6 Emerging Risks to Health Care Workers
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Tight budgets are nothing new for public entities, but now several economic and litigation trends make managing finances—and risk—even harder.
Revenue streams are stressed by minimal gains from property and sales taxes and constraints of conservative state and local fiscal policies. Decreased budgets mean schools and municipalities have to decide where to spend their dollars, leading to potential gaps and vulnerabilities. Buy new textbooks, provide more training, or purchase additional insurance coverage?
In this environment of budget limitations, trends in employment practices liability claims are adding to the challenges.
Regulations like the American with Disabilities Act (ADA) and Family and Medical Leave Act (FMLA) provide important protections for employees and help create fairness and equality in the workplace. If an employer is not compliant with these and other discrimination regulations, an employee can file a charge with the Equal Employment Opportunity Commission (EEOC). For the second year in a row, the number of charges have increased—in 2016, the EEOC brought 91,503 workplace discrimination charges against private, state and local government and federal workplaces, fining them a total of $482 million.
“Age discrimination, harassment, wrongful termination, and failure to promote are all sources of employment practices liability (EPL) claims,” said Susan Kostro, Chief Underwriting Officer, Public Entities Practice, Liberty Mutual Insurance. “These regulations help to protect employees and maintain a safe workplace, but addressing the claims can have a substantial financial impact on an organization.”
Even if a school or municipality has processes to help ensure it maintains compliance, situations with employees alleging discrimination will likely arise, some of which may turn into employment practice liability lawsuits and costly claims.
Schools and municipalities have some protection from these claims through sovereign immunity, which traditionally limits the situations and circumstances under which a public entity can be held liable. However, the circumstances in which immunity may apply appear to be narrowing in some states, increasing potential exposure for public entities.
The cost of defending a claim is also increasing.
Tort caps limiting the amount of damages that can be awarded to claimants have risen. According to an 2014 Advisen report, defense costs alone for EPL claims can reach as high as $300,000.
For a school or municipality, whose main focus is to serve its community, claims of harassment or discrimination can do much more reputational harm if those allegations become public.
“A local government needs to fight hard to get back in constituents’ good graces and regain trust,” Kostro said.
These factors can add to liability and make it more difficult to mitigate risks within existing financial constraints. It’s imperative for public entities to identify and resolve problems early before they evolve into claims.
Many schools and municipalities are self-insured, sometimes participating in risk pools. But these entities may miss out on the risk control services that come with coverage from an insurer with specialized expertise in the industry. For example, Liberty Mutual offers customers a variety of training and resources in areas such as school violence, emergency planning, and school bus and classroom safety.
The company’s HR Risk Management Service program, offered through a third-party partner, includes a toll-free helpline and website to help public entity risk managers be proactive and resolve potential employment issues before they turn into claims.
“Risk managers can learn, for example, how to put together a thorough employee handbook, which can help to clarify hiring and employment practices and establish a reference should claims arise,” Kostro said.
For a more consultative, one-on-one experience, clients can use the 24/7 helpline to speak to legal professionals and get help in navigating through some of the issues they may face.
“Through the helpline, risk managers have free and unlimited access to legal professionals each with expertise in this field, in his or her particular state,” Kostro said. “This is critical, because standards can vary state by state.”
The helpline is anonymous and private, which encourages a candid exchange of information.
“It’s like having an attorney on retainer without having to pay the retention,” Kostro said
This new service can help extend available resources, especially in those schools and governments where risk management and human resources are shared responsibilities.
A risk manager may call the helpline if, for example, a teacher reports feeling harassed. Or if a government employee threatens to sue for wrongful termination after being laid off.
“Before that complaint snowballs into a claim, the risk professional can seek advice to determine how best to work with the employee to resolve the issue, and better evaluate liability and next steps,” Kostro said.
“Access to this advice means that public entity risk managers don’t have to make the choice between hiring a lawyer and buying new school supplies.”
Offering the new HR Risk Management Service website and helpline is just one example of how Liberty Mutual works with clients to address their key exposures.
“We’re not just providing coverage; we’re here to help our clients manage their most challenging issues and lower the total cost of risk,” Kostro said.
Buying an EPL policy provides access to the preventive resources and expert guidance so risk managers can mitigate their exposures without any added cost.
“Insurance protection is just one piece of the risk management puzzle that ultimately helps public entities maintain professional and safe work environments so that they can continue to serve their communities,” Kostro said.
Choosing the right insurer that provides a holistic risk management solution can ultimately enable schools and governments to better manage their resources and avoid potentially unnecessary claim costs.
To learn more about Liberty Mutual’s coverage and services for public entities, visit https://business.libertymutualgroup.com/business-insurance/industries/public-entity-insurance-coverage.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.
R&I: What was your first job?
Bus boy at a fine dining restaurant.
R&I: How did you come to work in this industry?
I sent a résumé to Harrah’s Entertainment on a whim. It took over 30 hours of interviewing to get that job, but it was well worth it.
R&I: If the world has a modern hero, who is it and why?
The Chinese citizen (never positively identified) who stood in front of a column of tanks in Tiananmen Square on June 5, 1989. That kind of courage is undeniable, and that image is unforgettable. I hope we can all be that passionate about something at least once in our lives.
R&I: What emerging commercial risk most concerns you?
Cyber risk, but more narrowly, cyber-extortion. I think state sponsored bad actors are getting more and more sophisticated, and the risk is that they find a way to control entire systems.
R&I: What is the riskiest activity you ever engaged in?
Training and breaking horses. When I was in high school, I worked on a lot of farms. I did everything from building fences to putting up hay. It was during this time that I found I had a knack for horses. They would tolerate me getting real close, so it was natural I started working more and more with them.
Eventually, I was putting a saddle on a few and before I knew it I was in that saddle riding a horse that had never been ridden before.
I admit I had some nervous moments, but I was never thrown off. It taught me that developing genuine trust early is very important and is needed by all involved. Nothing of any real value happens without it.
R&I: What about this work do you find the most fulfilling or rewarding?
Setting very aggressive goals and then meeting and exceeding those goals with a team. Sharing team victories is the ultimate reward.
R&I: What is the most unusual/interesting place you have ever visited?
Disney World. The sheer size of the place is awe inspiring. And everything works like a finely tuned clock.
There is a reason that hospitality companies send their people there to be trained on guest service. Disney World does it better than anyone else.
As a hospitality executive, I always learn something new whenever I am there.
The risks that Disney World faces are very similar to mine — on a much larger scale. They are complex and across the board. From liability for the millions of people they host as their guests each year, to the physical location of the park, to their vendor partnerships; their approach to risk management has been and continues to be innovative and a model that I learn from and I think there are lessons there for everybody.
R&I: What is the risk management community doing right?
We are doing a much better job of getting involved in a meaningful way in our daily operations and demonstrating genuine value to our organizations.
R&I: What could the risk management community be doing a better job of?
Educating and promoting the career with young people.
R&I: What have you accomplished that you are proudest of?
Being able to tell the Pinnacle story. It’s a great one and it wasn’t being told. I believe that the insurance markets now understand who we are and what we stand for.
R&I: Who is your mentor and why?
John Matthews, who is now retired, formerly with Aon and Caesar’s Palace. John is an exceptional leader who demonstrated the value of putting a top-shelf team together and then letting them do their best work. I model my management style after him.
R&I: What is your favorite book or movie?
I read mostly biographies and autobiographies. I like to read how successful people became successful by overcoming their own obstacles. Jay Leno, Jack Welch, Bill Harrah, etc. I also enjoyed the book and movie “Money Ball.”
R&I: What is your favorite drink?
Ice water when it’s hot, coffee when it’s cold, and an adult beverage when it’s called for.
R&I: What does your family think you do?
In my family, I’m the “Safety Geek.”
R&I: What’s your favorite restaurant?
Vegas is a world-class restaurant town. No matter what you are hungry for, you can find it here. I have a few favorites that are my “go-to’s,” depending on the mood and who I am with.
If you’re in town, you should try to have at least one meal off the strip. For that, I would suggest you get reservations (you’ll need them) at Herbs and Rye. It’s a great little restaurant that is always lively. The food is tremendous, and the service is always on point. They make hand-crafted cocktails that are amazing.
My favorite Mexican restaurant is Lindo Michoacan. There are three in town, and I prefer the one in Henderson as it has the best view of the valley. For seafood, you can never go wrong with Joe’s in Caesar’s Palace.