Workers' Comp Strategies

Cutting Down Agriculture Risk

Injury rates are coming down but workers’ comp premiums have yet to budge.
By: | December 1, 2013 • 7 min read

Fatalities and injuries among forestry and agricultural workers have dropped significantly in recent years, but those occupations still rank among the nation’s most lethal. Unfortunately, the safety improvements contributing to that decrease don’t necessarily translate to lower workers’ compensation rates or fewer claims, according to experts.

The Bureau of Labor Statistics rates logging as the country’s most dangerous job, with 128 fatalities per 100,000 full-time workers in 2012. Agriculture ranked ninth, with 21 fatalities, 9 percent lower than in 2011. The fatality rate for all U.S. workers was 3 per 100,000 full-time workers in 2012.

Insurance and academic experts attribute the improvements to safety technology and a vigilant focus on safety. However, “employee-oriented” workers’ compensation laws in some states, combined with rising medical costs, pressure carriers to raise rates, said Don Winn, managing director, Agriculture and Food Practice Group at Arthur J. Gallagher. “Carriers still tend to operate at underwriting losses,” he said. Medical costs account for around 70 percent of workers’ compensation expenses.

Well-run producers with favorable loss ratios can minimize those increases, Winn said. A determination of “well-run” includes safety protocols and implementation, buy-in from workers, and infrastructure to support a multi-lingual workforce. “Then they have positive results.”

R12-13p40-42_06_inDep.inddWorkers’ compensation claims and premiums cost the agriculture industry at least $4 billion per year in direct and indirect costs, said Stephen Reynolds, director of the High Plains Intermountain Center for Agricultural Health & Safety in Colorado, one of 10 regional centers funded by the National Institute for Occupational Science & Health (NIOSH) to research and recommend interventions to reduce agricultural and forestry injuries and illnesses.

Producers eat most of that cost in premiums, Reynolds said, but insurance carriers, taxpayers, and the food-buying public also pay. Injured workers and their families pay a huge cost in suffering and lost earnings.

Safety in the Woods

Agriculture and forestry environments include row crops to stockyards, and mountainous forests to sawmills. Each has its own risks. The most expensive claims for loggers, said John Lemire, director of loss control at Forestry Mutual, a North Carolina insurance company, are the million-dollar loss-of-limb cases both state and federal OSHA safety protocols seek urgently to avoid. Fully mechanized environments are the safest, where workers stay as much as possible inside the air-conditioned cabs of loaders, cutters, and skidders.

Thanks to member companies’ strict adherence to safety protocols and a financial self-interest in controlling exposure, Lemire said, Forestry Mutual’s claims dropped from 642 in 2004 for all their lines of business (trucking, logging, pallet mills and sawmills) to 210 in 2013.

Premiums for workers in a fully mechanized environment are fairly inexpensive, Lemire said, ranging from $8-$20 per person. That rate can soar to $50 per person, depending on the state, for workers using chainsaws on the ground.

Cutting trees from the safety of an enclosed, air-conditioned cab is more possible in the flat terrains of the Southeast, such as North Carolina and Georgia, than in the hardwood-rich mountains of the Northwest, where loggers are obliged to use chain saws and other dangerous equipment on steep and uneven terrain.


Even among those natural dangers, said John Hansen, senior safety management consultant at the Montana Logging Association, his organization has avoided fatalities for a number of years by adhering to state and federal regulations and using proper protective equipment for eyes, ears and legs. Loggers keep a close watch on overhead hazards — especially “widow makers,” branches caught on the top of trees that can crush workers below at any moment — and maintain a proper distance from falling trees.

According to Hansen, heat exposure, and slips, trips and falls account for many claims, as do bee stings. Highway accidents involving logging trucks account for many of the fatalities attributed to the industry.

The most frequent claims in agricultural settings result from slips, trips and falls; muscular and skeletal injuries from bending, lifting and stooping; skin diseases; and respiratory diseases caused by dust, bacteria and ammonia, such as those that afflict livestock and poultry farmers in enclosed facilities, Reynolds said.

Heavy equipment injuries, especially tractor rollovers, are a pervasive risk for agricultural workers, who are seven to eight times more likely to be killed on the job as the general working public. Those who work with livestock are at the greatest risk of injury and fatality, Reynolds said.

Controlling workers’ compensation costs for all of them starts with a demonstrated commitment by leadership to safety, said David Douphrate, assistant professor at the University of Texas School of Public Health. The second step is an accurate risk exposure assessment strategy and the third is safety training.

“Training makes a big difference,” Douphrate said. The perfunctory programs of the past — a 20-minute training video and a manual gathering dust on the shelf — aren’t nearly adequate for an increasingly immigrant workforce with low literacy and unpredictable language skills. “We need to stop training workers and start educating them, so they know why we’re telling them to do their jobs in a certain way.”

R12-13p40-42_06_inDep.indd“We need to stop training workers and start educating them, so they know why we’re telling them to do their jobs in a certain way.”
—David Douphrate, assistant professor, University of Texas School of Public Health


Successful training programs universally include incentives, rewards and reprimands, said Gallagher’s Winn, and should be included in performance assessments. “You call out the guy who jumps off the equipment to save time and reward the one who uses the ladder.”

Refining the Message

Changing the safety culture demands figuring out what is important to farmers, said Julie Sorensen, a Ph.D. in epidemiology and deputy director of the Northeast Center for Agricultural and Occupational Health.

“Risk management is easy and cost-effective for farmers,” she said. “They know what they should and should not be doing, but they are not a risk-averse population.”

While promoting Rollover Protective Structures (ROPS), a highly successful shared-cost NIOSH tractor safety intervention program to prevent tractor rollovers, her organization learned that farmers fear permanent disability more than death, and they’re concerned about keeping their workers, wives and grown children safe while operating tractors.

Armed with that information, the Northeast Center created a marketing strategy that shows a farmer in a wheelchair and emphasizes safety to dependents. “We couldn’t look at the issue from our perspective,” she said. “We had to look from theirs.”

While producers can control their safety practices, they can’t control the legislative environment where they operate. California Senate Bill 863, which took effect in January, makes broad changes to that state’s workers’ compensation system, including increased benefits to injured workers.

As in other industries, employers, insurers and most often workers themselves aim for a prompt return to work after an illness or injury, even if they can’t return to their original jobs.


“There’s always something a recovering worker can do around a farm,” Douphrate said, but logging operations could offer fewer alternate duties.

Agriculture and logging are targets for insurance fraud because they employ many low-wage seasonal earners with low literacy and few employment options — itself motivation to seek alternate income sources.

To smoke out malingerers and fraudulent claims as well as to provide appropriate medical care to legitimately injured workers, the Georgia-based third party administrator Broadspire uses a proprietary software system that guides adjusters through telephone interviews, conducted in the claimant’s own language.

The software poses a set of questions to capture the psychosocial aspects of a claim that could indicate fraud or exaggeration: Do you smoke? Are you diabetic? Do you hate your boss? How bad is your pain?

Responses, said Donnie Gray, senior vice president of Casualty Claim Operations, trigger related questions. The software flags inconsistencies between the answers and notes by medical professionals and case managers.

The best strategy for controlling workers’ compensation costs, said Bob Bollinger, a North Carolina attorney who represents injured workers, is to neutralize hazards on the front end. Once workers are hurt, he said, treat them well. Call them, take them to the doctor, don’t deny legitimate claims.

“My clients come to me because they’re angry and feel their employer is treating them unfairly. Keep lawyers out of it,” he said.

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Report: Marine

Crewless Ships Raise Questions

Is a remote operator legally a master? New technology confounds old terms.
By: | March 5, 2018 • 6 min read

For many developers, the accelerating development of remote-controlled and autonomous ships represents what could be the dawn of a new era. For underwriters and brokers, however, such vessels could represent the end of thousands of years of maritime law and risk management.

Rod Johnson, director of marine risk management, RSA Global Risk

While crewless vessels have yet to breach commercial service, there are active testing programs. Most brokers and underwriters expect small-scale commercial operations to be feasible in a few years, but that outlook only considers technical feasibility. How such operations will be insured remains unclear.

“I have been giving this a great deal of thought, this sits on my desk every day,” said Rod Johnson, director of marine risk management, RSA Global Risk, a major UK underwriter. Johnson sits on the loss-prevention committee of the International Union of Maritime Insurers.

“The agreed uncertainty that underpins marine insurance is falling away, but we are pretending that it isn’t. The contractual framework is being made less relevant all the time.”

Defining Autonomous Vessels

Two types of crewless vessels are being contemplated. First up is a drone with no one on board but actively controlled by a human at a remote command post on land or even on another vessel.

While some debate whether the controllers of drone aircrafts are pilots or operators, the very real question yet to be addressed is if a vessel controller is legally a “master” under maritime law.


The other type of crewless vessel would be completely autonomous, with the onboard systems making decisions about navigation, weather and operations.

Advocates tout the benefits of larger cargo capacity without crew spaces, including radically different hull designs without decks people can walk on. Doubters note a crew can fix things at sea while a ship cannot.

Rolls-Royce is one of the major proponents and designers. The company tested a remote-controlled tug in Copenhagen in June 2017.

“We think the initial early adopters will be vessels operating on fixed routes within coastal waters under the jurisdiction of flag states,” the company said.

“We expect to see the first autonomous vessel in commercial operation by the end of the decade. Further out, around 2025, we expect autonomous vessels to operate further from shore — perhaps coastal cargo ships. For ocean-going vessels to be autonomous, it will require a change in international regulations, so this will take longer.”

Once autonomous ships are a reality, “the entire current legal framework for maritime law and insurance is done,” said Johnson. “The master has not been replaced; he is just gone. Commodity ships (bulk carriers) would be most amenable to that technology. I’m not overly bothered by fully automated ships, but I am extremely bothered by heavily automated ones.”

He cited two risks specifically: hacking and fire.

“We expect to see the first autonomous vessel in commercial operation by the end of the decade. Further out, around 2025, we expect autonomous vessels to operate further from shore — perhaps coastal cargo ships. For ocean-going vessels to be autonomous, it will require a change in international regulations, so this will take longer.” — Rolls-Royce Holdings study

Andrew Kinsey, senior marine risk consultant, Allianz Global Corporate & Specialty, asked an even more existential question: “From an insurance standpoint, are we even still talking about a vessel as it is under law? Starting with the legal framework, the duty of a flag state is ‘manning of ships.’ What about the duty to render assistance? There cannot be insurance coverage of an illegal contract.”

Several sources noted that the technological development of crewless ships, while impressive, seems to be a solution in search of a problem. There is no known need in the market; no shippers, operators, owners or mariners advocate that crewless ships will solve their problems.

Kinsey takes umbrage at the suggestion that promotional material on crewless vessels cherry picks his company’s data, which found 75 percent to 90 percent of marine losses are caused by human error.


“Removing the humans from the vessels does not eliminate the human error. It just moves the human error from the helm to the coder. The reports on development by the companies with a vested interest [in crewless vessels] tend to read a lot like advertisements. The pressure for this is not coming from the end users.”

To be sure, Kinsey is a proponent of automation and technology when applied prudently, believing automation can make strides in areas of the supply chains. Much of the talk about automation is trying to bury the serious shortage of qualified crews. It also overshadows the very real potential for blockchain technology to overhaul the backend of marine insurance.

As a marine surveyor, Kinsey said he can go down to the wharf, inspect cranes, vessels and securements, and supervise loading and unloading — but he can’t inspect computer code or cyber security.

New Times, New Risks

In all fairness, insurance language has changed since the 17th century, especially as technology races ahead in the 21st.

“If you read any hull form, it’s practically Shakespearean,” said Stephen J. Harris, senior vice president of marine protection UK, Marsh. “The language is no longer fit for purpose. Our concern specifically to this topic is that the antiquated language talks about crew being on board. If they are not on board, do they still legally count as crew?”

Harris further questioned, “Under hull insurance, and provided that the ship owner has acted diligently, cover is extended to negligence of the master or crew. Does that still apply if the captain is not on board but sitting at a desk in an office?”

Andrew Kinsey, senior marine risk consultant, Allianz Global Corporate & Specialty

Several sources noted that a few international organizations, notably the Comite Maritime International and the International Maritime Organization, “have been very active in asking the legal profession around the world about their thoughts. The interpretations vary greatly. The legal complications of crewless vessels are actually more complicated than the technology.”

For example, if the operational, insurance and regulatory entities in two countries agree on the voyage of a crewless vessel across the ocean, a mishap or storm could drive the vessel into port or on shore of a third country that does not recognize those agreements.

“What worries insurers is legal uncertainty,” said Harris.

“If an operator did everything fine but a system went down, then most likely the designer would be responsible. But even if a designer explicitly accepted responsibility, what matters would be the flag state’s law in international waters and the local state’s law in territorial waters.


“We see the way ahead for this technology as local and short-sea operations. The law has to catch up with the technology, and it is showing no signs of doing so.”

Thomas M. Boudreau, head of specialty insurance, The Hartford, suggested that remote ferry operations could be the most appropriate use: “They travel fixed routes, all within one country’s waters.”

There could also be environmental and operational benefits from using battery power rather than conventional fuels.

“In terms of underwriting, the burden would shift to the manufacturer and designer of the operating systems,” Boudreau added.

It may just be, he suggested, that crewless ships are merely replacing old risks with new ones. Crews can deal with small repairs, fires or leaks at sea, but small conditions such as those can go unchecked and endanger the whole ship and cargo.

“The cyber risk is also concerning. The vessel may be safe from physical piracy, but what about hacking?” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]