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Food Safety Modernization Act: Navigate New Exposures with Best Practices

For motor carriers, a key to protecting themselves against all types of claims is having broad insurance coverage.
By: | September 12, 2017 • 6 min read

Many things can go wrong during the transportation of food.

Lax sanitation and temperature control can lead to outbreaks of foodborne illness with harmful effects on consumers. Poor security can result in contamination or thefts of entire shipments. Ambiguous contract language could result in finger pointing among food suppliers, shippers, carriers, distributors and their insurers.

The transportation of human and animal food is subject to strict federal regulation.  The FDA Food Safety Modernization Act (FSMA) rule on Sanitary Transportation of Human and Animal Food seeks to strengthen safety standards even further by mandating record-keeping requirements for each party in the food transportation chain.

It does not, however, introduce unfamiliar protocols or change how damage or adulteration is determined.

Defining what qualifies as damage/adulteration remains defined by the Food, Drug and Cosmetics Act of 2005. Also, the Carmack Amendment remains the legislative authority on motor carriers’ legal liability. While the FSMA rule reinforces existing best practices, it doesn’t increase exposure or impact the liability landscape within the food supply chain.

“It was not the FDA’s intent to change how the cargo insurance claims process is handled,” said Ray Lampley, Associate Manager, Inland Marine Claims, Travelers. “It continues to show itself to be more of a perceived risk than a real risk from an insurance and claims perspective.”

“Many motor carriers are already meeting the performance-based standards put forth by the FSMA,” said Adam Sellars, Inland Marine Risk Control Specialist, Travelers. “The challenge will lie in formalizing their documentation procedures.”

To fulfill their record-keeping requirements in the areas of training, sanitation, and temperature control — and help protect themselves from any new exposure or potential claim situation — motor carriers should consider these best practices:

1. Training

Driver training is required at time of hire, but it needs to expand beyond the basics of operating a tractor trailer. Drivers must be made aware of their responsibilities in ensuring the safety of their shipment from start to finish. And per the FSMA, there must be documentation of that training.

“Drivers will have their traditional orientation that relates to collision avoidance and defensive driving. But they also need training that is specific to safe food handling and sanitary transportation,” Sellars said.

That begins before the cargo is even loaded. Drivers should first ensure their trailer is clean and maintained at the proper temperature when hauling refrigerated/frozen foods. A carrier should develop and implement written procedures that specify practices for cleaning, sanitizing if necessary, inspecting vehicles and transportation equipment, and specifying how they will monitor and record in-transit temperatures.

2. Sanitation

Maintaining clean trailers is paramount to the prevention of cross-contamination. Records should specify practices for cleaning, sanitizing if necessary, and inspecting vehicles and transportation equipment. That may be the responsibility of the shipper or the carrier, depending on what their contract stipulates.

“The FSMA doesn’t provide any specific recommendation around how or when the trailer should be cleaned. They leave that up to the transportation parties and shippers to decide. The key element is ensuring that records are maintained that demonstrate appropriate cleaning and sanitation practices were implemented,” Sellars said.

“If the shipper cleaned the trailer before loading, the shipper should document that. The carrier should obtain copies of that record or validate it themselves.”

3. Temperature Monitoring

Temperature control is one of the most important aspect of preventing the growth of bacteria that can lead to illness. The old-fashioned way to monitor temperature is for the driver to pull over periodically and check the trailer temperature manually, recording the numbers on a paper log. But that method can be far from perfect.

When using this method, it may be too late to save the cargo from spoilage by the time the driver discovers an inadequate reading and arranges for a maintenance provider or backup truck to get to the location.

“The rule doesn’t require carriers to have a system in place for real-time monitoring, but many leading carriers are using that technology. Some of the more sophisticated shippers will use telemetry to monitor temperatures in transit,” Sellars said. “That way a sensor can send an alert to the driver or a main office as soon as the temperature approaches an unsafe level, and action can be taken immediately to reroute that truck or otherwise fix the issue.”

Pre-cooling a trailer before cold foods are loaded is also an important step.

“You want to make sure that the trailer itself along with the air within it is at certain temperature before loading.  If you’re loading cold products into a warm trailer, you can change the dynamics very quickly as the refrigeration system may not be able to maintain appropriate temperatures,” Sellars said. “That can vary depending on the type of trailer, the insulation characteristics of that trailer, and the temperatures that are needed during transit.”

An acceptable temperature range for loading should be specified in writing, and verified by the driver before setting off.

4. Security

“While the FSMA rule does not identify cargo security requirements, the controls that a carrier has in place around this will factor into their overall risk mitigation strategy. Theft of cargo and damage from pilferage is one of the more frequent and severe types of claims that we see,” Sellars said. Cargo theft is bad enough, but carriers can incur huge losses even if nothing is stolen.

“If the seal on the trailer door is broken or cargo is otherwise accessed by those seeking to steal, there may be concerns of contamination.  You can’t be sure in some cases who or what got inside and whether the food has been damaged/adulterated in any way,” Sellars said.

To prevent that scenario, Travelers promotes the use of specialized housings and locks around seals and doors which can prevent unauthorized access.

The Importance of Broad Coverage and Expertise

For motor carriers, a key to protecting themselves against all types of claims is having broad insurance coverage.

“Some insurers may stick to a very black and white interpretation of adulteration. They may require additional testing to find the exact contaminant. Without that testing, they can deny coverage due to lack of proof,” Lampley said. Those insurers may now be scrambling to update their policy forms or draft new products to account for gaps in existing coverage forms.

“At Travelers, our legal liability coverage form is already broad enough to provide coverage for the exposures carriers face. Anything that could be deemed unsanitary under the definitions of the FSMA or the Food, Drug and Cosmetics Act could be covered by us,” he said. That could, for example, include a situation where a receiver rejects a shipment because of evidence that the goods were either held or transported under unsanitary conditions.

“Even if there is no visible proof that the food is contaminated, it still could meet the FDA’s definition of damage/adulteration, so we may consider that damaged goods and cover that loss,” Lampley said.

“We have studied this new regulation for the past three years, and our expertise around the law means we can sort through its implications very quickly, and we’ve determined we don’t have to update our coverage. Our expertise means that no matter what new regulations come along, Travelers is ahead of the game.”

To learn more, visit https://www.travelers.com/business-insurance.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Travelers. The editorial staff of Risk & Insurance had no role in its preparation.




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The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and generated revenues of approximately $28 billion in 2016. For more information, visit www.travelers.com.

Emerging Risks

Stadium Safety

Soft targets, such as sports stadiums, must increase measures to protect lives and their business.
By: | January 10, 2018 • 8 min read

Acts of violence and terror can break out in even the unlikeliest of places.

Look at the 2013 Boston Marathon, where two bombs went off, killing three and injuring dozens of others in a terrorist attack. Or consider the Orlando Pulse nightclub, where 49 people were killed and 58 wounded. Most recently in Las Vegas, a gunman killed 58 and injured hundreds of others.

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The world is not inherently evil, but these evil acts still find a way into places like churches, schools, concerts and stadiums.

“We didn’t see these kinds of attacks 20 years ago,” said Glenn Chavious, managing director, global sports & recreation practice leader, Industria Risk & Insurance Services.

As a society, we have advanced through technology, he said. Technology’s platform has enabled the message of terror to spread further faster.

“But it’s not just with technology. Our cultures, our personal grievances, have brought people out of their comfort zones.”

Chavious said that people still had these grievances 20 years ago but were less likely to act out. Tech has linked people around the globe to other like-minded individuals, allowing for others to join in on messages of terror.

“The progression of terrorist acts over the last 10 years has very much been central to the emergence of ‘lone wolf’ actors. As was the case in both Manchester and Las Vegas, the ‘lone wolf’ dynamic presents an altogether unique set of challenges for law enforcement and event service professionals,” said John

Glenn Chavious, managing director, global sports & recreation practice leader, Industria Risk & Insurance Services

Tomlinson, senior vice president, head of entertainment, Lockton.

As more violent outbreaks take place in public spaces, risk managers learn from and better understand what attackers want. Each new event enables risk managers to see what works and what can be improved upon to better protect people and places.

But the fact remains that the nature and pattern of attacks are changing.

“Many of these actions are devised in complete obscurity and on impulse, and are carried out by individuals with little to no prior visibility, in terms of behavioral patterns or threat recognition, thus making it virtually impossible to maintain any elements of anticipation by security officials,” said Tomlinson.

With vehicles driving into crowds, active shooters and the random nature of attacks, it’s hard to gauge what might come next, said Warren Harper, global sports & events practice leader, Marsh.

Public spaces like sporting arenas are particularly vulnerable because they are considered ‘soft targets.’ They are areas where people gather in large numbers for recreation. They are welcoming to their patrons and visitors, much like a hospital, and the crowds that attend come in droves.

NFL football stadiums, for example, can hold anywhere from 25,000 to 93,000 people at maximum capacity — and that number doesn’t include workers, players or other behind-the-scenes personnel.

“Attacks are a big risk management issue,” said Chavious. “Insurance is the last resort we want to rely upon. We’d rather be preventing it to avoid such events.”

Preparing for Danger

The second half of 2017 proved a trying few months for the insurance industry, facing hurricanes, earthquakes, wildfires and — unfortunately — multiple mass shootings.

The industry was estimated to take a more than $1 billion hit from the Las Vegas massacre in October 2017. A few years back, the Boston Marathon bombings cost businesses around $333 million each day the city was shut down following the attack. Officials were on a manhunt for the suspects in question, and Boston was on lockdown.

“Many of these actions are devised in complete obscurity and on impulse, and are carried out by individuals with little to no prior visibility.” — John Tomlinson, senior vice president, head of entertainment, Lockton

“Fortunately, we have not had a complete stadium go down,” said Harper. But a mass casualty event at a stadium can lead to the death or injury of athletes, spectators and guests; psychological trauma; potential workers’ comp claims from injured employees; lawsuits; significant reputational damage; property damage and prolonged business interruption losses.

The physical damage, said Harper, might be something risk managers can gauge beforehand, but loss of life is immeasurable.

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The best practice then, said Chavious, is awareness and education.

“A lot of preparedness comes from education. [Stadiums] need a risk management plan.”

First and foremost, Chavious said, stadiums need to perform a security risk assessment. Find out where vulnerable spots are, decide where education can be improved upon and develop other safety measures over time.

Areas outside the stadium are soft targets, said Harper. The parking lot, the ticketing and access areas and even the metro transit areas where guests mingle before and after a game are targeted more often than inside.

Last year, for example, a stadium in Manchester was the target of a bomb, which detonated outside the venue as concert-goers left. In 2015, the Stade de France in Paris was the target of suicide bombers and active shooters, who struck the outside of the stadium while a soccer match was held inside.

Security, therefore, needs to be ready to react both inside and outside the vicinity. Reviewing past events and seeing what works has helped risk mangers improve safety strategies.

“A lot of places are getting into table-top exercises” to make sure their people are really trained, added Harper.

In these exercises, employees from various departments come together to brainstorm and work through a hypothetical terrorist situation.

A facilitator will propose the scenario — an active shooter has been spotted right before the game begins, someone has called in a bomb threat, a driver has fled on foot after driving into a crowd — and the stadium’s staff is asked how they should respond.

“People tend to act on assumptions, which may be wrong, but this is a great setting for them to brainstorm and learn,” said Harper.

Technology and Safety

In addition to education, stadiums are ahead of the game, implementing high-tech security cameras and closed-circuit TV monitoring, requiring game-day audiences to use clear/see-through bags when entering the arena, upping employee training on safety protocols and utilizing vapor wake dogs.

Drones are also adding a protective layer.

John Tomlinson, senior vice president, head of entertainment, Lockton

“Drones are helpful in surveying an area and can alert security to any potential threat,” said Chavious.

“Many stadiums have an area between a city’s metro and the stadium itself. If there’s a disturbance there, and you don’t have a camera in that area, you could use the drone instead of moving physical assets.”

Chavious added that “the overhead view will pick up potential crowd concentration, see if there are too many people in one crowd, or drones can fly overhead and be used to assess situations like a vehicle that’s in a place it shouldn’t be.”

But like with all new technology, drones too have their downsides. There’s the expense of owning, maintaining and operating the drone. Weather conditions can affect how and when a drone is used, so it isn’t a reliable source. And what if that drone gets hacked?

“The evolution of venue security protocols most certainly includes the increased usage of unmanned aerial systems (UAS), including drones, as the scope and territorial vastness provided by UAS, from a monitoring perspective, is much more expansive than ground-based apparatus,” said Tomlinson.

“That said,” he continued, “there have been many documented instances in which the intrusion of unauthorized drones at live events have posed major security concerns and have actually heightened the risk of injury to participants and attendees.”

Still, many experts, including Tomlinson, see drones playing a significant role in safety at stadiums moving forward.

“I believe the utilization of drones will continue to be on the forefront of risk mitigation innovation in the live event space, albeit with some very tight operating controls,” he said.

The SAFETY Act

In response to the terrorist attacks on Sept. 11, 2001, U.S. Homeland Security enacted the Support Anti-Terrorism by Fostering Effective

Warren Harper, global sports & events practice leader, Marsh

Technologies Act (SAFETY Act).

The primary purpose of the SAFETY Act was to encourage potential manufacturers or sellers of anti-terrorism technologies to continue to develop and commercialize these technologies (like video monitoring or drones).

There was a worry that the threat of liability in such an event would deter and prevent sellers from pursing these technologies, which are aimed at saving lives. Instead, the SAFETY Act provides incentive by adding a system of risk and litigation management.

“[The SAFETY Act] is geared toward claims arising out of acts of terrorism,” said Harper.

Bottom line: It’s added financial protection. Businesses both large and small can apply for the SAFETY designation — in fact, many NFL teams push for the designation. So far, four have reached SAFETY certification: Lambeau Field, MetLife Stadium, University of Phoenix Stadium and Gillette Stadium.

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To become certified, reviewers with the SAFETY Act assess stadiums for their compliance with the most up-to-date terrorism products. They look at their built-in emergency response plans, cyber security measures, hiring and training of employees, among other criteria.

The process can take over a year, but once certified, stadiums benefit because liability for an event is lessened. One thing to remember, however, is that the added SAFETY Act protection only holds weight when a catastrophic event is classified as an act of terrorism.

“Generally speaking, I think the SAFETY Act has been instrumental in paving the way for an accelerated development of anti-terrorism products and services,” said Tomlinson.

“The benefit of gaining elements of impunity from third-party liability related matters has served as a catalyst for developers to continue to push the envelope, so to speak, in terms of ideas and innovation.”

So while attackers are changing their methods and trying to stay ahead of safety protocols at stadiums, the SAFETY Act, as well as risk managers and stadium owners, keep stadiums investing in newer, more secure safety measures. &

Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]