2016 Teddy Awards: Honorable Mention

Advocating for Injured Workers

By helping employees navigate through the workers' comp system, Cottage Health decreased lost work days by 80 percent.
By: | November 2, 2016 • 3 min read

Cottage Health was having trouble returning injured workers to the job. In 2014, the nonprofit hospital system recorded an all-time high of 1,953 recordable lost days.

In 2016, the three-hospital system in the Central Coast Region in California is on track to reduce that number to 400 – an 80 percent decrease in lost work days.


The health system managed the impressive turnaround by modifying its transitional return to work program, hiring a workers’ compensation case manager and working to educate both managers, employees and medical providers about the opportunities and benefits of returning workers to the job as quickly as possible.

“Keeping somebody engaged at work returns them to their full capacity sooner,” said Angeli Mancuso, manager, employee health and safety at Cottage Health. “There’s a psychological component. When you get used to not working, even two weeks off, sometimes it makes it very difficult to come back.”

Rose Hatmaker, workers’ compensation case manager at Cottage Health, says the health care organization “works as an advocate for the injured workers.”

“It’s a team effort to return injured workers to a productive lifestyle in their position,” she said.

Angeli Mancuso, manager, employee health and safety, Cottage Health

Angeli Mancuso, manager, employee health and safety, Cottage Health

Hatmaker helps employees navigate the workers’ compensation system by directly communicating with occupational health physician partners, expediting physical therapy appointments, discussing treatment plans with physicians and assisting employees with any questions they have related to claims process, handled by third-party administrator Sedgwick.

Hatmaker also put together a job bank that helps her match jobs and abilities within the health system with injured employees.

But the worker advocacy program required pushing our culture forward, said Mancuso.

While she worked with the management team to educate them on the benefits of bringing injured employees back on modified duty, Hatmaker was brought on board in 2015 to work with the employees, physicians and service providers.

Cottage Health uses a tiered return-to-work program that first tries to place injured employees in their home department. If physical limitations make that impossible, employees are assigned to a different department in their own hospital or another in the system. As a last resort, employees are assigned to a nonprofit organization as a volunteer. The last option was added to the program as part of the goal to reduce lost days.

“You can utilize their brain if they are physically unable to do the job.” Angeli Mancuso, manager, employee health and safety, Cottage Health

Use of the modified duty options have had peaks and valleys over the years, said Molly Kellogg, employee health and safety consultant, “but we’ve never had as much buy-in or variety as we do now.”

Mancuso remembered one manager who declined to bring back an injured physical therapist because of limitations. After another therapy department in the hospital agreed to bring the therapist on to speak to patients on the phone, the first manager changed his mind. They ended up sharing the employee’s time, she said.

“You can utilize their brain if they are physically unable to do the job,” Mancuso said.

Cottage Health also, of course, strives to prevent injuries from occurring, and has a robust training program and safety tools to maintain employee health.

A safe-patient handling system is a key part of that, and any new construction or remodeling almost always includes ceiling lifts in all rooms as well as mobile equipment at existing facilities. When the program began in 2009 at a cost of $6 million, there were 41 preventable patient handling injuries. In 2015, there was one.


The health care system also concentrated on its sharp safety program to prevent blood exposure among health care workers. Research at the hospitals revealed that surgical technicians had the highest incidence of needle sticks and other sharps injuries. It had been presumed that resident physicians had the highest rate.

By increasing education, the needle stick rate for surgical technicians decreased from 25 percent in 2014 to 14 percent in 2015.

Cottage Health begins its safety training at new employee initiation sessions and pursues safety awareness at departmental staff meetings. In addition it has a multi-disciplinary committee that includes representatives from many areas throughout the system to focus on “environments of care.” &


Read more about the 2016 Teddy Award winners:

target-150x150Bringing Focus to Broad Challenges: Target brings home a 2016 Teddy Award for serving as an advocate for its workers, pre- and post-injury, across each of its many operations.


hrt-150x150The Road to Success: Accountability and collaboration turned Hampton Roads Transit’s legacy workers’ compensation program into a triumph.


excela-150x150Improve the Well-Being of Every Life: Excela Health changed the way it treated injuries and took a proactive approach to safety, drastically reducing workers’ comp claims and costs.


harder-150x150The Family That’s Safe Together: An unwavering commitment to zero lost time is just one way that Harder Mechanical Contractors protects the lives and livelihoods of its workers.


More coverage of the 2016 Teddy Awards:

Recognizing Excellence: The judges of the 2016 Teddy Awards reflect on what they learned, and on the value of awards programs in the workers’ comp space.

Fit for Duty: 2013 Teddy Winner Miami-Dade County Public Schools is managing comorbid risk factors by getting employees excited about healthy living.

Saving Time and Money: Applying Lean Six Sigma to its workers’ comp processes earned Atlantic Health a Teddy Award Honorable Mention.

Caring for the Caregivers: Adventist Health Central Valley Network is achieving stellar results by targeting its toughest challenges.

Advocating for Injured Workers: By helping employees navigate through the workers’ comp system, Cottage Health decreased lost work days by 80 percent.

A Matter of Trust: St. Luke’s workers’ comp program is built upon relationships and a commitment to care for those who care for patients.

Keeping the Results Flowing: R&I recognizes the Metropolitan Water Reclamation District of Greater Chicago for a commonsense approach that’s netting continuous improvement.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]

Risk Focus: Cyber

Expanding Cyber BI

Cyber business interruption insurance is a thriving market, but growth carries the threat of a mega-loss. 
By: | March 5, 2018 • 7 min read

Lingering hopes that large-scale cyber attack might be a once-in-a-lifetime event were dashed last year. The four-day WannaCry ransomware strike in May across 150 countries targeted more than 300,000 computers running Microsoft Windows. A month later, NotPetya hit multinationals ranging from Danish shipping firm Maersk to pharmaceutical giant Merck.


Maersk’s chairman, Jim Hagemann Snabe, revealed at this year’s Davos summit that NotPetya shut down most of the group’s network. While it was replacing 45,000 PCs and 4,000 servers, freight transactions had to be completed manually. The combined cost of business interruption and rebuilding the system was up to $300 million.

Merck’s CFO Robert Davis told investors that its NotPetya bill included $135 million in lost sales plus $175 million in additional costs. Fellow victims FedEx and French construction group Saint Gobain reported similar financial hits from lost business and clean-up costs.

The fast-expanding world of cryptocurrencies is also increasingly targeted. Echoes of the 2014 hack that triggered the collapse of Bitcoin exchange Mt. Gox emerged this January when Japanese cryptocurrency exchange Coincheck pledged to repay customers $500 million stolen by hackers in a cyber heist.

The size and scope of last summer’s attacks accelerated discussions on both sides of the Atlantic, between risk managers and brokers seeking more comprehensive cyber business interruption insurance products.

It also recently persuaded Pool Re, the UK’s terrorism reinsurance pool set up 25 years ago after bomb attacks in London’s financial quarter, to announce that from April its cover will extend to include material damage and direct BI resulting from acts of terrorism using a cyber trigger.

“The threat from a cyber attack is evident, and businesses have become increasingly concerned about the extensive repercussions these types of attacks could have on them,” said Pool Re’s chief, Julian Enoizi. “This was a clear gap in our coverage which left businesses potentially exposed.”

Shifting Focus

Development of cyber BI insurance to date reveals something of a transatlantic divide, said Hans Allnutt, head of cyber and data risk at international law firm DAC Beachcroft. The first U.S. mainstream cyber insurance products were a response to California’s data security and breach notification legislation in 2003.

Jimaan Sané, technology underwriter, Beazley

Of more recent vintage, Europe’s first cyber policies’ wordings initially reflected U.S. wordings, with the focus on data breaches. “So underwriters had to innovate and push hard on other areas of cyber cover, particularly BI and cyber crimes such as ransomware demands and distributed denial of service attacks,” said Allnut.

“Europe now has regulation coming up this May in the form of the General Data Protection Regulation across the EU, so the focus has essentially come full circle.”

Cyber insurance policies also provide a degree of cover for BI resulting from one of three main triggers, said Jimaan Sané, technology underwriter for specialist insurer Beazley. “First is the malicious-type trigger, where the system goes down or an outage results directly from a hack.

“Second is any incident involving negligence — the so-called ‘fat finger’ — where human or operational error causes a loss or there has been failure to upgrade or maintain the system. Third is any broader unplanned outage that hits either the company or anyone on which it relies, such as a service provider.”

The importance of cyber BI covering negligent acts in addition to phishing and social engineering attacks was underlined by last May’s IT meltdown suffered by airline BA.

This was triggered by a technician who switched off and then reconnected the power supply to BA’s data center, physically damaging servers and distribution panels.

Compensating delayed passengers cost the company around $80 million, although the bill fell short of the $461 million operational error loss suffered by Knight Capital in 2012, which pushed it close to bankruptcy and decimated its share price.

Mistaken Assumption

Awareness of potentially huge BI losses resulting from cyber attack was heightened by well-publicized hacks suffered by retailers such as Target and Home Depot in late 2013 and 2014, said Matt Kletzli, SVP and head of management liability at Victor O. Schinnerer & Company.


However, the incidents didn’t initially alarm smaller, less high-profile businesses, which assumed they wouldn’t be similarly targeted.

“But perpetrators employing bots and ransomware set out to expose any firms with weaknesses in their system,” he added.

“Suddenly, smaller firms found that even when they weren’t themselves targeted, many of those around them had fallen victim to attacks. Awareness started to lift, as the focus moved from large, headline-grabbing attacks to more everyday incidents.”

Publications such as the Director’s Handbook of Cyber-Risk Oversight, issued by the National Association of Corporate Directors and the Internet Security Alliance fixed the issue firmly on boardroom agendas.

“What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.” — Jimaan Sané, technology underwriter, Beazley

Reformed ex-hackers were recruited to offer board members their insights into the most vulnerable points across the company’s systems — in much the same way as forger-turned-security-expert Frank Abagnale Jr., subject of the Spielberg biopic “Catch Me If You Can.”

There also has been an increasing focus on systemic risk related to cyber attacks. Allnutt cites “Business Blackout,” a July 2015 study by Lloyd’s of London and the Cambridge University’s Centre for Risk Studies.

This detailed analysis of what could result from a major cyber attack on America’s power grid predicted a cost to the U.S. economy of hundreds of billions and claims to the insurance industry totalling upwards of $21.4 billion.

Lloyd’s described the scenario as both “technologically possible” and “improbable.” Three years on, however, it appears less fanciful.

In January, the head of the UK’s National Cyber Security Centre, Ciaran Martin, said the UK had been fortunate in so far averting a ‘category one’ attack. A C1 would shut down the financial services sector on which the country relies heavily and other vital infrastructure. It was a case of “when, not if” such an assault would be launched, he warned.

AI: Friend or Foe?

Despite daunting potential financial losses, pioneers of cyber BI insurance such as Beazley, Zurich, AIG and Chubb now see new competitors in the market. Capacity is growing steadily, said Allnutt.

“Not only is cyber insurance a new product, it also offers a new source of premium revenue so there is considerable appetite for taking it on,” he added. “However, whilst most insurers are comfortable with the liability aspects of cyber risk; not all insurers are covering loss of income.”

Matt Kletzli, SVP and head of management liability, Victor O. Schinnerer & Company

Kletzli added that available products include several well-written, broad cyber coverages that take into account all types of potential cyber attack and don’t attempt to limit cover by applying a narrow definition of BI loss.

“It’s a rapidly-evolving coverage — and needs to be — in order to keep up with changing circumstances,” he said.

The good news, according to a Fitch report, is that the cyber loss ratio has been reduced to 45 percent as more companies buy cover and the market continues to expand, bringing down the size of the average loss.

“The bad news is that at cyber events, talk is regularly turning to ‘what will be the Hurricane Katrina-type event’ for the cyber market?” said Kletzli.

“What’s worse is that with hurricane losses, underwriters know which regions are most at risk, whereas cyber is a global risk and insurers potentially face huge aggregation.”


Nor is the advent of robotics and artificial intelligence (AI) necessarily cause for optimism. As Allnutt noted, while AI can potentially be used to decode malware, by the same token sophisticated criminals can employ it to develop new malware and escalate the ‘computer versus computer’ battle.

“The trend towards greater automation of business means that we can expect more incidents involving loss of income,” said Sané. “What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.

“We’re likely to see a growing number of attacks where the aim is to cause disruption, rather than demand a ransom.

“The paradox of cyber BI is that the more sophisticated your organization and the more it embraces automation, the bigger the potential impact when an outage does occur. Those old-fashioned businesses still reliant on traditional processes generally aren’t affected as much and incur smaller losses.” &

Graham Buck is editor of gtnews.com. He can be reached at riskletters.com.