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Many businesses face testing times as employees head back to the workplace
By Angela Childers
While many employers are eager to open their doors after months in lockdown to quell the spread of COVID-19, myriad questions remain regarding how to navigate the inevitably changed workplace and protect the safety and health of workers and customers, experts say.
Enabling workplaces to come back safely is a national concern, said Lorraine Martin, president and CEO of the Itasca, Illinois-based National Safety Council. “Businesses need to do the best they can using the data that’s available right now. It’s really important for us to look at (each industry) uniquely.”
Essential businesses, such as pharmacies and grocery stores, remained open while trying to implement safety measures during the nearly nationwide pandemic shutdown. Many states began lifting restrictions on non-essential businesses last month and further loosening of restrictions is expected.
For many industries, including construction, the workplace has “absolutely changed 100% across the board,” said Pittsburgh-based Carl Heinlein, senior safety consultant for the American Contractors Insurance Group. “Now, before you come onto a project, you’re going through a health assessment, and in many cases that will include a temperature reading, and you’re probably going to go through some sort of re-education or toolbox talk discussion about social distancing.”
Contractors have a lot of questions about how they can restart projects while preventing workers from being exposed to COVID-19. They’re grappling with such issues as how to get workers through the gates and to work safely, a process that used to take 15 minutes and now can take several hours, Mr. Heinlein said.
The industry is also putting much more emphasis on safety and hazard awareness training, emergency preparedness, and hygiene and sanitation.
“We’re already hearing that increased hygiene, sanitation and social distancing are all being implemented on sites,” said Kaileigh Bowe, vice president of Naperville, Illinois-based Highland Insurance Solutions, a subsidiary of WNC Insurance Services Inc.
Many are using or planning to implement technology to monitor distancing and for contact tracing, said Cheri Hanes, Dallas-based construction risk engineer for Axa XL, a unit of Axa SA.
For instance, Proxxi Co. in Vancouver, British Columbia, modified its wristwatch-like technology created to prevent electrocution to alert workers when another person is within six feet. Norwalk, Connecticut-based Triax Technologies Inc. is using devices mounted on hardhats as contact tracers, so if a worker tests positive for coronavirus, other workers who had been in close proximity to that individual can be quickly identified. Smartvid.io Inc., based in Cambridge, Massachusetts, has created a module for onsite cameras to identify when workers are violating social distancing and other safety rules.
Landscape different for retail, restaurants
The workplace for retailers and restaurants will also look much different.
“Retail has been a little bit of a challenge for us,” said Larry Sloan, CEO of the American Industrial Hygiene Association in Falls Church, Virginia. Physical distancing in stores, particularly smaller ones, will be difficult, and there is also the risk of disease transmission on merchandise. Currently, the AIHA is recommending that retailers temporarily eliminate changing rooms, and if they allow for returned items, to place them in quarantine, he said.
“The concern with restaurants is that you have potentially greater contact between the wait staff and the customer,” he said. To mitigate that exposure, he said, restaurants will need to consider adopting policies such as reservation-only dining, limiting groups to six people, asking customers to wait outside or in their vehicles until their tables are ready, using partitions to create additional barriers between workers and diners and between diners themselves, and displaying signage vetted by legal counsel that outlines the steps the establishment is taking to protect the health of its employees and the public, Mr. Sloan said.
The meatpacking and poultry processing industry — which was ordered to remain open in an April 28 executive order by President Donald Trump — has been hard hit by COVID-19 and is grappling with ways to protect workers from the virus. Thousands of workers at more than 100 plants in the United States have tested positive for the virus, according to the U.S. Centers for Disease Control and Prevention.
Although the CDC and the U.S. Occupational Safety and Health Administration issued temporary guidance for the industry, which includes temperature checks, staggered shifts, social distancing on lines and providing personal protective equipment, the guidance was voluntary as of May. It is unknown whether the government will police adherence to the guidance and what limitations of liability may be applied, said Melanie Neumann, Chicago-based executive vice president and general counsel of Matrix Sciences International Inc., a food production advisory firm.
But plants that fail to follow the advice could be cited for violation of the OSHA general duty clause, which may be invoked when a serious hazard is recognized but no applicable regulation exists, said Eric Conn, founding partner of Washington law firm Conn Maciel Carey LLP.
With all of the uncertainty, employers in food-processing plants as well as other industries would be wise to appoint someone as a “COVID czar” responsible for staying on top of new pandemic guidance, conducting regular risk assessments and implementing controls to prevent the spread of the virus, Ms. Neumann said.
Provide education for workers
Regardless of the industry, employees need to be educated about COVID-19 and how to use personal protective equipment, such as face masks, said Diana Stegall, Tucson, Arizona-based president of the American Society of Safety Professionals.
Employers should help workers understand why there is a need to wear personal protective equipment, how to obtain the equipment, how to remove it properly at the end of a shift, and how to clean it on a regular basis to avoid bacteria buildup, she said.
“One of the biggest mistakes an organization can make is to assume that employees are educated about COVID-19 and know what to do in the event of exposure or diagnosis,” said Eric Glass, Franklin, Tennessee-based senior risk and safety advisor at safety science company UL LLC. “Educating your employees should be an ongoing, never-ending effort, even after this pandemic is over.”
If an employee does receive a COVID-19 positive diagnosis, the company should have a “situational matrix” that outlines the internal actions that should be taken, which may include notifying other employees that may have been exposed to someone who tested positive, and cleaning and disinfecting work areas, Mr. Glass said.
“OSHA has relaxed its guidance on recordkeeping of COVID-19, especially in areas where there is wide community spread,” Ms. Stegall said. “But that doesn’t mean in the insurance world that it’s not covered.”
OSHA still requires employers to take reasonable efforts, based on the evidence available, to ascertain whether coronavirus cases reported by employees are work-related, under revised guidance that took effect May 26. Confirmed cases of COVID-19 requiring medical attention beyond hospitalization or days away from work and are determined to be work-related must be recorded on the employer’s OSHA 300 log.
Employers should also talk with their third-party administrator or investigators to find out what guidance they have for policyholders and how to handle claims of COVID-19 infections by employees, said Jeff Adelson, co-managing shareholder of Newport Beach, California, law firm Adelson McLean APC.
“If someone comes to you and says, ‘I have the virus,’ seek guidance from the workers comp carrier — don’t hide it,” Mr. Adelson said. “Putting your head in the sand is not going to help.”
Employers that fail to put into place policies to protect workers could be opening themselves up to serious and willful misconduct claims — regardless of whether the worker files a comp claim, he said.
“Every employer needs to ask themselves, ‘Is my business complying with the requirements of the reopening order?’” Mr. Adelson said. Although an employer may still see workers comp claims for COVID-19, “as long as you follow the law … the likeliness of getting a serious and willful claim is remote.”
Workplaces also should examine more subtle issues, such as how many people can enter an elevator, how to accommodate the volume of workers needing a temperature check at the start of a shift, and whether to shift employees’ workdays to reduce exposure, Ms. Martin said.
“One of the other pieces you have to address … is employee stress and their mental and emotional needs as well,” Ms. Martin said. “People are going to have questions. … Have some resources to help folks navigate that.”
Employers also need to ask themselves why they believe bringing workers back to the workplace feels right for the safety and health of the organization.
“Make sure you’re communicating with your team why they’re going back,” Ms. Martin said. “We like clarity. We like to understand, especially if there’s fear.”
Federal backstop could help captives
By Claire Wilkinson
A government pandemic backstop could benefit the captive insurance sector, though much will depend on the structure of any plan, experts say.
The concept of a Pandemic Risk Insurance Act that Marsh LLC CEO John Doyle supports would be helpful to the insurance industry and captives, said Michael Serricchio, a managing director with Marsh Captive Solutions, a unit of Marsh LLC in Norwalk, Connecticut.
“A backstop and mechanism similar to the Terrorism Risk Insurance Act could provide a lot of safety and security for captives that would then write this coverage and be a lot more protected,” Mr. Serricchio said.
However, plan details such as the policies, premiums, triggers, and limits would have to be “thought out,” he said.
A draft PRIA bill circulating in Congress does include captive insurers, sources say. Other proposals being considered include a taxpayer-funded pandemic backstop backed by three major insurance trade groups.
Pandemic risks are uninsurable if “we’re simply talking about relying on the premium and capital of the commercial insurance and reinsurance market,” said Martin Eveleigh, chairman, Atlas Insurance Management, based in Charlotte, North Carolina.
“If there is a government backstop program put together, then perhaps the risk becomes at least up to a point insurable and transferable. If such a program is put together, captives need access to it as much as commercial carriers,” Mr. Eveleigh said.
The concept of a PRIA-type program is worth exploring, said Anne Marie Towle, Indianapolis-based senior vice president at Hylant Group Inc.
The question is “how do we fund for this, how do we make it accessible through a captive,” she said.
Captives fill gaps amid pandemic
By Claire Wilkinson
As in previous times of insurance market dislocation, captive insurers are playing a key role amid the COVID-19 pandemic, as owners file claims and focus on business continuity, while trying to lower their total cost of risk, experts say.
More pandemic-related risks will likely be written by captives as commercial insurance buyers grapple with tougher market conditions in the coming months, they say.
In previous times of stress, such as after the Sept. 11, 2001, terrorist attacks and the medical liability crisis in the 1980’s, captives have always been able to “step in and help pay claims when commercially things were stalled or debated or mitigated,” said Anne Marie Towle, Indianapolis-based senior vice president at Hylant Group Inc.
“So particularly in this time, we have already seen growth in captive interest. People are looking at how they can protect their organization if they haven’t in the past with a captive,” Ms. Towle said.
Business interruption, event cancellation, supply chain, trade credit and surety are some of the areas where captives may see claims, experts say.
While pandemic losses are excluded by some captives, others offer their owners broader coverage, allowing them to recover some of the lost profits and extra expenses incurred amid business closures and government lockdowns, they say.
On the liability side, there is the potential for employment practices, professional liability and workers compensation claims, especially in areas such as health care and hospital-owned captives, Ms. Towle said.
Medical stop loss is another area where captive participation has been increasing in recent years and where there is potential exposure, experts say.
An area where Hylant Group has seen claims submitted is under all-risks coverage, where the difference in conditions policy would step in and provide coverage, Ms. Towle said.
“I have seen both interest in that type of coverage going forward and captive owners utilizing and leveraging it under those types of policies,” she said.
These policies and claims have been mainly in the manufacturing sector where a business has been completely shut down and operations interrupted, she said.
The other area where Hylant has had “discussion with clients but not seen any claims so far” is contamination to the business property.
“If you have an outbreak, like the Tyson food plants and facilities like meatpackers, how does that have an impact to contamination of their actual property and recovery from that and cleanup potentially? That’s something we’ve had discussions about,” Ms. Towle said.
Cyber liability is another exposure that could potentially lead to COVID-19-related captive claims, she said. With so many people working from home, internet connections may not be as stable and safe as they would be in an office, she said.
Several captives managed by Marsh LLC provide coverage for pandemics and for non-damage business interruption with triggers for pandemics, but it’s too soon to say whether claims are being made against the policies in place, said Michael Serricchio, a managing director with Marsh Captive Solutions, a unit of Marsh LLC in Norwalk, Connecticut.
“We have various property business interruption and contingent business interruption policies in captives that are triggered by different events, namely pandemics and outbreaks of infectious disease,” he said.
Some captives also provide broad coverage for non-damage business interruption, difference in conditions, differences in limits that may see claims, Mr. Serricchio said.
Real estate, hospitality and mining are some of the business sectors with captives managed by Marsh that have the coverage, he said.
“A lot of these coverages are direct between the captive and the parent, so it won’t show up for another quarter in terms of proceeds coming out of the captive,” he said.
Limits vary according to the risk appetite of parent companies and tend to be in the millions and tens of millions of dollars, rather than hundreds of millions, according to a recent Marsh webinar.
Some businesses are “more vulnerable” than others to pandemic-related disruptions, said Martin Eveleigh, chairman, Atlas Insurance Management, based in Charlotte, North Carolina.
“Hospitality, fine dining restaurants, yes, if they have a captive, they’d almost certainly be making claims,” he said.
Group captive policies usually are issued on standard forms so any exclusions that exist in commercial property policies would still apply, but many single parent captives issue policies with “much broader coverage,” Mr. Eveleigh said.
These include policies issued by smaller captives, including some that elect to be taxed under Section 831(b) of the Internal Revenue Code, he said.
“Many of those captives will be issuing business interruption policies, supply chain interruption policies, some work stoppage, inability to access premises, that kind of coverage, so they will certainly be responding in terms of paying the claims,” Mr. Eveleigh said.
“We have a number of captives under management where the captive owner, the insured’s interpretation of the policy language is that there is some coverage afforded to them for COVID-19 losses,” said Jason Palmer, director at Willis Towers Watson Management (Vermont) Ltd.
“We’re talking with claims professionals and others trying to document and quantify what that claim will ultimately be and submit it to the captive,” Mr. Palmer said.
Meanwhile, in the economic downturn, companies may be leveraging the additional capital in their captives for other needs.
A lot of companies that don’t have pandemic coverage are looking to their captive for liquidity, Mr. Serricchio said.
2020 Break Out Awards
It’s unclear in what shape the insurance and risk management sector will emerge from the COVID-19 pandemic, but there’s little doubt it is going through change. Even before the coronavirus struck earlier this year, insurance prices were rising, technology was transforming business processes and new risks continued to emerge.
With the onset of the pandemic, huge social and economic changes have been imposed on everyone in the space of weeks, some of which will be transitory, but some will have lasting effects. As we work through the upheaval, business smarts and adaptability will be an even more valuable commodity. Fortunately, many organizations in the sector have those skills in hand.
40 Honorees
The 40 honorees selected for the 2020 Business Insurance Break Out Awards represent some of the most talented leaders developing in the industry. To be eligible for the award, nominees must work in commercial insurance or related sectors and cannot have worked in the field for more than 15 years. To maintain diversity in geography and types of organization, the honorees are grouped in four regions of the United States: Northeast, South, Midwest and West.
Business Insurance Break Out Awards represent some of the most talented leaders
All the nominations — which highlighted the nominees’ client-service skills, expertise and leadership qualities — were reviewed by BI editors. After selecting finalists, we contacted references to learn more details about the nominees’ achievements.
In the following pages, you can read edited excerpts of interviews with all the winners and learn how they found their way into the industry, what they find most challenging about working during a pandemic, things they wish they’d known when they were 18 and their top choices for movies and meals — pizza remains a perennial favorite.
Gavin Souter, Editor