Insights Affecting Risk Management and Self-insurance

Quick reviews of new studies and related insights
affecting risk management and self-insurance.
We deal in conclusions, not opinions.

See You in Court - Maybe?

Aug. 17, 2017

Some good news for risk managers. According to the National Center for State Courts, in 1993 10 of every 1000 US citizens filed some form of tort action in court. In the last year for which we have complete stats, 2015, the rate was 2 in every 1,000. That's a dramatic drop and it appears to apply across the board to all forms of common torts - auto liability, product and general liability, even medical malpractice. The common public assumption that the courts are clogged with tort cases is no longer correct.

Why? A recent issue of that other Journal, The Wall Street Journal (subscription required), provides a very complete round up of the many converging causes of lower tort activity, but tougher state laws, including damage caps, appear to have the greatest impact, along with the growing expense and time required to pursue such actions. One excellent reason is also the lower rate of deaths and serious injuries in auto accidents thanks to better vehicle design. Another, less favorable, factor in the drop in the number of actions may be an increase in mass torts which combine many plaintiffs in one action.

But before you reach for the champagne, note that the rate of contract law actions is climbing, based on everything from a rising rate of evictions and foreclosures to more aggressive debt collection. Contract cases during the same period studied above went from 18% of the civil docket to 51%. What does this mean for risk managers? The relative shift in civil court exposures from common tort to contract issues suggests that risk mitigation may need some refocusing as well. You're aggressively managing your fleet exposure against accidents, let's say. Are you doing the same with the contracts and related business agreements covering your inland marine exposures? There are no GPS recorders and dashcams for an out of control whereas. (In fact, this issue is now so pressing that new Artificial Intelligence solutions are emerging. Check out this article in The National Law Review for more.)

Sleepless in Seattle - and Everywhere Else

Got a good grip on your cup of coffee? Good. You want to be awake for this. A new report from the National Safety Council, Fatigue in the Workplace, details all the ways in which inadequate sleep is putting Americans in danger on the job - and driving up both frequency and severity in certain types of claims in workers' comp, auto, and other lines of coverage. This report is a thorough exploration of the growing issue of American workers being increasingly asleep at the switch. If you're too tired to read the whole report, try this summary from Workerscompensation.com.

Why is this important? Well, the report tells us that "43 percent of Americans say they do not get enough sleep to mitigate critical risks that can jeopardize safety at work and on the roads, including the ability to think clearly, make informed decisions and be productive." Contemplate that percent. That's essentially one of every two employees - the people who drive your big rigs, who make critical decisions for meeting client needs, who represent your company in person or on the phone. Moreover, some 97% of the people interviewed indicated that they have at least one of the nine key factors for lack of adequate sleep.

The folks who compiled the report figure that about 13% of all workplace injuries and 21% of fatal auto accidents can be traced back to inadequate rest and the wandering attention that results. The southern states, for some reason, have the highest overall risk factors and the Midwest states the lowest, but the difference between them is not large. This is a nationwide problem.

What can you do about this? You can't turn the TV and/or computer off at 9:30 and send your employees to bed, but you can work with your colleagues in employee health and HR to develop better awareness at the employee level and try to avoid corporate policies that sabotage good sleep hygiene like erratic scheduling, unreasonable overtime, and unrealistic travel policies. Shakespeare had it right, "Sleep that knits up the ravell'd sleave of care,/ The death of each day's life, sore labor's bath,/ Balm of hurt minds, great nature's second course,/ Chief nourisher in life's feast." Like MacBeth, we do without it at our peril.

Getting Better by Not Getting Worse - Eh?

The July issue of the Journal of Occupational and Environmental Medicine (JOEM) brought an update on the National Healthy Worksite Program (NHWP) (subscription required). Back in 2011, the Centers for Disease Control began a program working with approximately 100 US employers of middling size to develop health promotion and disease prevention interventions which would reduce chronic disease incidence in the workplace. The update makes for some dismal reading.

The NHWP is an ambitious program which brings a variety of interventional services to the employees of the participating companies. It also, appropriately, gathers a great deal of important data to gauge the actual impact of these interventions on employee health. The article provides a wealth of detail on the many measurements. Employees, for example, improved their intake of fruits and vegetables and upped their rate of physical activity by small amounts. However, the objective health state measurements for 2015 relative to the 2013 baseline show essentially no improvements. Average weight, for example, went down slightly in some categories but up in others, even with better diet choices and greater health awareness.

The authors of this interim evaluation were plainly puzzled by the relative lack of material improvements and advance the theory that, since the workforces in question were also getting older and would be expected to have fallen even further away from healthy outcomes without these interventions, the fact that indications were largely unmoved represented "getting better by not getting worse."

The GB Journal has offered many articles over the months concerning the relationship between employee health and the cost of risk. For example, one sidebar of the National Safety Council report noted above is that poor sleep habits are closely related to poor eating habits and significant weight gain. This JOEM update on this major intervention research project stands as a stark reminder of how difficult the task ahead of all of us in risk management actually is when employee health is part of the risk equation, especially in workers' compensation and auto liability.

In what other aspect of business would getting better by not getting worse be considered progress?

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