2016 Teddy Award Winner

Bringing 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.
By: | November 2, 2016 • 6 min read

Target’s roughly 341,000 employees perform a wide array of tasks. In its nearly 1,800 retail locations, they stock shelves, walk the aisles assisting customers and man the cash registers, sometimes staying on their feet for hours on end. In the company’s 38 distribution centers, they move large pallets and work side by side with heavy machinery.

Advertisement




Target also operates in 49 of the 50 United States. As any national company can attest to, this presents regulatory complexity, as no two states are the same when it comes to safety regulation, health care resources and workers’ compensation law.

The safety and workers’ comp challenges, to say the least, are broad.

Then, the retail giant underwent a companywide reorganization in March 2015, which left the risk management department with fewer team members, and just as much work to accomplish. The team is responsible for safety, claims, finance and insurance across the corporation.

“We had an opportunity to help team members learn new skills and expand their knowledge base,” said Jodi Neuses, safety director, Target. “From the safety team’s perspective, we had to do some cross-training so that everyone had a well-rounded understanding of our risks on both the retail and the distribution side. We no longer had specialized experts in just one part of the business.”

The same was true on the workers’ comp side of the equation.

The Target Risk Management Team (L to R): First Row - Shannon Simonette, MaryJo Pollock, Dan Hawkins, Rachel Gillman, Debbie Marshall, Alicia Kronstedt; Second/Third Row - Carla LaVere, Megan Rooney, Melissa Cudzilo, Eric Oldroyd, Dean Sherman, Elaine Boevers, Gina LoPesio, Ben Holmes, Jodi Neuses, Amanda Lagatta; Not pictured: Diane Howden, Rob Wilkey and Debra Shoemaker.

The Target Risk Management Team (L to R):
First Row – Shannon Simonette, MaryJo Pollock, Dan Hawkins, Rachel Gillman, Debbie Marshall, Alicia Kronstedt; Second/Third Row – Carla LaVere, Megan Rooney, Melissa Cudzilo, Eric Oldroyd, Dean Sherman, Elaine Boevers, Gina LoPesio, Ben Holmes, Jodi Neuses, Amanda Lagatta; Not pictured: Diane Howden, Rob Wilkey and Debra Shoemaker.

“We were fortunate to have team members who were specialists in workers’ comp claims and have previously been adjusters,” said Amanda Lagatta, Target’s director of insurance and claims. “We had people with similar skill-sets work together to apply those skills in new ways.”

The team also began re-evaluating whether it was utilizing its third-party vendors in the most efficient way.

“We made several changes with our claims vendors and managed-care vendors, so that we were fully leveraging all the services they provide,” Lagatta said.

Neuses and her team turned to professional associations like the American Society of Safety Engineers and the Minnesota Safety Council to stay updated on the latest guidelines and training. Vendors and professional groups have become a regular source of expert advice for the safety team.

Rebuilding the expertise of the safety and workers’ comp team offered an opportunity to view the company’s challenges with a fresh perspective. It opened their eyes to new ways to improve their programs.

The workers’ comp claims team, for example, made greater use of predictive analytics to streamline and expedite its processes.

“This is a service that we think is unique to us, and has really evolved to become a central part of our advocacy program.” — Amanda Lagatta, director of insurance and claims, Target

Originally, the analytical tool was used to determine at the outset the level of adjuster that should be assigned to a case. It was meant to direct the right level of expertise to a claim. The problem with that model, however, is that it touches a claim only once and does not account for how the claimant’s experience changes over time.

“We subsequently updated the model so that it looks at a claim at different points throughout its lifecycle, not just at the start,” Lagatta said. “As things change, we’ll evaluate the use of a return-to-work coordinator, and when we should call a roundtable to discuss a claim’s progress to develop a new strategy or get different people involved.”

Diving deeper into claims data also helps the safety team pinpoint where injuries are happening, so they can focus prevention efforts where they’re needed most.

Stronger Safety Culture

A culture of safety devoted to keeping team members and guests safe is a critical goal for Target. Efforts are focused on creating a top-down culture of safety throughout the company, including leading off meetings at distribution centers with safety messages, and leveraging an ergonomic specialist to consult on workstation design and merchandise presentation to minimize injury risk. The team also engages the “assets protection” leader at every retail location to take on the role of “safety captain” to reinforce a culture of safety in their stores.

Amanda Lagatta, director of insurance and claims, Target

Amanda Lagatta, director of insurance and claims, Target

Huddles — how the Target store teams refer to their twice-daily gatherings — and Start Up Messages, in which managers communicate the company’s safety message before the day begins and lead their teams in stretching and other warm-up exercises, are another key feature of the safety program.

Signage in stores and distribution centers remind employees of hazards and safety practices they should follow to mitigate them. Training programs for powered equipment were simplified and adjusted to allow trainers and supervisors to control when an employee is ready to be certified and move on to independent work.

“Safety is mission-critical,” Neuses said. “We try to be proactive and continually reinforce that message.”

Advocacy-Based Model

Unfortunately, even the most thorough safety program can’t prevent all accidents. When an injury does occur, Lagatta and her team ensure that the worker is treated with respect and care — and treated quickly.

When a team member is injured on the job, they often don’t know how to navigate the workers’ comp system or how exactly the claims process works. Confusion and frustration can add to the employee’s stress and lead them to delay seeking care.

As part of an initiative to build a more formal, advocacy-based claims model, Target instituted a Workers’ Comp Assistance Center with the help of its TPA, Sedgwick Claims Management Services.

“This is a service that we think is unique to us, and has really evolved to become a central part of our advocacy program,” Lagatta said. “Someone from the assistance center — not the claims adjuster — will reach out to the team member and make the first contact with them. Their job is to reassure the team member that we care and we’re there for them, to familiarize them with the workers’ comp process and answer any questions.”

Advertisement




Those initial calls are also an opportunity to collect additional information about the claimant and the injury. That data is entered into the predictive modeling system and used to direct the right resources to the case.

Return-to-work coordinators are another critical component of the advocacy approach, and the retailer’s return-to-work program is a differentiator in the industry.

The risk management team has identified suitable light-duty positions for injured workers, and provides 12 weeks of modified duty payroll to support the stores using this program. But sometimes follow-up surgeries are necessary, and recovery can be a difficult road. Post-surgery, injured employees may receive another 12 weeks to accommodate the additional treatment.

Third-party service providers again play an important role in this process. Nurse case managers liaise with physicians and human resource departments to gather the information they need, and keep all parties on the same page. For example, they can analyze an injured team member’s abilities and investigate worksites to determine what is safe and suitable.

“We really rely on our vendors to help navigate that process and make informed decisions,” Lagatta said. “We’re fortunate to have partners we can trust, so we can maximize the impact of our department.”

Since implementing these changes in safety, claims management and return-to-work, Target has seen reductions in claim frequency, length and cost, and has improved the experience for its injured workers. &

_______________________________________________________

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.

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The End of Summer

A failure to purchase product contamination insurance results in a crushing blow.
By: | October 15, 2018 • 9 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: THE HEAT IS ON

Reilly Sheehan, the Bethlehem, Pa., plant manager for Shamrock Foods, looks up in annoyance when he hears a tap on his office window.

Reilly has nothing against him, but seeing the face of his assistant plant operator Peter Soto right then is just a case of bad timing.

Sheehan, whose company manufactures ice cream treats for convenience stores and ice cream trucks, just got through digesting an email from his CFO, pushing for more cost cutting, when Soto knocked.

Sheehan gestures impatiently, and Soto steps in with a degree of caution.

“What?” Sheehan says.

“I’m not sure how much of an issue this will be, but I just got some safety reports back and we got a positive swipe for Listeria in one of the Market Streetside refrigeration units.”

Partner

Partner

Sheehan gestures again, and Soto shuts the office door.

“How much of a positive?” Sheehan says more quietly.

Soto shrugs.

“I mean it’s not a big hit and that’s the only place we saw it, so, hard to know what to make of it.”

Sheehan looks out to the production floor, more as a way to focus his thoughts than for any other reason.

Sheehan is jammed. It’s April, the time of year when Shamrock begins to ramp up production for the summer season. Shamrock, which operates three plants in the Middle Atlantic, is holding its own at around $240 million in annual sales.

But the pressure is building on Sheehan. In previous cost-cutting measures, Shamrock cut risk management and safety staff.

Now there is this email from the CFO and a possible safety issue. Not much time to think; too much going on.

Sheehan takes just another moment to deliberate: It’s not a heavy hit, and Shamrock hasn’t had a product recall in more than 15 years.

“Okay, thanks for letting me know,” Sheehan says to Soto.

“Do another swipe next week and tell me what you pick up. I bet you twenty bucks there’s nothing in the product. That swipe was nowhere near the production line.”

Soto departs, closing the office door gingerly.

Then Sheehan lingers over his keyboard. He waits. So much pressure; what to do?

“Very well then,” he says to himself, and gets to work crafting an email.

His subject line to the chief risk officer and the company vice president: “Possible safety issue: Positive test for Listeria in one of the refrigeration units.”

That night, Sheehan can’t sleep. Part of Shamrock’s cost-cutting meant that Sheehan has responsibility for environmental, health and safety in addition to his operations responsibilities.

Every possible thing that could bring harmful bacteria into the plant runs through his mind.

Trucks carrying raw eggs, milk and sugar into the plant. The hoses used to shoot the main ingredients into Shamrock’s metal storage vats. On and on it goes…

In his mind’s eye, Sheehan can picture the inside of a refrigeration unit. Ice cream is chilled, never really frozen. He can almost feel the dank chill. Salmonella and Listeria love that kind of environment.

Sheehan tosses and turns. Then another thought occurs to him. He recalls a conversation, just one question at a meeting really, when one of the departed risk management staff brought up the issue of contaminated product insurance.

Sheehan’s memory is hazy, stress shortened, but he can’t remember it being mentioned again. He pushes his memory again, but nothing.

“I don’t need this,” he says to himself through clenched teeth. He punches up his pillow in an effort to find a path to sleep.

PART TWO: STRICKEN FAMILIES

“Toot toot, tuuuuurrrrreeeeeeeeettt!”

The whistles of the three lifeguards at the Bradford Community Pool in Allentown, Pa., go off in unison, two staccato notes, then a dip in pitch, then ratcheting back up together.

For Cheryl Brick, 34, the mother of two and six-months pregnant with a third, that signal for the kids to clear the pool for the adult swim is just part of a typical summer day. Right on cue, her son Henry, 8, and his sister Siobhan, 5, come running back to where she’s set up the family pool camp.

Henry, wet and shivering and reaching for a towel, eyes that big bag.

“Mom, can I?”

And Cheryl knows exactly where he’s going.

“Yes. But this time, can you please bring your mother a mint-chip ice cream bar along with whatever you get for you and Siobhan?”

Henry grabs the money, drops his towel and tears off; Siobhan drops hers just as quickly, not wanting to be left behind.

Advertisement




“Wait for me!” Siobhan yells as Henry sprints for the ice cream truck parked just outside of the pool entrance.

It’s the dead of night, 3 am, two weeks later when Cheryl, slumbering deeply beside her husband Danny, is pulled from her rest by the sound of Siobhan crying in their bedroom doorway.

“Mom, dad!” says Henry, who is standing, pale and stricken, in the hallway behind Siobhan.

“What?” says Danny, sitting up in bed, but Cheryl’s pregnancy sharpened sense of smell knows the answer.

Siobhan, wailing and shivering, has soiled her pajamas, the victim of a severe case of diarrhea.

“I just barfed is what,” says Henry, who has to turn and run right back to the bathroom.

Cheryl steps out of bed to help Siobhan, but the room spins as she does so.

“Oh God,” she says, feeling the impact of her own attack of nausea.

A quick, grim cleanup and the entire family is off to a walk-up urgent care center.

A bolt of fear runs through Cheryl as the nurse gives her the horrible news.

“Listeriosis,” says the nurse. Sickening for children and adults but potentially fatal for the weak, especially the unborn.

And very sadly, Cheryl loses her third child. Two other mothers in the Middle Atlantic suffer the same fate and dozens more are sickened.

Product recall notices from state regulators and the FDA go out immediately.

Ice cream bars and sandwiches disappear from store coolers and vending machines on corporate campuses. The tinkly sound of “Pop Goes the Weasel” emanating from mobile ice cream vendor trucks falls silent.

Notices of intent to sue hit every link in the supply chain, from dairy cooperatives in New York State to the corporate offices of grocery store chains in Atlanta, Philadelphia and Baltimore.

The three major contract manufacturers that make ice cream bars distributed in the eight states where residents were sickened are shut down, pending a further investigation.

FDA inspectors eventually tie the outbreak to Shamrock.

Evidence exists that a good faith effort was underway internally to determine if any of Shamrock’s products were contaminated. Shamrock had still not produced a positive hit on any of its products when the summer tragedy struck. They just weren’t looking in the right place.

PART THREE: AN INSURANCE TANGLE

Banking on rock-solid relationships with its carrier and brokers, Shamrock, through its attorneys, is able to salvage indemnification on its general liability policy that affords it $20 million to defray the business losses of its retail customers.

Advertisement




But that one comment from a risk manager that went unheeded many months ago comes back to haunt the company.

All three of Shamrock’s plants were shuttered from August 2017 until March 2018, until the source of the contamination could be run down and the federal and state inspectors were assured the company put into place the necessary protocols to avoid a repeat of the disaster that killed 3 unborn children and sickened dozens more.

Shamrock carried no contaminated product coverage, which is known as product recall coverage outside of the food business. The production shutdown of all three of its plants cost Shamrock $120 million. As a result of the shutdown, Shamrock also lost customers.

The $20 million payout from Shamrock’s general liability policy is welcome and was well-earned by a good history with its carrier and brokers. Without the backstop of contaminated products insurance, though, Shamrock blew a hole in its bottom line that forces the company to change, perhaps forever, the way it does business.

Management has a gun to its head. Two of Shamrock’s plants, including Bethlehem, are permanently shuttered, as the company shrinks in an effort to stave off bankruptcy.

Reilly Sheehan is among those terminated. In the end, he was the wrong person in the wrong place at the wrong time.

Burdened by the guilt, rational or not, over the fatalities and the horrendous damage to Shamrock’s business. Reilly Sheehan is a broken man. Leaning on the compassion of a cousin, he takes a job as a maintenance worker at the Bethlehem sewage treatment plant.

“Maybe I can keep this place clean,” he mutters to himself one night, as he swabs a sewage overflow with a mop in the early morning hours of a dark, cold February.

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Swiss Re Corporate Solutions to produce this scenario. Below are their recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

Shamrock Food’s story is not an isolated incident. Contaminations happen, and when they do they can cause a domino effect of loss and disruption for vendors and suppliers. Without Product Recall Insurance, Shamrock sustained large monetary losses, lost customers and ultimately two of their facilities. While the company’s liability coverage helped with the business losses of their retail customers, the lack of Product Recall and Contamination Insurance left them exposed to a litany of risks.

Risk Managers in the Food & Beverage industry should consider Product Recall Insurance because it can protect your company from:

  • Accidental contamination
  • Malicious product tampering
  • Government recall
  • Product extortion
  • Adverse publicity
  • Intentionally impaired ingredients
  • Product refusal
  • First and third party recall costs

Ultimately, choosing the right partner is key. Finding an insurer who offers comprehensive coverage and claims support will be of the utmost importance should disaster strike. Not only is cover needed to provide balance sheet protection for lost revenues, extra expense, cleaning, disposal, storage and replacing the contaminated products, but coverage should go even further in providing the following additional services:

  • Pre-incident risk mitigation advocacy
  • Incident investigation
  • Brand rehabilitation
  • Third party advisory services

A strong contamination insurance program can fill gaps between other P&C lines, but more importantly it can provide needed risk management resources when companies need them most: during a crisis.



Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]