Commercial Property Insurance in Peril

Commercial property insurance was already struggling before COVID-19 hit the scene. Double-digit rate increases were bad enough but hit the highest in 35 years. 

As I cover in Actuarial Review’s article, Perilous Times: COVID 19 & Vexing Variables, there were several things going on. Consider:

  • Catastrophic weather-related losses have been exceptionally high – at least for the years 2017 and 2018.
  • Thanks to the response to the COVID-19 pandemic, commercial space has been at low capacity for seven months. 
  • Declining investment income due to lower returns on mortgage-backed securities.
  • Riots similar to the late 1960s have made a comeback – big time.

I wrote the commercial property insurance article before a multitude of hurricanes hit the United States, especially in the Gulf states. While the article focuses on commercial property insurance, it should also interest homeowners’ insurance policyholders as well.  

My thoughts on “Civil Unrest”

As an aside, I found it distressing that last summer, some people said it was OK to destroy buildings because that is not harming people. It depends on how someone perceives harm. Small business people who lose their companies and their employees who lose jobs feel harm. So do the neighbors. People have been physically harmed or even killed. Businesses that hang on despite the damage still have to pay deductibles for their commercial property insurance. Their premium can also go up.

By the way, if civil unrest sounds like rioting, then you need to get current. The Associated Press Style manual recently instructed journalists to avoid using “riot” as a term. “A riot is a wild or violent disturbance of the peace involving a group of people. The term riot suggests uncontrolled chaos and pandemonium, according to the AP Stylebook’s twitter feed. Apparently, the act of going into someone else’s neighborhood, stealing property and destroying buildings could be stigmatized like the protests of the 1960s. “Unrest is a vaguer, milder and less emotional term for a condition of angry discontent and protest verging on revolt,” tweets the AP Stylebook

Whatever it is called, I wish the Golden Rule would make a comeback. Treating people the way we want to be treated with kindness, dignity and respect would go a long way. Sounds like Martin Luther King doesn’t? 

 

 

 

 

 

 

 

 




Climate Change Pressures Higher Property Insurance Premiums

Climate change is already pressuring premiums for homeowners, commercial and other types of insurance coverage. California homeowners in wildfire-prone areas are being turned down for coverage. The National Flood Insurance ProgramClimate Change

(NFIP) will be increasing premiums this spring.

My article in the January issue of Leader’s Edge, Climate Appetite, explains why businesses should consider the change in climate seriously to mitigate future risk. The piece also covers the important role insurance agents and brokers will play to support their clients.

There is also an overview of catastrophic losses and their impact on insurers.

Whether you believe global warming will cause serious changes to the earth’s environment — or not  — the story should be a wake-up call. Businesses need to take a harder look at their properties. Being sustainable could mean relocating, reinforcing buildings or taking maintenance and repair more seriously. 

Making these investments now is a good idea. Besides protecting business personnel and property, it could keep insurance premiums in check.

After reading my latest Leader’s Edge article, please check out my Actuarial Review articles relating to weather and insurance.

  • Risky Business explains why climate change has become the top risk of concern for actuaries and risk managers.
  • 2017: The Year of the CATs, discusses how extreme weather made 2017 the highest loss year for losses, bypassing 2005 of Hurricane Katrina fame.
  • The SLR Factor covers why sea levels are on the rise. It also explains why actuaries should consider the impact of rising sea levels when developing rates for pricing property insurance. 

 

 




Lessons to Learn from the CATs of 2017

The CATs of 2017 are warning us, will we listen?

The CATs of 2017 are warning us, will we listen?

There is a lot to learn from the weather CATs of 2017. My most recent article, 2017-The Year of the CATs, published recently in Actuarial Review, covers natural catastrophes Hurricanes Harvey, Irma, Maria and last fall’s combined California wildfires. The article also takes a unique look each CAT, showcasing lessons learned and ones yet-to-be learned.

Combined, the 2017 CATs offered unique challenges. For example, insurers experienced higher loss adjustment expenses because the three major hurricanes took place within six weeks. On the positive side, insurers and reinsurers also developed new ways to work together to quickly pay claims.

New insurer efficiencies are great for policyholders. However, the CATs are a reminder of the nation’s chronic problem of the uninsured or underinsured. The major CATs of 2017 cost $306 billion in losses — the largest amount of weather-related economic losses in United States history. Insurers, rather than property owners and the government agencies, could have carried a greater portion of the cost.

Sadly, it is not surprising to see the high percentages of residential properties in hurricane vulnerable areas lacking flood coverage through the National Flood Insurance Program (NFIP). Coverage participation in the federal program has always been a problem. Even when NFIP policyholders and taxpayers help subsidize premiums for affordability, too few still purchase it. To make matters worse, it is common for homeowners insurance policyholders to believe flooding due to weather is covered. Generally, it is not.

Ironically, the wealthy know insurance is a good bet. After last year’s wildfires in California, property owners are rebuilding homes after filing claims at $1 million a piece!

_______________
…there is no negotiating with Mother Earth…
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But there is also a deeper lesson. Experts predict future CATS can be more damaging and dangerous. Since there is no negotiating with Mother Earth, it is time for some tough love. Building in potentially dangerous areas must stop.

Consider Hawaii’s Big Island this year where paradise turned to a fiery hell. Hedging their bets, people built in harm’s way despite warnings. As a generous lot, Americans rightly open our hearts and wallets to help victims. Now they need to live on safer ground. Financially helping property owners in vulnerable areas to move is one possibility. While the idea makes me wince for several reasons, the big short-term cost would save lives and promises to be less expensive in the long term.

Broadening Sustainability

As my Actuarial Review article concludes, the CATs of 2017 call us to prepare for the CATs of tomorrow.

Beside relocating people from vulnerable areas, I believe the CATs of 2017 should also mean broadening the definition of environmental sustainability to include building structures that will last the test of time. The environment will be better off when we reduce the use of the earth’s resources for rebuilding in CAT-vulnerable areas.

Accused of being an idealist, I see a potential future when a home’s value is not about landfill-bound luxuries, but its structure for strength and sustainability. A “smart home” could mean residential structures built to withstand the test of time rather than those featuring technological Internet of Things gizmos that can increase vulnerabiilty to another risk: cyber attacks

It can be done. Changing the American mindset towards littering and recycling en masse is one example. Growing up in the 1970s, I remember people thoughtlessly threw their garbage out of their car windows. Highways, once lined with nasty debris, are much cleaner now thanks to public awareness and fines for littering. Recycling was considered a huge bother 25 years ago but now Americans do it without giving it a second thought.

If awareness can inspire people to stop littering and start recycling, then it is possible to change the perception of what makes a home valuable. Changing perception requires a consortium of citizens, insurance companies, politicians and governmental agencies that can wield an effective public awareness campaign. By saving lives, the environment and money, the effort would be worth it.

 

 

 

 

 

 

 

 

 

 

 

 




Driverless Cars Not Proven To Be Safer

There is no proof that driverless cars will be safer than human drivers.

I found myself saying that aloud to a radio ad yesterday. In explaining his support for driverless car experimentation in Michigan, Governor Rick Snyder notes that 94% of accidents are caused by human error. The implied assumption is that driverless cars will be safer.

Driverless cars are not yet proven to be safer.

There’s no proof that driverless cars will be safer than mere human beings.

That statistic bandied about by driverless car advocates has nothing to do with automated vehicle safety. It derives from 2005 to 2007 data in a study released a decade ago – before driverless cars were “a thing.”

This is just one of the critical issues concerning driverless cars I discuss in my most recent article, Driverless Utopia. Besides delving into driverless car safety, the piece also cites new risks driverless cars can introduce, such as vehicular hackability as well as liability issues. As the cover story for the May/June issue of the Casualty Actuarial Society’s Actuarial Review, it offers the critical perspective of actuaries. Their rubber-hits-the-road view deserves more attention because actuaries anticipate risk potential when determining insurance rates.

Actuaries who looked into the 93% statistic, which is based on a 2008 National Highway Traffic Safety Administration (NHTSA) study, conclude that 78% of accidents – not 93% — are due to human error. The article dives into the actuarial analysis even more.

Driverless Reality

We don’t know how safe driverless cars are — for several reasons. These are:

  • There is no national clearinghouse tracking data regarding driverless car safety. Basic information, such as fatalities and accidents related to automated technology, is not publically available in one place. Actuaries want driverless car manufacturers to share data so insurers can anticipate the risk insurers cover. That is not happening.
  • The lack of apples-to-apples comparisons between driverless cars and human-driven conventional vehicles in similar scenarios. Existing research considers different issues. And the conclusions vary. Further, driverless car experiments are taking place in near perfect driving conditions where accidents are less likely anyway. Also, since automated cars cannot handle inclement weather or a quick Bambi crossing, imperfect humans who take the wheel can still be at fault.
  • The pass off risk between automated systems and human drivers is huge for determining safety and liability. That point of transition, when automated vehicular technology senses danger and mere humans have to take control is fraught with problems.
    The first automated vehicle technology fatality in the United States took place in 2016 when a Telsa hit a truck moving across a highway. It appears the driver did not take control of the vehicle soon enough. Getting to the why not only reveals the complexity of fault but the difficulty in determining it. The National Transportation Safety Board and NHTSA conducted separate investigations. One emphasized that the technology did not alert the driver in time. The other stressed that the driver was not responsive enough. (See my article for more details.) (A similar fatality took place last month in California.)A fatality in March reportedly occurred because the Uber-affiliated car did not detect the female pedestrian walking at night in Tempe, Arizona. It also appears the back-up driver was distracted. Still under investigation, the video is available here. (Warning: it’s quite graphic.) 
  • Driverless cars might decide who dies.  One study shows the cars favor saving younger people rather than the elderly. 

Finally, as my first driverless car article notes, if driverless cars are safer than human drivers, it is likely because the car will be programmed to follow traffic laws – to the letter. Lower the speed and the accidents decline, even when people are driving.

Parting Thoughts

I’m not against driverless cars. However, I am troubled by rhetoric that presumes driverless cars will be safer without sufficient proof. The logic that driverless cars will be safer because human error is the primary cause of accidents is faulty and misleading.

The safety issue might not matter anyway. In the next 10 to 15 years, I believe the average consumer will be depending on taxi-like automated vehicles, figuring that cars are risky no matter who – or what – is driving them.

And since the cars will be in a constant state of technological improvement for at least the next couple decades, they will be too costly for average consumers to own, insure, maintain and repair. Already, minor fixes, such as replacing a driver’s side mirror, cost more than the typical $500 insurance deductible due to all the connecting sensors.

My hope is Americans and public policy makers will demand greater transparency from technology companies. Automated vehicle technology is just one more area where consumers should know more.

 

 

 

 

 

 

 

 

 

 

 

 

 

 




Insurers Begin to Include Rising Sea Levels into Rates

Rising sea levels threaten coastal properties.

Damage from Hurricane Matthew

Insurers are beginning to introduce rising sea levels into rates, according to my latest article, “The SLR Factor: As sea levels rise, the flood risk equation changes.” It was published recently in the Casualty Actuarial Society’s Actuarial Review magazine.

The National Flood Insurance Program (NFIP), the nation’s largest insurer of homeowners’ flood insurance, is beginning to factor in sea level rise. So are excess insurers and reinsurers. However, rising sea levels could also affect the appetite for private homeowners insurers looking to compete with the NFIP. 

While the “21st Century Flood Reform Act” is yet to pass, the omnibus budget bill signed by president Trump last Friday allows NFIP’s reauthorization. The controversial budget bill gives the Federal Emergency Management Agency (FEMA) a necessary financial boost for mapping and mitigating flood risk.

Rising Sea Levels: The Reality

For the scoffers who do not take rising sea levels seriously, consider places such as New Orleans where land is subsiding. Or Norfolk, Va. where rising king tides flow onto nearby streets. A single drop of rain, by the way, does not cause these tides. Instead, they happen when the earth makes its predictable pull with the sun.

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“too many properties not covered for weather-related flood damage.”
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What are the implications for rising sea levels?

  • Covering homes and businesses near the East and Gulf coasts will become more expensive.
  • Some owners will likely have to abandon their property to the tides. This has already happened in New Orleans.
  • Flood exposure will spread, affecting properties once believed to be lower risk. It also means changing weather patterns that will introduce more potential catastrophic weather events.

    Beyond that, rising sea levels will affect governmental entities that need to pony up for expensive flood mitigation. As I write in the article, however, “It is difficult to convince politicians and voters to invest money into problems that are decades away, especially when rising sea levels are too often mired in the politics of global warming.”

Vulnerable Property Owners

Even if sea levels remain stable, there are still too many properties not covered for weather-related flood damage.

Why? Because many homeowners fail to realize that their insurance generally covers flooding caused by something inside the house, such as a leaking pipe. People believe they do not need flood coverage from the NFIP until it is too late. And some irresponsible residents count on FEMA to bail them out instead of buying coverage from NFIP.

And don’t think your property is safe because a FEMA map says so. As I explain in a previous article covering the NFIP, many maps are out-of-date. Further, specific property details can be more critical than zone location.

Rising sea levels will affect more property owners. Insurers are preparing, shouldn’t you?

 

 




Flood Insurance Requires Vision by Congress

Encouraging private carriers to offer flood insurance requires vision.

Encouraging private carriers to offer flood insurance requires vision.

Creating a public/private partnership for flood insurance requires vision by Congress.

That’s my conclusion after writing my latest Actuarial Review article, Legislative Levee.

Unfortunately, there is little time for overall vision when Congress must approve the reauthorization of the National Flood Insurance Program (NFIP) by September 30th. Since my article crystallizes many of the issues concerning flood insurance, my hope is it will encourage greater public policy discussion.

Right now, most homeowners and small businesses can obtain flood insurance only through NFIP. That’s because, in general, private insurers could not profitably offer flood insurance when the NFIP got started in 1969.

Congress began the NFIP not only to provide flood insurance, but to meet specific congressional objectives that are sometimes contradictory. The idea behind the NFIP is to make coverage for weather-related flooding both affordable and available for homeowners, renters and small businesses. Public policy objectives also include reducing the taxpayer burden when the federal government needs to help victims suffering from flood losses.

While criticism of the NFIP abounds, keep in mind that for the past five decades, the NFIP has been better than nothing. Private insurers were also kept out of the market starting in the 1970s. That’s because federally backed home mortgages require purchasing flood insurance from the NFIP when these properties are in a flood zone.

New Developments Inspire Insurers

But now, there is a sizable amount of homeowners insurers that want to offer flood insurance again. The inspiration stems from significant recent developments. Not only do new weather and insurance models show promise of revealing profitable customers, but can also improve upon the NFIP’s more general approach to developing premiums. Reinsurers looking to diversify their portfolios are also willing to back insurance companies.

The implications of introducing private insurers into a market dominated by the NFIP are vast. That’s why changing how consumers can obtain flood insurance requires vision. The potential of Americans being able to have coverage for flooding regardless of cause in and of itself would be a big advantage. Too many Americans simply do not realize they need flood insurance. (This fails a congressional objective of ensuring as many Americans as possible are covered for external flooding.)

One major reason for misunderstanding stems from the maps the Federal Emergency Management Agency (FEMA) produces. (FEMA is the NFIP’s governing agency.) Too many Americans falsely believe their properties are safe if they are not in a FEMA flood zone. However, most homes can fall victim to external flooding for a myriad of reasons. For example, while not in a FEMA flood zone, my first home’s basement flooded when too much rain saturated the ground around my house.

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Too many Americans simply do not realize they need flood insurance.
______________

In the United States, flood insurance requires vision because entry of the private market would likely change the NFIP’s role. In short, the NFIP could become the market of last resort, thus limiting the agency’s ability to meet congressional mandates.

Currently, the NFIP relies on “profitable” policyholders to help subsidize other customers and reduce the NFIP’s $24+ billion debt to the United States Treasury. If the NFIP losses enough of those policyholders to private insurers, the agency would be hard pressed to meet its congressional mandates.

At the same time, the benefits to customers, including paying rates truer to their actual risk of flooding and being fully covered for flood damage, are too tempting to ignore. The private insurance market could also expand the population of covered property owners. That would help meet the congressional directive of making sure Americans who need flood insurance would have it.

If the NFIP cannot meet its mandates, taxpayers are likely to pick up the costs of paying down the debt to the United States Treasury. (That would kill one congressional directive.) The insurance industry has made it clear it has no interest in subsidizing rates as they do in some states for auto insurance.

Flood Insurance Requires Vision

These are just some reasons why developing a private/public partnership for flood insurance requires vision. My article digs deeper into the public policy objectives for the NFIP, which also must be understood when contemplating a great infusion of private insurers into the external flood market.

There are also several unknowns pertaining to private insurers offering flood coverage. For starters, the profit margins are unclear. Potentially subsidizing risks could mean lowering the profit incentive. The new weather models are largely untested by homeowners and renters insurers in the United States. If major flooding events continue, it could turn out that private insurers will have to raise rates to a point where insurance becomes unavailable once again for too many consumers.

There is also the regulatory conflict. Congress primarily controls the NFIP. Allowing politics to affect the NFIP has led to premium inequities and delay for meeting financial goals. The NFIP could also more greatly benefit from the new weather and insurance models to compete against private insurance companies. However, the agency lacks the agility that private insurers enjoy because it is dependent on congressional timing. Private insurers would be regulated by state insurance regulators, who have much more insurance experience than Congress.

Simply supporting private insurers to compete against the NFIP is does not answer all the public policy considerations that led to to the agency’s existence the first place. The NFIP and insurers would be playing the market game with different rules and requirements.

That’s why flood insurance requires vision to ensure public policy objectives are met as private insurers enter the market. Unfortunately, given the September 30th deadline to reauthorize the NFIP, there is little time for big picture conversations. The nation will likely witness a wait-and-see approach that supports an experiment to realize how private insurers benefit policyholders and taxpayers.

This promises to be messy, but the flood insurance situation is already that way.

To read my article on Hurricane Sandy’s effect on the NFIP, please click here.

 




The Portfolio

THE PORTFOLIO

insurance companies, actuarial firms, brokers, vendors, publications, associations — for more than 15 years, Insurance Communicators LLC, has served virtually every type of insurance industry organization. The published work below demonstrates subject matter expertise. To see specific types of public relations and marketing materials, please contact Annmarie.

Below please find blog posts on our most requested topics and our published work samples.

COMMUNICATIONS/MARKETING

 Click on the link for the archives

INSURANCE TOPICS

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WORK SAMPLES

Please note: The only work samples I can publish online are my articles. If you want to see samples of web text, advertisement copy, brochures…you get the idea, please contact me directly at annmarie@insurancecommunicators.com. Just let me know what kind of help you need and I will send you samples germane to your project.

Otherwise, enjoy my electronic portfolio! From actuarial to cyber insurance to workers’ compensation to legislation and technical advancements, my articles demonstrate my insurance expertise and commitment to providing unique and well-researched content. Enjoy!

Click on topic below to see our work

Fully Exposed – Leader’s Edge

Employees Want It All With Health Care – Business & Health

Structuring A New Health Plan – HR Magazine

Six Ideas toBoost Productivity– Business & Health

Interview with David Satcher, former U.S. Surgeon General- Business & Health

PEOS Streamline HR Tasks – In Business Las Vegas

FMCA Considers Comments on Minimum Responsibility Limits — AMWINS

The Case for Social Media – Contingencies

Social Media and the Job Search – Contingencies

The TRIA Challenge – Actuarial Review

Workers’ Compensation: Future Turbulence Ahead – Actuarial Review

More Buck for the Bang – Claims Advisor

Workers’ Comp Predictive Modeling – Contingencies

States of Confusion – AIA Advocate

Longshore_Act_Narrative – National Association of Waterfront Employers

The Gathering Storm in Workers’ Comp – Business & Health

The Evolution of Integrated Benefits Delivery in the United States – John Burton’s Workers’ Compensation Policy Report

The Soaring Costs of Workers’ Comp – Workforce Magazine

Workers Compensation Savings Strategies – Workforce Magazine

Workers’ Comp Options Bring LIttle Change – In Business Las Vegas




Driverless Cars: Beyond the Hype

Driverless cars promise get people around more safely. However, the basis for that assumption is often backed up by old statistics that were not considering the safety of autonomous vehicles.

In fact, not long after I submitted my Actuarial Review article about driverless cars, “60 Minutes” presented a segment, “Hands off the Wheel” on the same subject.AR_Nov-Dec_2015 Cover

Since I had intensely researched the topic, I could not wait to hear what the reporter would tell the general public. Instead of investigative journalism, the segment gave the driverless car industry a boost with little mention of the many unresolved issues and potential unintended consequences.

At its beginning, the reporter said “almost all” car accidents are caused by driver error, noting the safety potential of driverless cars. The truth is, nobody really knows how safe driverless cars will be.

The often-quoted statistic by driverless car advocates is that 93 percent of car accidents are caused by human error. The logic is that by reducing the opportunities for driver mistakes, automated vehicles will be safer.

The statistic and its assumptions, which were also presented as testimony before the U.S. Congress, are very important because they guide the assumptions and expectations of driverless cars. Google also boasts that all of the accidents involving its cars were due to human error.

But when the rubber hits the road, it’s the insurance industry’s opinion that counts. Its actuaries not only have the most experience looking at the factors that lead to accidents, but the industry will be responsible for covering them.

My article, Destination Driverless: Will Vehicles – Not Drivers – Become the Center of Risk?, sets the record straight about the all-important 93 percent statistic thanks to actuarial analysis provided by the Casualty Actuarial Society’s Automated Vehicles Task Force.

The task force concluded that automated technology could only address 78, not 93 percent of accidents if it cannot overcome factors such as weather, vehicle errors and inoperable traffic control devices. Using the 93 percent statistic, the task force also asserts, is problematic for other reasons.

Stemming from a National Highway Transportation Safety Administration (NHTSA) study, the statistic had nothing to do with driverless cars. And, due to its age, the study could not anticipate the latest safety improvements to conventional vehicles.

So what do actuaries need to have a better idea of the potential costs of insuring driverless cars? Access to proprietary data that developers and manufacturers naturally are not quick to share.

My article also details other factors that should be considered – especially when human drivers must take the wheel of automatic vehicles. It also covers the challenges that developers must overcome to make them viable in the real world.

What does this mean to the average consumer? Excitement about driverless cars abounds, but nobody sees a significant population of driverless cars for another 20 years.

In the meantime, we can expect driverless cars to gradually join the traffic jam. That transition, in and of itself, could also lead to unintended consequences.




Reinsurance Surplus Subdues the Premium Tide

The reinsurance industry has reached its highest surplus in history – about $515B.Leader's Edge logo

This is despite the fact that 10 of 12 of the nation’s most costly storms happened in the past decade.

To find out why, check out my most recent Leader’s Edge article, “Survivor: The past decade set natural disaster records, yet most carriers went unscathed and its sidebar, Could Flood Insurance Go Private?

The primary reason for the reinsurance industry’s all-time high surplus can be answered by a James Carville quote.

“It’s the economy stupid.”

Thanks to the worst recession in U.S. history and its sluggish recovery, investors are finding reinsurance to be a more lucrative choice than traditional investments, like bonds.

This not only means that CAT reinsurers are handling some of the most expensive weather disaster years in history, but that larger insurers are generating enough investment money to keep premiums from rising as quickly as they otherwise would.

Reinsurance is looking pretty good right now, which is why some members of Congress are looking into potential ways that reinsurance can help underwrite the $22B debt-laden National Flood Insurance Program. (To read more about NFIP, check out my Contingencies article on the subject by clicking here.) That can be challenging, however, given the NFIP’s contradictory goals of providing affordable flood coverage to Americans while reaching toward Actuarial soundness.

I hope you’ll check out my article and let me know what you think.




Workers’ Comp and Safety Programs Need a Culture of Sharing

Help employees report accidents, near misses and workers' compensation forms.

Help employees report accidents, near misses and workers’ compensation forms.

We talk a lot in workers’ compensation about employers having a culture of caring. Employers and employees also benefit from what I call a culture of sharing.

In a culture of sharing, employees are aware of what kind of information management needs to improve the company’s safety and workers’ compensation programs. Employees are also empowered to share information freely without negative repercussions. They also have the tools necessary to freely communicate important information to their employers.

There are three important ways a culture of sharing can help employees and employers alike. They are:

  • report accidents immediately;
  • report near misses right away; and,
  • report the need to file for workers’ compensation as soon as possible.

For many employers, gleaning important information requires a culture change supported by policies, procedures and effective employee communication.

Reporting accidents immediately should be a given. It is common sense that the sooner an employer knows of an accident, the sooner corrective actions can occur.

Features of a solid investigations program include:

1)    Employees and supervisors have clear knowledge of where to report injuries. Whether it is a 1-800 number, intranet portal or paper file, all employees need to know whom to inform.

2)    Employees and supervisors must feel safe to report incidents. If they are worried about being penalized for lost productivity, they are less likely to file.

3)    There should be an emphasis on immediate reporting while the incident is fresh on the minds of witnesses.

4)    Accident investigators should be asking specific questions, such as:

  • equipment
  • accident type
  • shift
  • any unsafe conditions (such as poor housekeeping inside or weather outside)
  • how procedures were followed
  • responsible supervisor
  • what went wrong, such as a communication breakdowns
  • experience level of employee, and
  • employee age.

5)    If your company does not have an effective accident and near-accident program, there is a lot of great information online. I am impressed by a guide provided by the State of Washington. You can find it at: http://www.lni.wa.gov/Safety/Basics/Programs/Accident/APPCoreRuleGuide.pdf.

Reporting the accident that almost happened can also inform workplace incident prevention programs. Include near misses that occur with customers or other third parties.

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When a claim is filed affects everything from how quickly an employee recovers to the likelihood of the claim being litigated.
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Near misses are common. Perhaps it was a almost from a rug or wrong move on a piece of equipment. If one person trips, someone else can as well.

Whatever it was, it could happen in the future. It makes perfectly good sense but this is easy to forget. Near misses generate sighs of relief and the urge to move production forward.

Employers need to take the fear out of reporting near misses. Supervisors and workers need to be assured that investigating potential accidents is more important than moving on for productivity’s sake. And, that doing so is just as important as investigating accidents.

Before encouraging supervisors and employees to report near misses, employers should make sure their incident reporting program is sound (see first section). Ask the same information as with accident reporting, but consider using a different colored form for near misses so they are not confused with accidents.

Employees and supervisors might not be aware of why near misses are important. Here, employee communication programs are important to help employees understand why.

Employees need to see that near misses result in action from management; such as: repairing equipment; use modifications; retraining or signs reminding workers of safe work practices.

Reporting a workers’ compensation claim. All the effort to improve workers’ compensation – from public policy to the claims process – will only go so far if workers’ compensation claims are not immediately filed and addressed.

When a claim is filed affects everything from how quickly an employee recovers to the likelihood of the claim being litigated. (For more on this, please see my blogs on why injured workers hire attorneys and what injured workers should know about workers’ compensation.)

How can employees be encouraged to file claims as soon as possible?

1)    Urge them to file ASAP. How well the workers’ compensation process works says a lot about the trust between the worker and their boss.

This, of course, is a much bigger issue than a workers’ compensation claim, but points to the company’s culture of caring and sharing. Some employers are worried that non-occupational claims will be filed. Let the insurers figure that out. The key is getting the worker taken care of right away.

(Click employee communication plans and ideas for an employee workers’ compensation surveys to read my blogs on these topics. Also, I will be writing more about culture of caring –and determining it — in a future blog.)

2)    Tell them where to file. Just like reporting accidents and near misses, it does not matter how they file — whether it is a 1-800 number, intranet portal or paper file – as long as they know where to file.

3)    Offer to help in any way possible. There are so many ways to assist injured workers. Help them fill out the claim form (except personal medical information), take them to the doctor and tell their spouse about the company’s EAP program. My blog on the supervisor’s role in workers’ compensation will tell you more.

There is a lot more that can be said about a culture of sharing that supports critical reporting by employees. Please add your suggestions below.

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