portion of the survey calculates the probability and potential impact of exposures identified in the first section. The “Apply Mitigating Strategies” portion recommends mitigating strategies to reduce or eliminate losses from identified exposures.
Risk Management User Group
• The next meeting of the Risk Management User Group is June 20, 2006, in the William B. Travis Building from 8:30 a.m.-12:30 p.m.
• Agenda items include:– Emergency Responders Workers’ Compensation Consequences
– Lessons Learned from Hurricane Rita
– REPS Enhancements
– Exposure Claims
– How Insurance Works
– Avian Flu
• For more information, contact Cherie Hughes at (512) 936-1483.
Thank You to Our Sponsors
Agency Outreach & Training
• SORM’s Agency Outreach & Training section offers a variety of safety, health, risk management, and workers’ compensation training for state agencies.
• Popular courses include:– Additional Duty Safety Officer (ADSO) Orientation– Adjuster Prelicensing Training– Confined Space Entry– Defensive Driving– Training for Claims Coordinators – Level 1
• Find out more by clicking on the “Outreach & Training” tab at www.sorm.state.tx.us.
Risk-Tex Newsletter
• SORM’s quarterly newsletter keeps State of Texas agencies up-to-date on topics relating to risk management, workers’ compensation, and training.
• To subscribe, send an email to Risk-Tex Editor Sam Lawrence at [email protected].
Basic Fleet
Risk Management for Public Entities
The purpose of this document and any activities to its creation ("The St. Paul Travelers Activities") was to develop current underwriting information and/or to assist you with your legal responsibility to maintain safe premises, practices, operations and equipment. The St. Paul Travelers Activities do not cover all possible hazardous conditions or unsafe acts that may exist, are not legal advice, are not for the benefit of any other party and do not amend, or otherwise affect the terms, conditions or coverages of any insurance policy issued by The St. Paul Travelers . Implementation of any practices suggested by this document is at your sole discretion. The St. Paul Travelers disclaims all warranties, express or implied and assumes no liability to any party for any damages arising out of or in connection with The St. Paul Travelers activities.
The Exposure
Number ONE Cause of occupational fatalities• 3,000-4,000 workers die each year
A leading cause of work related injury• 200,000 are disabled• Costs average 3 X other injuries
One of the most frequent accident causes
One of the leading causes of third-party liability claims
Selection Placement Training Accountability Monitoring
Components Of The Auto Exposure
Drivers Vehicles Policies Transfer
Selection and Placement
Requirements – CDL Class?
Experience counts 50% of accidents happen to employees with 1 year or
less experience in a specific job
Don’t hire “bad drivers” Background and MVR checks
Physically and psychologically suited Drug testing Vision / hearing requirements Subject to ADA restrictions
Hiring a driver without conducting a background investigation
Using a driver whose license is suspended or revoked Using a driver with a poor motor vehicle record Forcing (or allowing) a fatigued driver to operate a
vehicle Failing to address known alcohol or drug related
problems.
Selection and Placement“Negligent Entrustment”
Selection and Placement“MVR checks”
Who? All Drivers
How? State DMV/American Background
What? Criteria
Where? Personnel Office
When? Hire/Continually/Annually
Why? You Are Responsible
Selection and Placement“MVR Grading Criteria”
Minor violations Stop sign / traffic signal
offenses Speeding (not more than
20 mph over posted limit) Improper turn, failure to
signal Seat belt violation Illegal passing
Major violations DUI alcohol / drugs Leaving scene of an
accident Reckless driving Falsifying an accident
report Vehicular homicide or
assault Attempt to elude an officer
Grading Criteria (Three Years)
Violations Grading Criteria
0 –1 Minor Violation Clear
2 Minor Violations Borderline
3 Minor Violations * Poor
4 Minor Violations Unsatisfactory
Any Major Violation Unsatisfactory
* Trigger for remedial training
Selection and Placement“Physical & Psychological “
Law enforcement psychological assessments
NFPA driver / operator recommended practices
ADA issues Local Physical Requirements Vision/Hearing Test Doctors note
Selection and Placement“Drug Testing” Pre-employment For cause Post accident Random
Safety sensitive employees
Security Sensitive D.O.T. requirements Union Contract Substance Criteria
Prescription Non-Prescription Alcohol Illegal
Selection and Placement“Driver Test”
Does a valid drivers license mean they can operate the vehicle or equipment?
Do you let law enforcement officers carry weapons before they qualify?
Require applicants demonstrate competence before you let them operate a vehicle or piece of equipment.
Driver Training
Orientation training Specialized training
Police cars Fire apparatus Ambulances Construction
equipment 15 passenger vans
Defensive driving FLI “Coaching” series
Driver meetings
98% of accidents are caused by human behavior.
Accountability
Accident investigation
Reporting & documentation
Determine preventability
Accident review committee
Consequences and rewards
Charge-back (cost allocation) system.
Retain Physical Damage by department
Driver Deductibles
At fault accidents require driver to pay a set deductible
Must be acknowledged by driver IN ADVANCE and IN
WRITING
May not reduce pay below minimum wage
Discuss this one with your attorney
Employee (Driver) File
Application Background checks Medical records
(confidential) Drug and alcohol test
results Physical exams
Road test (check ride) MVR Photocopy of license Training records Disciplinary records.
Components Of The Auto Exposure
Drivers Vehicles Policies Transfer
Standardize The Fleet
Performance and design specifications
Maintenance
Inventory
Don’t pay for vehicles you don’t own !
Ensure that all of your vehicles are covered !
Keep your inventory up-to-date.
Maintenance
Scheduled preventive maintenance
Based on manufacturers recommendations Vehicle history folder Shop inspection reports Repair orders Shop software
Vehicle condition reports
Headlights, brake lights, warning equipment Fluid levels, tire air pressure, etc
Vehicle File
Document: Purchase Date/Cost Driver Inspections Mechanics Inspections Defect Reports Manufacturers Defect
Reports Annual Inspections Maintenance Costs ALL MAINTENANCE
Government employees / due process
Licensing requirement
Driver qualifications
Motor Vehicle Records criteria
Personal use
Components Of The Auto Exposure
Drivers Vehicles Policies Transfer
Maintenance
Personal vehicle use on city / county business
Accidents & thefts
General driver responsibilities
Preventable accidents
Components Of The Auto Exposure
Drivers Vehicles Policies Transfer
Hired & non-owned
Contractors
Volunteers
Certificates of Insurance
Components Of The Auto Exposure
Drivers Vehicles Policies Transfer
Break
25 May 2006 © Dr. James Kallman, ARM 95
The Risk Taker RoundupState Office of Risk Management
May 25, 2006
25 May 2006 © Dr. James Kallman, ARM 96
Disaster Planning & RecoveryDr. James Kallman, ARM
Kallman Consulting Services700 Furlong Dr
Austin, TX 78746-4127631-748-0853
25 May 2006 © Dr. James Kallman, ARM 97
Benefits of Disaster Planning & Recovery Save lives
Minimize asset losses
Contain recovery costs
Minimize lost revenues
Increase productivity
Reduce regulatory problems
Get back to business faster
25 May 2006 © Dr. James Kallman, ARM 98
Components of Disaster Planning
& Recovery
Before: DPP – Disaster Preparation Plans
During: ERP – Emergency Response Plans
After: BCP – Business Continuity Plans
25 May 2006 © Dr. James Kallman, ARM 99
DPP – Disaster Preparation Plans
1. Articulate your goals
2. Assess hazards
3. Assess current plans
4. Develop/revise ERP & BCP
5. Test the plans
25 May 2006 © Dr. James Kallman, ARM 100
DPP – Disaster Preparation Plans
1. Articulate your goals
What do want to happen after the event?
Is this a SMART goal?
25 May 2006 © Dr. James Kallman, ARM 101
DPP – Disaster Preparation Plans
2. Assess the Hazards
a. Define “hazard”
b. Define “exposures”
c. Define “perils”
25 May 2006 © Dr. James Kallman, ARM 102
DPP – Disaster Preparation Plans
2. Assess the Hazards
d. Assess impacts
e. Assess likelihood
f. Assess timing
g. Describe the “risk”
time
E(X)1
E(X)2
E(X)3
Expected values
P(x)
25 May 2006 © Dr. James Kallman, ARM 103
DPP – Disaster Preparation Plans
3. Assess Current Plans
a. Use the FEMA checklists†
b. How well are you prepared?
c. How often to review your plans?
† FEMA – Emergency Management Guide for Business & Industry
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DPP – Disaster Preparation Plans
4. Prepare/revise Plans
a. Direction and Control
b. Communications
c. Life Safety
d. Asset Management
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DPP – Disaster Preparation Plans
4. Prepare/revise Plans
a. Direction and Control
1) Set up Emergency Operations Center
2) Appoint Incident Commander
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DPP – Disaster Preparation Plans
4. Prepare/revise Plans
b. Communications
1) Lists of key ER personnel
2) Set up teams
3) Create IT systems & back-ups (power too!)
4) Install warning systems
5) Appoint public relations spokesperson
6) Assemble hazardous materials information
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DPP – Disaster Preparation Plans
4. Prepare/revise Plans
c. Life Safety
1) Establish evacuation plan & assembly points
2) Create Search & Rescue plans
3) Arrange for security
4) Secure water, food, shelter
5) Prepare first aid stations & crews
6) Establish medical care & transportation
7) Obtain sanitation
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DPP – Disaster Preparation Plans4. Prepare/revise Plans
d. Asset Management
1) Prepare budgets
2) Arrange for cash
3) Obtain security
4) Get back up power (test) and supplies (paper)
5) Prepare shut down schedules
6) Secure relocation sites
7) Contract for salvage / restoration services
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DPP – Disaster Preparation Plans5. Test your plans
a. Tabletop exercises
b. Simulations
c. Full
interruption
tests
25 May 2006 © Dr. James Kallman, ARM 110
ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
1. Direction & Control
2. Communications
3. Life Safety
4. Asset Management
25 May 2006 © Dr. James Kallman, ARM 111
ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
1. Direction & Control
Activate Emergency Operations
Center
Distribute vital information
packets to key teams
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ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
2. Communications
a. Distribute Plan
b. Contact team leaders
c. Activate IT systems
(check back up systems)
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ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
2. Communications
d. Activate warning system
e. Initiate public relations
f. Distribute HazMat data
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ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
3. Life Safety
a. Site evacuation & assembly
b. Search and Rescue – employees and visitors
c. Provide first aid
d. Premises security (lock-out, tag-out)
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ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
3. Life Safety
e. Distribute water, food, shelter (families)
f. Follow up on medical care & transportation
g. Arrange for sanitation
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ERP – Emergency Response Plans
What will you do if the emergency occurs?
Activate ERP
4. Asset Management
a. Get Cash
b. Provide security
c. Implement back up power
d. Shut down / lockout / tagout
e. Obtain other supplies
25 May 2006 © Dr. James Kallman, ARM 117
BCP – Business Continuity Plans
Let’s get back to normal
Issues: a. What functions will you restore first?b. How will you restore them?c. What resources will you need?d. How long will it take?e. Who will do what?
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BCP – Business Continuity Plans
BCP Process:
1. Articulate goals2. Activate BCP teams3. Distribute schedules & assignments4. Obtain cash (Insurance / retention)5. Set up temporary facilities
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BCP – Business Continuity Plans
BCP Process: 6. Get workers (families)7. Contact external stakeholders
8. Employee rehabilitation9. Initiate salvage operations10. Initiate restoration activities
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Disaster Planning & RecoverySummary
Before: DPP – Disaster Preparation PlansDuring: ERP – Emergency Response PlansAfter: BCP – Business Continuity Plans
Parting words of wisdom: Test your plans!
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Disaster Planning & RecoveryThank You!
Dr. James Kallman, ARM
Thank You