NGO Safety Risks

Helping the Helpers

Aid organizations are stepping up risk management and safety programs for volunteers working in dangerous parts of the world.
By: | August 31, 2016 • 7 min read

From civilian war casualties to masses displaced by natural catastrophes to the survivors of devastating events, nongovernmental organizations (NGOs) have long provided aid to people in crisis. But NGOs still are working on how to better protect their own workers, supplies and assets from the same perils — and others — that aid recipients face.

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Indeed, over just the past half-decade, smaller international aid organizations — which make up the bulk of the NGO community — have significantly formalized and beefed up their risk management programs.

Part of that is serendipitous, as the insurance market generally has softened for NGOs, and technological advancements have improved these organizations’ ability to keep their workers safe, experts say. But court cases also have had an impact.

Shifting Legal Landscape

“There were some organizations that just weren’t appropriately sensitive to the exposures [faced by workers],” said Scott R. Konrad, a New York-based senior vice president and the not-for-profit business practice leader for HUB International Northeast Ltd.

Konrad says their “wake-up call” was the lawsuit that aid volunteer Flavia Wagner filed against NGO Samaritan’s Purse following her abduction and 105-day captivity in Sudan in 2010.

Scott Konrad, senior vice president and not-for-profit business practice leader, HUB International Northeast Ltd.

Scott Konrad, senior vice president and not-for-profit business practice leader, HUB International Northeast Ltd.

Wagner alleged the organization neither adequately trained her nor promptly paid her kidnappers’ ransom demands. Without admitting liability, the NGO settled, although it said it had trained Wagner and she had signed a hold-harmless agreement elucidating the risks she faced.

Two years after Wagner’s ordeal, four Norwegian Refugee Council staff members in Kenya were kidnapped for four days. Another was shot and injured during the abduction. A Norwegian court in 2015 ruled the NRC was grossly negligent in how it handled the incident.

“Key to the ruling was the court’s verdict that they ‘cannot see that there is a basis for applying a more lenient standard of due care for employers within the aid sector than that for other employers,’ ” said Matthew Smith, a London-based associate managing consultant for risk consultant NYA International Ltd.

“Although this was just a Norwegian verdict, this and other incidents have given the international NGO industry impetus to examine their security risk management procedures with a view to ensuring duty of care.”

Those workers’ experiences were not unique. From 2004 through 2014, the last year for which data is available, the number of major attacks against aid operations worldwide and the resulting number of aid worker victims climbed dramatically, according to the Aid Worker Security Database. The AWSD is a project of London-based Humanitarian Outcomes, an independent research and policy advisory organization.

In 2014, there were 329 attacks and 190 victims, compared to 125 attacks and 63 victims in 2004. In 2013, the number of attacks and victims reached record levels: 474 and 264, respectively.

NGOs’ Insurance Portfolio

NGOs and their workers also face numerous additional risks, which the organizations are insuring as well.

Besides being injured or kidnapped while on assignment, workers also can be injured traveling to and from assignments, and they can suffer a work- or non-work-related illness, disease or injury in a foreign land. All of those incidents could necessitate medical attention and evacuation.R9-1-16p49-50_8Aid.indd

If the NGO is large enough, it also might send supplies and assets, such as vehicles, to a country. Indeed, vehicle fleets usually are the second-highest expense after employee compensation for those NGOs, according to Washington, D.C.-based specialty broker Clements Worldwide.

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NGOs also face foreign general liability risk and professional liability risk.

“The international aid organization insurance portfolio, in terms of breadth of coverages, is looking a lot more like a commercial portfolio these days,” said Bruce Cohen, a Washington, D.C.-based managing director in the multinational client services unit at Marsh LLC.

“I definitely think [risk management] has evolved” at NGOs, said Meghan Smith, a Philadelphia-based senior account executive in the commercial markets unit at Zurich North America.

NGOs today are better informed about not only “coverages and what they should be looking for,” but also about local insurance requirements overseas regarding admitted coverage and minimum limits, she said.

Bruce Cohen, managing director, Marsh

Bruce Cohen, managing director, Marsh

While there is plenty of insurance market competition for their risks, NGOs need to be circumspect about what they purchase, brokers advise.

For example, coverage often excludes war and terrorism, said Scott Lockman, director of commercial insurance for Clements.

In some cases, war risk is excluded and terrorism is not, but the lines between those two risks “can be blurred,” said Joseph Weiss, a New York-based vice president of underwriting and the segment leader for corporate accident and sickness business at Chubb.

Sometimes, insurers do not extend coverage to certain countries or for endemic diseases, Marsh’s Cohen said.

NGOs can buy back those coverages, however.

Lockman noted that Clements and Lloyd’s of London syndicates have developed a block of coverages for NGOs that include war and terrorism coverage. Only some of the larger NGOs historically have purchased kidnap and ransom coverage.

But Christopher Arehart, a Chicago-based senior vice president and product manager at Chubb, has “seen an uptick in the K&R product from aid organizations,” including some interest from smaller organizations.

Smaller NGOs are realizing their workers might not be covered by the K&R insurance purchased by an umbrella organization that has contracted for the smaller groups’ services, he said.

“It comes down to a calculated analysis of a risk happening, and sustaining a loss, and what’s non-negotiable, like worker protection.” — Laura Schauble, vice president of risk management, ACDI/VOCA

Budgets, however, continue to affect NGOs’ purchase decisions.

“It comes down to a calculated analysis of a risk happening, and sustaining a loss, and what’s non-negotiable, like worker protection,” said Laura Schauble, the Washington, D.C.-based vice president of risk management at NGO ACDI/VOCA.

For example, ACDI/VOCA, which promotes economic growth in emerging democracies, insures its fleets overseas for the most common losses: collision damage and theft.

But it typically does not buy terrorism coverage, since the NGO does not operate in war zones, Schauble said.

Risk Mitigation

Many brokers and insurers team with risk consultants to help NGOs mitigate risk.

“But not everybody [among NGOs] is aware of that,” said John Warren, a vice president and client executive for Marsh in Washington D.C.

“They think they have to go out to consultants, but it’s already paid for.”

In any case, experts see NGOs paying closer attention to their duty of care.

George Taylor, the Annapolis, Md.-based vice president of global operations at risk management consultant iJet International, finds that NGOs are conducting far more research on the regions they will be operating in.

Christopher Arehart, senior vice president and product manager, Chubb

Christopher Arehart, senior vice president and product manager, Chubb

NGOs also are more engaged in assessing how workers will move about the area they will be working in, where workers will lodge or camp, and other worker vulnerabilities, risk consultants said.

NGOs are taking steps to mitigate the risks to workers by, for example, establishing check-in, in-country travel and lodging protocols, Taylor said. Many NGOs also are embedding a full-time security adviser in their field teams, rather than directing a senior project leader to assume those added duties, he said.

Advances in technology are enabling NGOs to keep better track of their workers, risk management experts said.

For example, volunteers have smartphone and notebook travel apps that provide intelligence, updates and emergency alerts about the areas where they are working.

To ensure workers do not miss critical information, the apps can be set to chime when information arrives. Other apps provide GPS tracking information on workers to their organizations’ security contractors.

George Taylor, vice president, global operations, iJet International

George Taylor, vice president, global operations, iJet International

And more NGOs are outfitting workers with satellite phones in case a region’s cell phone or Wi-Fi service is interrupted, iJet’s Taylor said.

To reduce the kidnapping risk, some NGOs working in the Eastern Hemisphere are setting up local affiliates that are overseen by Westerners but tap field workers largely from local regions, Chubb’s Arehart said.

Especially significant, before workers head out on assignment, more NGOs now rehearse crisis plans with project managers, group leaders and volunteers, risk advisers said.

“You can never rehearse enough,” Taylor said. “People need to know their part of the plan” for staying safe and responding when safety and health conditions deteriorate.

“It’s all about education,” Clements’ Lockman said.

At ACDI/VOCA, that education process includes detailing the risk management program’s limitations, Schauble said. For example, medical evacuations are run out of commercial airports, not remote locations. Ensuring that workers fully understand how a risk management program is designed is critical to getting their buy-in of the program, Schauble said.

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“So what I see now is more of an organizational effort and individual commitment” to risk management, Taylor said. To him, improved NGO risk management comes down to four elements:

• Staying informed.
• Maintaining situational awareness.
• Having a communication plan.
• Rehearsing.

“NGOs can no longer simply accept security risks in the same way they did previously, given the multiplicity of threats to their personnel and a tightening legal landscape,” NYA International’s Smith said.

However, “there’s room for improvement,” Taylor said. &

Dave Lenckus is a freelance writer for Risk & Insurance®. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

High Net Worth

High Net Worth Clients Live in CAT Zones. Here’s What Their Resiliency Plan Should Include

Having a resiliency plan and practicing it can make all the difference in a disaster.
By: | September 14, 2018 • 7 min read

Packed with state-of-the-art electronics, priceless collections and high-end furnishings, and situated in scenic, often remote locations, the dwellings of high net worth individuals and families pose particular challenges when it comes to disaster resiliency. But help is on the way.

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Armed with loss data, innovative new programs, technological advances, and a growing army of niche service-providers aimed at addressing an astonishingly diverse set of risks, insurers are increasingly determined to not just insure against their high net worth clients’ losses, but to prevent them.

Insurers have long been proactive in risk mitigation, but increasingly, after the recent surge in wildfire and storm losses, insureds are now, too.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy,” said Laura Sherman, founding partner at Baldwin Krystyn Sherman Partners.

And especially in the high net worth space, preventing that loss is vastly preferable to a payout, for insurers and insureds alike.

“If insurers can preserve even one house that’s 10 or 20 or 40 million dollars … whatever they have spent in a year is money well spent. Plus they’ve saved this important asset for the client,” said Bruce Gendelman, chairman and founder Bruce Gendelman Insurance Services.

High Net Worth Vulnerabilities

Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

As the number and size of luxury homes built in vulnerable areas has increased, so has the frequency and magnitude of extreme weather events, including hurricanes, harsh cold and winter storms, and wildfires.

“There is a growing desire to inhabit this riskier terrain,” said Jason Metzger, SVP Risk Management, PURE group of insurance companies. “In the western states alone, a little over a million homes are highly vulnerable to wildfires because of their proximity to forests that are fuller of fuel than they have been in years past.”

Such homes are often filled with expensive artwork and collections, from fine wine to rare books to couture to automobiles, each presenting unique challenges. The homes themselves present other vulnerabilities.

“Larger, more sophisticated homes are bristling with more technology than ever,” said Stephen Poux, SVP and head of Risk Management Services and Loss Prevention for AIG’s Private Client Group.

“A lightning strike can trash every electronic in the home.”

Niche Service Providers

A variety of niche service providers are stepping forward to help.

Secure facilities provide hurricane-proof, wildfire-proof off-site storage for artwork, antiques, and all manner of collectibles for seasonal or rotating storage, as well as ahead of impending disasters.

Other companies help manage such collections — a substantial challenge anytime, but especially during a crisis.

“Knowing where it is, is a huge part of mitigating the risk,” said Eric Kahan, founder of Collector Systems, a cloud-based collection management company that allows collectors to monitor their collections during loans to museums, transit between homes, or evacuation to secure storage.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy.” — Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

Insurers also employ specialists in-house. AIG employs four art curators who advise clients on how to protect and preserve their art collections.

Perhaps the best known and most striking example of this kind of direct insurer involvement are the fire teams insurers retain or employ to monitor fires and even spray retardant or water on threatened properties.

High-Level Service for High Net Worth

All high net worth carriers have programs that leverage expertise, loss data, and relationships with vendors to help clients avoid and recover from losses, employing the highest levels of customer service to accomplish this as unobtrusively as possible.

“What allows you to do your job best is when you develop that relationship with a client, where it’s the same people that are interacting with them on every front for their risk management,” said Steve Bitterman, chief risk services officer for Vault Insurance.

Site visits are an essential first step, allowing insurers to assess risks, make recommendations to reduce them, and establish plans in the event of a disaster.

“When you’re in a catastrophic situation, it’s high stress, time is of the essence, and people forget things,” said Sherman. “Having a written plan in place is paramount to success.”

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Another important component is knowing who will execute that plan in homes that are often unoccupied.

Domestic staff may lack the knowledge or authority to protect the homeowner’s assets, and during a disaster may be distracted dealing with threats to their own homes and families. Adequate planning includes ensuring that whoever is responsible has the training and authority to execute the plan.

Evaluating New Technology

Insurers use technologies like GPS and satellite imagery to determine which homes are directly threatened by storms or wildfires. They also assess and vet technologies that can be implemented by homeowners, from impact glass to alarm and monitoring systems, to more obscure but potentially more important options.

AIG’s Poux recommends two types of vents that mitigate important, and unexpected risks.

“There’s a fantastic technology called Smart Vent, which allows water to flow in and out of the foundation,” Poux said. “… The weight of water outside a foundation can push a foundation wall in. If you equalize that water inside and out at the same level, you negate that.”

Another wildfire risk — embers getting sucked into the attic — is, according to Poux, “typically the greatest cause of the destruction of homes.” But, he said, “Special ember-resisting venting, like Brandguard Vents, can remove that exposure altogether.”

Building Smart

Many disaster resiliency technologies can be applied at any time, but often the cost is fractional if implemented during initial construction. AIG’s Smart Build is a free program for new or remodeled homes that evolved out of AIG’s construction insurance programs.

Previously available only to homes valued at $5 million and up, Smart Build recently expanded to include homes of $1 million and up. Roughly 100 homes are enrolled, with an average value of $13 million.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work.” — Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“We know what goes wrong in high net worth homes,” said Poux, citing AIG’s decades of loss data.

“We’re incenting our client and by proxy their builder, their architects and their broker, to give us a seat at the design table. … That enables us to help tweak the architectural plans in ways that are very easy to do with a pencil, as opposed to after a home is built.”

Poux cites a remote ranch property in Texas.

Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“The client was rebuilding a home but also installing new roads and grading and driveways. … The property was very far from the fire department and there wasn’t any available water on the property.”

Poux’s team was able to recommend underground water storage tanks, something that would have been prohibitively expensive after construction.

“But if the ground is open and you’ve got heavy equipment, it’s a relatively minor additional expense.”

Homes that graduate from the Smart Build program may be eligible for preferred pricing due to their added resilience, Poux said.

Recovery from Loss

A major component of disaster resiliency is still recovery from loss, and preparation is key to the prompt service expected by homeowners paying six- or seven-figure premiums.

Before Irma, PURE sent contact information for pre-assigned claim adjusters to insureds in the storm’s direct path.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work,” said Curt Goetsch, head of underwriting for Ironshore’s Private Client Group.

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“If you’ve got custom construction or imported materials in your house, you’re not going to go down the street and just find somebody that can do that kind of work, or has those materials in stock.”

In the wake of disaster, even basic services can be scarce.

“Our claims and risk management departments have to work together in advance of the storm,” said Bitterman, “to have contractors and restoration companies and tarp and board services that are going to respond to our company’s clients, that will commit resources to us.”

And while local agents’ connections can be invaluable, Goetsch sees insurers taking more of that responsibility from the agent, to at least get the claim started.

“When there is a disaster, the agency’s staff may have to deal with personal losses,” Goetsch said. &

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]