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Kate

The Californian 2019 Q1 – SAFETY & THE IMPORTANCE OF ACCIDENT INVESTIGATIONS

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SAFETY & THE IMPORTANCE OF ACCIDENT INVESTIGATIONS

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

At the beginning of each year, I always reflect back on the prior year to see where I could have improved and identify which area of the operations need the most attention. In doing so, safety always comes to mind, because it involves all operations and has a significant effect on the overall efficiency and productivity on the business of my clients. Safety is a process that always needs to be updated and modified to maintain a safe workplace for your employees and others. This reminded me of accident investigations and how important they are in the safety process.

All accidents should be investigated and it’s for one simple reason, to stop them from happening again. This may sound quite basic but let’s put it into reality, the main purpose of an investigation is to identify the causation factors and then identify any preventative or corrective action to prevent reoccurrence.

There are many other reasons for investigating accidents including legal litigation, insurance claims, workers compensation, company reputation and sometimes contractual requirements.

Please understand and remember that any investigation has certain deliverables and expected outcomes. This is why we need to continually assess and evaluate safety policies and procedures throughout the investigation, so that we can proceed down the appropriate path.

To refresh your memory, the following are the basic stages in an accident investigation:

STAGES IN AN INVESTIGATION

  • OBTAIN FACTS
  • DETERMINE THE CAUSES
  • DETERMINE THE CHANGES NEEDED
  • RECORD THE FINDINGS
  • COMMUNICATE THE FINDINGS
  • REVIEW ACTION

 

OBTAIN THE FACTS

Establishing what is relevant and what is not can be time

consuming. However, this information can be obtained by:

  • Inspecting the immediate scene and equipment
  • Interviewing the person directly involved with the accident
  • Interviewing witnesses to the accident
  • Reviewing procedures and training

 

Inspecting the immediate scene and equipment:

The accident scene should be inspected as soon as possible

after the accident. Particular attention should be given to

the following to see if any of them had a bearing on the

accident potential:

 

  • Positions of people
  • Any personal protective equipment
  • Tools and equipment
  • Orderliness/tidiness
  • Procedures

Wherever appropriate, photographs and/or sketches should be

taken of the scene. This is of particular importance where

there is a likelihood of the scene being disturbed – e.g. to

make the area safe.

 

Interviewing:

Ideally this should be done in familiar surroundings so as

not to make the person being interviewed feel uncomfortable.

If the person is not too seriously injured, then the accident

site is ideal as the person can explain what happened.

Remember this should be an interview to determine the facts

not an interrogation. Witnesses should be interviewed one at

a time.

 

Reviewing procedures and training:

The work procedures set out in appropriate guidance and any

risk assessments should examined to see if they existed and

were adequate, if they we were understood and followed.

It is also important to establish:

 

  • Any training received relevant to the accident
  • Any past incidents/accidents
  • Any risk assessments in relation to that particular

activity to see if any weaknesses have been previously identified.

 

Determine the causes:

After all the facts have been ascertained the causes can be

examined.

 

Obvious causes: The obvious causes are easy to find.

They are brought about by an unsafe act or condition. Unsafe

acts usually stem from poor safety attitudes and indicate a

lack of proper training or information.

 

Root Causes: These are personal or job factors that are

brought about by failures in organization and the

management’s safety program. This can include factors such

as;

  • Lack of supervision or discipline
  • Lack of training
  • Lack of management awareness

Determine what changes are needed

The purpose the investigation is to prevent a reoccurrence.

To do this some practical measures must be recommended and

carried out that will demonstrate a commitment to reduce

this identified risk. The remedial action may be short and

/or long term and may involve changes to the physical

environment – e.g. putting in place new guarding on

machinery – and/or procedural changes – ensuring an adequate

training program.

 

Record findings

The findings of every accident investigation must be

recorded in a systematic way to enable the report to be read

by the appropriate people who are responsible for reviewing

and implementing necessary changes. It also provides a

historical record of the accident that may be useful in the

future.

 

Communicate findings

Good communication is a very important part of the safety

effort. Information of an accident and remedial actions

should be passed to all relevant staff who may encounter

similar incidents.

 

Review action

Where action has been implemented as a means of reducing the

risk of an accident reoccurring, those actions must be

periodically reviewed to ensure that they remain

appropriate.

 

I have included a Sample Accident Investigation Form for your review. There are many different types of investigation forms available.

Please feel free to call me if you have any questions and have a great 2019!

Click here to view a Sample Accident Investigation Form

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Kate

The Californian 2019 Q1 – INSURANCE, TERRORISM & THE TERRORISM RISK INSURANCE ACT (TRIA)

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INSURANCE, TERRORISM & THE TERRORISM RISK INSURANCE ACT (TRIA)

Nick Langer, Turner Surety & Insurance Brokerage, Inc.

First passed into law in 2002, the Terrorism Risk Insurance Act (TRIA) requires commercial insurers to make terrorism insurance coverage available. Since then TRIA has established a federal backstop program, providing the necessary stability to the private terrorism risk insurance market by guaranteeing both the availability and affordability of terrorism insurance coverage for U.S. commercial properties and businesses.

The initial intent of TRIA was to provide a temporary federal backstop program that would allow the economy to recover following the 9/11 attacks. While the reinsurance industry has become increasingly willing to cover terrorism risks over the years, the private market still cannot assume all the risk alone.

On January 12, 2015, President Obama signed H.R. 26, the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015) into law, which extends the federal backstop program for an additional six years through December 31, 2020. As was the case with the prior reauthorization in 2007, TRIPRA 2015 calls for new structural changes to be implemented, which reduces the federal role in the program.

Similar to the TRIPRA 2007 program, TRIPRA 2015 requires certain criteria to have been met before federal coverage under the program begins. First, Property & Casualty insurance losses resulting from a terrorism-linked attack must meet the minimum damage certification level of USD 5 million. If losses are expected to meet this minimum threshold, then the event must also be officially certified as an “act of terrorism.” This certification is determined by the U.S. Secretary of the Treasury in concurrence with the Attorney General of the United States and—new under TRIPRA 2015—the U.S. Secretary of Homeland Security. As an example, insured losses resulting from the Boston Marathon bombing were not expected to meet this minimum threshold, and the event has not been certified as an act of terrorism—even though President Obama referred to it as an act of terrorism during a speech he gave soon afterward. The certification requirement can be frustrating for policyholders, who are left wondering when or if their claims will be covered.

If an act of terrorism has been officially certified, then compensation under the program will still not begin until aggregate insured losses in a calendar year reach the “program trigger.” Under TRIPRA 2015, the program trigger will gradually be raised each year from USD 100 million in 2015 to USD 200 million by 2020. The increase to the program trigger is considered to be one of the most substantial changes to the program and aims to transfer more of the risk to the private insurance market. Some argue that this may negatively impact the solvency of small, insufficiently diversified insurers who are not well positioned to absorb losses up to this level.

Once all the initial criteria for federal coverage have been met, an insurer who incurs losses resulting from a certified act of terrorism is required to first cover a portion of the losses—the insurer deductible. The amount of each individual insurer’s deductible is calculated as 20% of the insurer’s direct earned premiums in TRIPRA-eligible lines of business for the previous calendar year. For losses in excess of the insurer deductible, each insurer is also required to cover a pro-rata share of the losses, or copayment, with the federal government providing compensation for the remaining losses. Under TRIPRA 2015, the insurer copay will gradually increase each year from 15% ultimately to 20%.

The annual cap on liability also still applies under TRIPRA 2015, which means that no federal or private insurer payments are compensated for any portion of aggregate industry insured losses exceeding USD 100 billion. TRIPRA 2015 also increases the industry annual aggregate retention from USD 29.5 billion to USD 37.5 billion in 2019, the fifth and penultimate year of the program. In 2020, the final year of TRIPRA 2015, the retention will rise to an amount equal to the average of all participating insurers’ deductibles over the previous three program years. The Congressional Budget Office (CBO) has estimated that this amount could be as much as USD 50 billion.

If you have been involved in the process of securing insurance for your business, then you have received some version of a TRIA Disclosure giving you the option to “Accept” or “Reject” coverage for acts of terrorism. To better understand this coverage, it is important to understand the difference between “Certified Acts of Terrorism” and “Noncertified Acts of Terrorism.”

A Certified Act of Terrorism is eligible for coverage under TRIA. Insurance carriers paying claims in response to a certified act of terrorism will be reimbursed by the federal government. An act of terrorism is certified by the Secretary of Treasury and must meet the following criteria:

  1. Be a violent act or an act that is dangerous to human life, property, or infrastructure;
  2. Cause damage within the United States or other area of U.S. sovereignty
  3. Be committed as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the U.S. government by coercion; and
  4. Produce property-casualty insurance losses in excess of $5 million.

A Non Certified Act of Terrorism is simply that… an act of terror that is not certified by the Secretary of Treasury and therefore does not trigger the federal reimbursement provisions of the Terrorism Risk Insurance Act (TRIA). As discussed earlier, TRIA mandates that commercial insurers offer coverage for “certified acts of terrorism,” however they are free to exclude (or cover) “noncertified acts of terrorism.”

 

As you can see there are many moving parts of TRIA and thus far the claims process remains untested. Since TRIA is a backstop, in essence a federal reinsurance program for Insurance carriers, it is likely that carriers will be measurably slower in the adjusting of claims should an act of terrorism occur. Couple that with the fact that the act itself expires December 31, 2020, and the federal government looks to diminish their role as reinsurer to the carriers there simply are no guarantees as to the future.

Nick Langer is a Senior Risk Advisor at TSIB with more than 15 years of property & casualty broker experience. He specializes in the Construction, Energy and Security Industries. Nick enjoys the challenge of finding solutions to his client’s unique needs and is committed to learning the intricacies of each client’s business operations.

Prior to joining TSIB Nick had his own insurance agency that specialized in both personal and commercial lines of insurance. After 7 successful years of growing his property and casualty agency he joined Tolman & Wiker Insurance Services, LLC.

Nick regularly presents at trade associations on risk management topics including: Workers’ Compensation, Claims Management, Risk Management, Contractual Risk Transfer and Employment Practices Liability.

Nick is committed to improving the lives and success of his clients for the benefit of the community through his various roles and leadership positions. He has served as the Insurance Advisor to the Board of Directors of The California Association of Licensed Security Agencies, Guards and Associates (CALSAGA). He is President of The Bakersfield Young Professionals in Energy (YPE), a member of the Associated Builders & Contractors (ABC), and the former Government Affairs Committee Chair for the Central California chapter. Nick is a member of the Associated General Contractors (AGC) and the American Society of Safety Engineers (ASSE).

Nick has Bachelor of Science in Business Economics from University of California, Santa Barbara. Nick and his wife have three children and three rescue dogs. In his spare time, Nick is an avid fisherman and enjoys golfing, hiking and fitness training.

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Kate

THE CALIFORNIAN 2018 Q2 – INDEMNITY – ARE YOU AN INSURANCE COMPANY?

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INDEMNITY – ARE YOU AN INSURANCE COMPANY?

Nick Langer, Senior Risk Advisor – Turner Surety & Insurance Brokerage, Inc.

 

Everyday your private security company performs service for its clients. As owners, executives and managers we have expectations of our employees… appearance, behavior, dependability, etc. Your clients, naturally, have expectations of your security company as well. Frequently there are misunderstandings between your clients’ perceived expectations of your company’s services and the actual services provided by your company. Most successful security providers invest much time and resources into meeting or, better yet, exceeding their clients’ expectations. While client satisfaction is important in the success of your company, your contractual obligations to your client as defined in your contract or service agreement are paramount in the protection and longevity of your security company. Fully understanding your contractual obligations and duties and what type of risk your company is assuming under the contract should be thoroughly analyzed before executing any contract or service agreement.

 

I must preface the remainder of this brief by making it clear that implementing or executing your security company’s own contract or service agreement with its clients can create the most favorable contractual relationship for your company…. assuming an attorney has helped draft it. With that being said, it is very common for most clients to require you, the security provider, to sign their contract. In analyzing a typical contract you’ll come across various elements establishing duties, responsibilities, etc. Clearly all of these obligations are important in understanding the intentions of the contract or most specifically the requirements of the contracting parties (your company and your client). All elements of a contract are relevant, however the Indemnity/Indemnification/Hold Harmless contract language should be examined in great detail.

 

Before diving into the Indemnity language of the contract, it is important to understand “why” this contract between you and your client is being implemented in the first place. The short answer is “risk transfer.” YES, your client has transferred their risk onto your security company the moment your company begins, or agrees to begin, providing security services to them. To what degree your security company has assumed risk associated with the location and/or post orders is ultimately determined by the language contained within the four corners of your executed contract or service agreement. Remember, your client has hired your security company to protect them from, or prevent, various types of risks, e.g., bodily injury, property damage or financial loss from occurring.  In almost every situation, the locations your company is securing are under your care, custody & control. With this care, custody & control of the location comes much risk…. Which is “why” your client has hired your security company in the first place. Your security company is a risk transfer tool.

 

Risk transfer is a very common practice in risk management strategy. In fact, every time we purchase insurance we have engaged in a risk transfer agreement with the insurance carrier; that is, we pay insurance premiums to the insurance carrier and in return the insurance carrier promises to defend us or protect us and/or our property from certain risks or perils identified in the insurance policy. It is incredible how remarkably similar an insurance transaction is to the relationship between a security company and its client, i.e., the client pays the security company and in return the security company promises to provide services to protect the client or prevent certain risks from occurring. This begs the question, “Are you an insurance company?” In theory, the answer is “NO” however you must pay close attention to the obligations created contractually between you and your client to ensure that the expectation is not created for your security company to act as an insurer.

 

In taking a deeper look into the critical elements of your contract, the Indemnity language will be most important as respects managing your company’s risk. Indemnification clauses are also referred to as a “hold harmless” agreement. These types of agreements establish that the Indemnitor will agree to protect and indemnify the Indemnitee from damages such as bodily injury or property damage that occur from the negligence or negligent acts or omissions (intentional or unintentional) by certain parties. Once you agree to indemnify your client you have agreed to not only reimburse your client for certain losses or occurrences which arise at their location, you are also going to be required to defend them. There is frequently a misperception of this concept. Unfortunately many people take the approach of managing their company’s contractual risk by merely accepting the terms of a contract under an assumption that the company’s insurance programs are the catchall solution to any adverse situations which arise. That assumption is dangerous. There are many risks and occurrences to which insurance simply will not respond. Even the most robust insurance policies cannot be relied upon as the resolute solution in risk management. Insurance is one of many risk management tools that can be used to transfer some of your company’s risk onto an insurance carrier, however you must identify and manage those risks that insurance will not respond to. When analyzing the Indemnity language in your contract it is important to remember that the indemnification and defense of your client remains enforceable regardless of the existence of any insurance policies maintained by your company.

 

There are three levels of indemnification to familiarize yourself with– broad, intermediate & limited.

 

Broad Form Indemnity: Broad Form Indemnity requires one party (the Indemnitor) to assume the obligation to indemnify and hold harmless another party (the Indemnitee) even if that other party is solely at fault or negligent. The phrase “caused in whole or in part” used in the indemnification clause is a key indicator of a Broad Form indemnity agreement. This type of Indemnity poses the most risk to your company and in many states may not be enforceable.

 

 

Intermediate Form Indemnity: Intermediate Form Indemnity indemnifies a party (the Indemnitee) for its own negligence, except if that party is solely at fault or negligent for the occurrence. With an Intermediate Form Indemnity the Indemnitor agrees to indemnify and hold harmless the Indemnitee if a claim, demand or suit is brought against them for an occurrence caused in whole or in part by the Indemnitor’s negligence, including the contributory negligence of the Indemnitee. The phrase “caused in part” in the indemnification clause is a key element in establishing an Intermediate Form indemnity agreement.

 

Limited: Limited Form Indemnity is really a concept that follows common law principal in that a party is responsible for their own negligence. With a Limited Form Indemnity the Indemnitor agrees to indemnify and hold harmless the Indemnitee in the event a claim, demand, or suit is brought against them as a result of the Indemnitor’s direct negligent acts. A key phrase to look for in a Limited Form Indemnity is “only to the extent.”

 

Once you have determined the type of Indemnity imposed by your client’s contract it is critical to reference your insurance policies to ensure that coverage will respond, before you execute the contract or begin performing services. Frequently we see contracts which contain Indemnification language which is broader than the coverage afforded under an insurance policy. The Indemnity language is one of many parts of your client contract that should be negotiated whenever possible. We have all encountered situations in which your client presents the “take it, or leave it” contract. In every other situation you should at minimum ask if the client is willing to negotiate the indemnity language. Negotiating a reasonable Indemnity agreement can mean the difference of having a claim covered under your insurance policy or not. Carefully review all contracts with your attorney and insurance broker prior to execution so that you can enter into the relationship with your client knowing and understanding all of the risks involved. While your security company can make many promises as respects its ability to deter losses from occurring, it is impossible for your company to guarantee there will never actually be a loss. Know the risks and don’t let your security company become an insurance company for your client.

 

 

Nick Langer is a Senior Risk Advisor at TSIB with more than 15 years of property & casualty broker experience. He specializes in the Construction, Energy and Security Industries. Nick enjoys the challenge of finding solutions to his client’s unique needs and is committed to learning the intricacies of each client’s business operations.

Prior to joining TSIB Nick had his own insurance agency that specialized in both personal and commercial lines of insurance. After 7 successful years of growing his property and casualty agency he joined Tolman & Wiker Insurance Services, LLC.

Nick regularly presents at trade associations on risk management topics including: Workers’ Compensation, Claims Management, Risk Management, Contractual Risk Transfer and Employment Practices Liability.

Nick is committed to improving the lives and success of his clients for the benefit of the community through his various roles and leadership positions. He has served as the Insurance Advisor to the Board of Directors of The California Association of Licensed Security Agencies, Guards and Associates (CALSAGA). He is President of The Bakersfield Young Professionals in Energy (YPE), a member of the Associated Builders & Contractors (ABC), and the former Government Affairs Committee Chair for the Central California chapter. Nick is a member of the Associated General Contractors (AGC) and the American Society of Safety Engineers (ASSE).

Nick has Bachelor of Science in Business Economics from University of California, Santa Barbara. Nick and his wife have three children and three rescue dogs. In his spare time, Nick is an avid fisherman and enjoys golfing, hiking and fitness training.

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Kate

THE CALIFORNIAN 2018 Q1 – CREATING AN EMERGENCY ACTION PLAN

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Creating an Emergency Action Plan

Shaun Kelly, Tolman & Wiker

Contributions by Cassie Mosman, Jessica Wilkison and Xochitl Tejeda de Rodarte

You never really know if you are ever going to use an Emergency Action Plan.  With the recent Thomas fire, we had to put our plan into action! We woke up to find our office in downtown Ventura engulfed by the smoke.  Luckily, it was only smoke. We immediately had to communicate to over 100 employees that the office would be closed, due to health concerns. We also had to keep our communication lines open for  clients who may have had their homes and businesses affected by the fire. We had no idea how many of our employees and clients were personally affected by the fire at that time. We were very fortunate to have our other offices (Bakersfield, Santa Maria and West Lake Village), open and available to take  calls and provide the needed support to our clients .

Since the Ventura office is now back open  and we have had time to reflect on the events that took place as a result of the fire, I want  to share our Emergency Action Plan with you. What really came to light was establishing the ability to communicate with all of our employees (Team members) at the same time and sending the same clear and concise message to all, which was extremely important. This allowed us to provide our team a status of the office conditions, inform them that the clients were being taken care of by our other offices and enabled our team members to update us on their own personal status.

Some of you may already have a plan like this in place. If not, this may help you get started. The plan may also be a good discussion item with your clients. I hope this is helpful.  If you have any questions, please do not hesitate to contact me.

Emergency Action Plan

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