6 Risks for Renewable Energy Construction
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#MeToo, #TimesUp – these hashtags and the movements they represent were originally focused on the entertainment industry and political figures.
But no longer.
Over the last few months many corporate executives have been outed for their inappropriate or illegal actions toward women in the workplace. And it seems that a new bold-faced name appears in the headlines each week.
These high-profile cases are just the tip of the iceberg. While the big names may grab headlines, no industry or company of any size is immune to the risk of workplace harassment. Increased awareness around the issue is emboldening others to speak up and sexual harassment is now an exposure knocking on the door of every boardroom.
“We’re in the midst of a culture shift where society is paying more attention to equality and safety in the workplace,” said Gregg Glick, Senior Vice President, Private/Not-for-Profit Practice Lead, Private/Healthcare Division, Allied World.
But while the spotlight is new, the issue at hand is not.
“As an insurer, we have long seen allegations of workplace harassment resulting in Employment Practice Liability (EPL) claims, including not just harassment but also hostile work environment and wrongful termination,” Glick said. “Our focus has always been on managing the risk by fostering a safe work environment. It’s not just about an insurance policy, it is about a culture.”
Establishing a corporate culture in which safety and respect are valued and protected is the best way to manage the exposure long term.
To create and continually reinforce this culture, companies need to reevaluate their policies, incident reporting procedures and response plans. To ensure up-to-date, clear and effective policies, they can rely on the risk expertise of insurers with experience in and commitment to the employment practices liability space.
Small companies may have no formal written policies whatsoever. And employers with outdated policies may also be underprepared to address the exposure.
“Policy effectiveness is determined by how contemporary and well-reviewed they are, and by how they are deployed and enforced in the workplace. This is where you’re going to start to build the culture that’s going to foster a safe environment,” Glick said. “Policies that are outdated, unclear, or not well-communicated to employees don’t achieve much.”
Employee handbooks that haven’t been updated in a decade may no longer be comprehensive enough to address that various realms and modes in which workers interact. For example, they likely do not account for the prevalence of smartphones and social media or address cyber bullying.
Employees also need a way to report inappropriate behavior safely. This could mean setting up an anonymous hotline managed by a third party, or a private way to notify human resources. It has to be more robust than simply having employees report incidents to their direct manager.
“What if the manager is the harasser?” Glick said. “Few people would be willing to confront him or her directly and risk threatening their job status. Employees need to know how to share information with someone who’s going to help them. These policies have to be clear, easy to follow, and communicated often.”
Once an employee files a complaint, there also must be clear investigation procedures.
“Given the amount of public attention on sexual harassment in the workplace, companies may be inclined to take immediate action because they don’t want to look like they stood by and did nothing,” Glick said. “Every allegation must be taken seriously, but companies need to be able to conduct thorough investigations.”
Making a reactionary decision like terminating or suspending the accused on the spot could result in a wrongful termination claim if it turns out there was no bad behavior, and damage the company’s reputation.
If an investigation corroborates an employee’s claim and someone is guilty of inappropriate or hostile behavior, a clear response protocol should dictate next steps. A zero-tolerance policy ensures that a company’s response is consistent across the board, regardless of the severity of the claim or the position of those involved.
Every step that would normally be taken to terminate an employee should remain in place, and documented thoroughly. Rushing through an investigation or skipping steps of the process can be a violation of employment law and open a company up to wrongful termination lawsuits.
“Not every incident is preventable. There will always be bad apples, but your culture is defined by how you respond,” Glick said.
Crystal clear procedures make it easier to catch, investigate and respond to incidents, but crafting these policies to be compliant and accessible to employees can be challenging, especially for small and mid-size companies with more limited resources.
Tools are available in the marketplace to help risk managers strengthen their defenses.
Third party risk management consultants and service providers can help companies stay up to date on their state’s employment laws via monthly updates and real-time alerts. Training modules for employees also remind them of the consequences of inappropriate workplace behavior and reinforce company policies. Portals and libraries for human resource managers provide template forms and posters, additional training materials, and regulatory news.
Some also offer handbook-building tools, which allow companies to craft custom policies that are applicable to their workforce while remaining compliant with federal and state law. This can help firms update existing policies or create completely new ones.
Around-the-clock helplines are another critical resource that risk managers would be remiss not to take advantage of. Employment practices attorneys with state-specific expertise are on call to answer insureds’ questions and offer advice, free of charge.
“This is an opportunity to have an experienced attorney walk you through a situation before it turns into a claim. If someone has a complaint, and you’re unsure of the proper protocol, how to launch an investigation, or what is required by law in your state, the answer is only a phone call away,” Glick said.
“We offer a 24/7 helpline, among other services, through our relationship with the workplace HELPLINE, powered by Enquiron®, a risk management consulting firm. Companies that utilize these services proactively position themselves for better claim outcomes.”
Unfortunately, many HR managers and risk professionals are unaware of services, missing opportunities to mitigate their exposure and avoid potential claims. Rather than leave insureds to find these resources on their own, Allied World works with brokers to educate them about their offerings from the time a policy is bound.
Amid a societal shift demanding change, companies can expect employment practices insurance coverages to shift as well. Awareness will likely drive up claim frequency, and settlements for EPL lawsuits are climbing. As a result, rates could trend upward as well.
“Brokers can anticipate some market hardening, rising rates, tighter terms and conditions,” Glick said. “We have always been careful and thoughtful about risk selection, and thus are well positioned to not have to react hastily amid the culture shift and changing market conditions. All insurers in this space should be proactively analyzing their books to ensure they are accepting the right risks.”
Allied World evaluates each risk on its own merits, looking at criteria like industry type, employee size, and region. It carefully evaluates its portfolio on a regular basis to check its aggregate risk and limits. This means they are positioning themselves to stay competitive in the market over the long haul and avoid sudden changes in terms and conditions or rates.
“And that’s what you want in a partnership – no surprises,” Glick said. “We’ve been in the market for 10 years. We understand the needs of mid-size companies, and are committed to meeting those needs consistently.”
Communication with brokers and insureds is key to staying ahead of the risk and positioning every party to be prepared for changes in the exposure itself and the market landscape. Allied World’s senior leaders, each with an average 10 years of experience in the field, undergo continual education around the changing nature of the risk and regulatory landscape. Deployed throughout the country, they are always on-hand and accessible to answer insureds’ questions.
To learn more, visit https://www.alliedworldinsurance.com/.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Allied World. The editorial staff of Risk & Insurance had no role in its preparation.
Underwriters have plenty to worry about, but there is one word that perhaps rattles them more than any other word. That word is aggregation.
Aggregation, in the transferred or covered risk usage, represents the multiplying potential of a risk. For examples, we can look back to the asbestos claims that did so much damage to Lloyds’ of London names and syndicates in the mid-1990s.
More recently, underwriters expressed fears about the aggregation of risk from lawsuits by football players at various levels of the sport. Players, from Pee Wee on up to the NFL, claim to have suffered irreversible brain damage from hits to the head.
That risk scenario has yet to fully play out — it will be decades in doing so — but it is already producing claims in the billions.
This year’s edition of our national-award winning coverage of the Most Dangerous Emerging Risks focuses on risks that have always existed. The emergent — and more dangerous — piece to the puzzle is that these risks are now super-charged with risk multipliers.
Take reputational risk, for example. Businesses and individuals that were sharply managed have always protected their reputations fiercely. In days past, a lapse in ethics or morals could be extremely damaging to one’s reputation, but it might take days, weeks, even years of work by newspaper reporters, idle gossips or political enemies to dig it out and make it public.
Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.
These days, the speed at which Internet connectedness and social media can spread information makes reputational risk an existential threat. Information that can stop a glittering career dead in its tracks can be shared by millions with a casual, thoughtless tap or swipe on their smartphones.
Aggregation of uninsured risk is another area of focus of our Most Dangerous Emerging Risks (MDER) coverage.
The beauty of the insurance model is that the business expands to cover personal and commercial risks as the world expands. The more cars on the planet, the more car insurance to sell.
The more people, the more life insurance. Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.
As Risk & Insurance® associate editor Michelle Kerr and her sources point out, growing populations and rising property values, combined with an increase in high-severity catastrophes, threaten to push the insurance coverage gap to critical levels.
This aggregation of uninsured value got a recent proof in CAT-filled 2017. The global tally for natural disaster losses in 2017 was $330 billion; 60 percent of it was uninsured.
This uninsured gap threatens to place unsustainable pressure on public resources and hamstring society’s ability to respond to natural disasters, which show no sign of slowing down or tempering.
A related threat, the combination of a failing infrastructure and increasing storm severity, marks our third MDER. This MDER looks at the largely uninsurable risk of business interruption that results not from damage to your property or your suppliers’ property, but to publicly maintained infrastructure that provides ingress and egress to your property. It’s a danger coming into shape more and more frequently.
As always, our goal in writing about these threats is not to engage in fear mongering. It’s to initiate and expand a dialogue that can hopefully result in better planning and mitigation, saving the lives and limbs of businesses here and around the world. &
Growing populations and rising property values, combined with an increase in high-severity catastrophes, are pushing the insurance protection gap to a critical level.
Crumbling roads and bridges isolate companies and trigger business interruption losses.
Social media — the very tool used to connect people in an instant — can threaten a business’s reputation just as quickly.
AI has potential, but it comes with risks. Mitigating these risks helps insurers and insureds alike, enabling advances in almost every field.