2018 Power Broker

Education

No Problem Too Big

Charmaine Davis, CIC, CRM
Senior Vice President
Marsh, Washington, D.C.

Earthquakes on campus? No problem. Remote flights? No problem. High premiums? No problem. With Charmaine Davis, clients know the words “no problem” aren’t lip service.

Davis’ “no problem” solutions are the result of hard work, industry knowledge and connections; understanding client needs; and leveraging the marketplace to her clients’ advantage.

“When I was new to my job, Charmaine carried me — she educated me and helped me understand this field,” said one higher education client.

“More recently, when an earthquake damaged buildings on campus, caused a gas leak and left one building shuttered, Charmaine and her Marsh team walked us through this large, complex claim. She spent many, many extra hours on this, and there were never any fees or charges — just total support.”

“Her advice is perfect,” said another client. “I would recommend Charmaine to anyone.”

Advertisement

The client added that Davis was able to renegotiate their high-premium workers’ comp coverage into a unique risk solution — a program that provided them with chargeback money, ultimately saving them around $200,000. “That savings is because of Charmaine,” he added. “She used her ingenuity to make that happen.”

“Nothing fazes Charmaine,” said another client whose wildlife conservation program requires charter flights to remote locations. She said Davis introduced them to a risk management program that helps enterprise-wide, allowing them to focus on their mission.

He Can Teach You a Thing or Two

Tyler LaMantia, CLCS
Area Executive Vice President
Gallagher, Rolling Meadows, Ill.

Every school district wants to allocate funds to its core purpose: educating students. Tyler LaMantia helped school district members of the Prairie State Insurance Cooperative (PSIC) in Illinois do just that — and more. Working closely with PSIC and its executive board, LaMantia developed a multi-year plan to protect the pool’s finances by mitigating risk with proactive claim management and loss control, while keeping member deductibles low and retentions stable.

PSIC members also improved risk management using a three-pronged loss control program LaMantia helped implement, resulting in fewer claims. Members received on-site loss control strategies targeted specifically at their risk needs and online loss-control training for all school district employees. Additionally, he educated them about cyber risks, leading to the decision to make cyber-threat coverage part of their package rather than an add-on.

“Tyler and the team literally built a better mouse trap,” said Dave Cratty, finance manager, Special Education Association of Peoria County. “Tyler’s dedication to and knowledge of the education sector, particularly in K to 12, is so strong. There might be someone out there who knows as much as him, but it’s hard to imagine anyone who knows more.”

In 2017, PSIC declared an equity return of more than $700,000 to its member school districts while maintaining a low-deductible structure — with no increases to property, auto or general liability deductibles. They also closed out 2009/2010 and 2010/2011 policy year claims, which typically were taking 10 or more years to settle.

Changing the Conversation

Shelley Levine, CIC, CRM, CSRM
Area Executive Vice President
Gallagher, New York

One of Shelley Levine’s education clients had an important but unplanned call in just a few hours. So he emailed her for some advice. Could she spend some time going over their policy to prep him? Of course, she said. But she did one better. Within the hour Levine was on campus and ready to take the call with her client.

“That’s the kind of customer service we get from Shelley. She’s super-responsive in addition to being knowledgeable, analytical and a strong negotiator.”

One client said Levine’s knowledge and negotiating skill enhanced their coverage while decreasing their costs.

“Shelley conducted an analysis of our coverage, which resulted in us gaining millions of dollars in additional coverage, two or three new lines of coverage and a couple of enhancements — all for the same or less premium cost than we had been paying,” said the client.

Advertisement

When an education client challenged Levine to help them enhance their enterprise risk management (ERM) she took the time to get to know the school’s culture with an eye on every operational detail.

The school wanted faculty, staff and students to play a role in ERM but was struggling with how to include students who already had packed schedules.

“Shelley changed the conversation. Instead of a club or another meeting for the kids around ERM, she laid out a process that students use to make decisions. The new process integrated ERM into what they were already doing. Students make policy around real problems we face.”

Protecting the Study Abroad Experience

Chris Lueders, ARM
Area Senior Vice President
Gallagher, Rolling Meadows, Ill.

What’s that line about “the best laid plans?” Many of us have had something important — and costly — go wrong. For students studying abroad, such a disruption can affect academic progress and derail chances for a meaningful learning experience.

Chris Lueders of Gallagher came up with a risk solution for this problem at a major university. Their director of risk management explained: “We had no mechanism in place to provide student refunds if study abroad trips needed to be cancelled. There are sometimes concerns around international travel or specific travel advisories or bans that we follow for student safety.

“Chris worked very hard and was instrumental in putting together a trip cancellation policy and insurance product — the first one we had and the first one I am aware of in the market. Now this product is mandatory for our students embarking on study abroad trips.”

The director of compliance and risk management at another of Lueder’s higher education clients lauded her for great customer service — turnaround within two          hours — and for being a creative thinker who devises creative solutions.

This client had a complicated placement with moving and storing library books. The property carrier wasn’t competitive, so Lueder explored options and got coverage for the books under a cargo policy for a great price. The client added, “We’ve had some other sticky or 11th hour placements, but I’ve never felt placed on the back burner by Chris — she always makes us feel like we’re her most important client.”

Securing Hard-to-Get Coverage

Roberto Santiago
Vice President
Marsh, New York

Football and its relationship with traumatic brain injury (TBI) have been in the news of late, but the reality is that this risk exists in other areas, too. Sports such as ice hockey, rugby, soccer and even cheerleading carry TBI risks, explained Evelyn Wilson, director of purchasing and vendor relations, Salem State University.

The number of carriers willing to write coverage is limited.  Salem State University and fellow members of a Massachusetts-based college consortium bought coverage together — until their carrier drastically altered coverage by attaching a participant injury waiver and a neurodegenerative injury exclusion to all their accounts.

They faced an uphill battle; but they didn’t face it alone. They turned to Roberto Santiago of Marsh to give them the home-team advantage.

Advertisement

Santiago faced a triple challenge: Find a replacement insurer, find it in a limited marketplace and convince the insurer to write the unique program structure the consortium members needed to operate athletics programs and protect students. Santiago conducted an extensive search without breaking a sweat. The result was a program that covered TBI at a very competitive price.

“Roberto has a very deep knowledge about higher education,” said Wilson. “His analysis is always in-depth, and he works very closely with us and other members of the consortium. He’s responsive, his customer service is excellent and we could not be happier with him.”

One Size Does Not Fit All

James Shewey
Client and Sales Executive
RCM&D, Glen Allen, Va.

Life on a college campus is rarely dull. Consequently, neither is life as a campus risk manager. But RCM&D’s James Shewey is helping to create risk solutions that leave everyone involved breathing a little easier.

Steve McAllister, vice president for finance and administration, Washington and Lee University, had handled a lot in his tenure.

Then the dance program told him that they wanted to do a spring semester performance off the side of a campus building. Not to worry. Just call James.

“We called James, and he worked closely with the carrier, the dance program, the rig company and everyone else to coordinate all the needs and make sure we were covered. James knows that insurance is not a one-size-fits-all box for us, and he is flexible in his approach and in managing both liability and perception of liability,” said McAllister.

Shewey also helped the Washington and Lee team with emergency management planning and drills. “James helped our internal team plan and hold these emergency drills in real time. Afterward he evaluated the drills and made recommendations to us,” said McAllister.

Pat McCann, CFO, the University of Virginia Foundation, said James is a 10 out of 10 in customer service, industry knowledge and risk solutions.

“We have a lot of real estate,” McCann noted. “And James has been very strategic in how he structures that coverage, so we get the right coverage at a fair price. He’s also brought in experts at no cost to us to advise us on risk management issues. He is exceptional.”

The complete list of 2018 Power Broker® winners can be found here.

Finalists:

Nick Baumgartner
Account Executive
Aon, Chicago

Alex Burton
Area President
Gallagher, Birmingham, Al.

James Gershon
Executive Vice President
Bolton & Company, Santa Clara, Calif.

Greg Hunter
Area Managing Director
Gallagher, Boston

Wendy Rosler
Senior Vice President
Marsh, New York

 

 

 

 

 

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

A Recall Nightmare: Food Product Contamination Kills Three Unborn Children

A failure to purchase product contamination insurance results in a crushing blow, not just in dollars but in lives.
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]