6 Types of Employees at Risk in Growing Companies
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Nothing is more important than getting claims resolved successfully. After all, at the heart of the insurance contract is the promise to cover losses.
That’s why the financial strength and claims reputation of carriers is so critical. These characteristics demonstrate a company’s ability and willingness to pay.
But when a business suffers a significant loss that severely limits its operations, there are several additional factors that will determine if the company will survive. In these circumstances, repairing the damage and getting back to work as fast as possible is critical.
Therefore, it’s vital to work with carriers who demonstrate these five traits:
Recovery is a race against time, and the clock starts ticking as soon as a loss occurs. Even with Business Interruption coverage, competitors will not be sitting idle waiting for your business to get back to work.
This is why speed is critical.
Waiting weeks or even months to receive a claim payment can seriously hinder a business’s ability to become fully operational again.
“Whether a loss is large or small, companies need some working capital in the early stages of recovery to put the business back together,” said Dean Owens, Head of Property and Special Risk Claims, U.S. and Canada, AIG.
AIG recognizes that need with its ‘AIG Property Claims Promise,’ which assures that policyholders will receive a payment of up to 50 percent of the agreed total loss estimate within seven working days, which accounts for cleanup costs, property repairs, and extra expenses incurred during the rebuilding process.
The willingness and ability to pay quickly also shows clients that their insurer has the resources to support them for the long haul, even in the event of large losses.
In 2016, for example, a large resort complex suffered a major fire that destroyed several hundred of its units and 70-90 of its buildings. Claims handlers were on the scene within two days, while the fire was still smoldering. Seeing that it was a total loss, the AIG claims team expedited a $10 million advance within a week on what ultimately amounted to a multimillion dollar property claim. This working capital allowed the resort to kick off the rebuilding process immediately.
Your business and industry are unique. There are complexities and peculiarities that require experience and expertise to understand. Working with claims handlers that have deep knowledge about your industry means they understand your top concerns, and how to minimize them.
Property damage will impact a casino differently than it impacts a real estate developer, for example.
“A claims handler with casino loss experience knows that a property claim is as much about the business interruption as it is the physical damage. A casino could suffer a very significant business interruption loss in a single day,” Owens said. “You need to understand your clients’ revenue streams, and how to best mitigate losses in the event of a property claim.”
Pairing the right claims handler with the right client is part of AIG’s credo of operational excellence.
“We always want to bring someone to the table who has specialized knowledge of client’s industry segment, and who has the right skills to handle the types of claims that clients are likely to have. It’s about matching the right skills and resources to the right customer,” Owens said.
Relationships matter. To respond quickly and effectively, a claims team that is familiar with the decision-makers in your business needs to be in place before the loss. No risk manager or executive should be meeting their claims person for the first time when they’ve just suffered a loss.
Whether an insurer has an in-house claims staff or contracts with external adjusters – or a combination of both – a claims representative should ideally be meeting with clients face-to-face as often as possible.
“We strive to get in front of the clients as often as we can,” Owens said. “We want to get claims handler at the table with clients, brokers and underwriters so everyone is on the same page. And we want our clients to know that their claims handler is their single point of contact if they have a loss. No back-and-forth or roundabout communication.”
AIG’s internal Property Claims Field Group, which is involved in about 40 percent of cases that tend to involve smaller claims, further streamlines the process. External adjusters remain critical for large claims, though, especially when multiple insurers are involved.
“We partner with some excellent outside firms, but wherever we can do something ourselves, we do it ourselves,” Owens said. “It puts us in front of the clients, and a stronger relationship leads to an expedited claims process.”
Claims data holds incredible value if properly utilized. Important insights can be gleaned from loss history about specific exposures, and a better understanding of exposures can be leveraged to improve the coverage and pricing of your risk portfolio.
But to achieve these benefits, the data needs to be tracked consistently, at a granular level and across your global portfolio.
Underwriters who have an integrated view of global claims data can see how much of a claim is for business interruption losses versus property damage. Maybe one or two locations out of a portfolio of 12 are sitting in a hail zone and are responsible for the bulk of large claims. This insight allows them to adjust their underwriting to better match the risk profile of that particular client.
“It’s about making sure you understand what you’re insuring,” Owens said. “Having this data enables the underwriter, the client and the broker to make more informed decisions.”
AIG’s IntelliRisk® system allows clients to directly access that data through an online portal. Along with detailed claims data, it provides tools to run ad hoc loss runs in real time and monitor open claim activity.
Across the insurance industry, talent development and continuity is a pressing challenge that many acknowledge, but few have taken initiative to solve.
AIG continually feeds its talent pipeline by hiring a few interns every year and investing in their development. All of AIG’s handlers go through regular training to keep their knowledge fresh. That could include a course on hail damage or the roof rebuilding process, or some other technical aspect of property risk.
“It keeps their expertise on the leading edge of a skill set,” Owens said.
Staying sharp and continually building talent is also key to maintaining clients’ trust and confidence.
“You’re only as good as your last claim,” Owens said. “We aim to make each claim an excellent experience for our insureds every time.”
To learn more, visit: http://www.aig.com/globalproperty.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with AIG. The editorial staff of Risk & Insurance had no role in its preparation.
When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.
Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.
For some reason, a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.
The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.
Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.
Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.
“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.
“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).
When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.
Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.
More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.
Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.
Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.
While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.
“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.
“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.
“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”
If something goes amiss, exposure may fall to many different parties: the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.
Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?
“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh
Is it a workers’ compensation case or a liability issue?
“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.
But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.
In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.
“It’s going to be unique each time,” Kyte said.
“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.
Privacy is another consideration.
If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.
A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.
There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.
He suggests companies take several mitigation steps before introducing cobots to the workplace.
First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.
Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.
The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.
“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.
“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.
“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.
Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.
AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.
Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.
“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &