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Sponsored Content: Allied World

Proactive Policies Help Companies Handle Workplace Harassment

The spotlight on workplace harassment is new, but the issue itself is not.
By: | April 2, 2018 • 7 min read

#MeToo, #TimesUp – these hashtags and the movements they represent were originally focused on the entertainment industry and political figures.

But no longer.

Over the last few months many corporate executives have been outed for their inappropriate or illegal actions toward women in the workplace. And it seems that a new bold-faced name appears in the headlines each week.

These high-profile cases are just the tip of the iceberg. While the big names may grab headlines, no industry or company of any size is immune to the risk of workplace harassment. Increased awareness around the issue is emboldening others to speak up and sexual harassment is now an exposure knocking on the door of every boardroom.

“We’re in the midst of a culture shift where society is paying more attention to equality and safety in the workplace,” said Gregg Glick, Senior Vice President, Private/Not-for-Profit Practice Lead, Private/Healthcare Division, Allied World.

But while the spotlight is new, the issue at hand is not.

“As an insurer, we have long seen allegations of workplace harassment resulting in Employment Practice Liability (EPL) claims, including not just harassment but also hostile work environment and wrongful termination,” Glick said. “Our focus has always been on managing the risk by fostering a safe work environment. It’s not just about an insurance policy, it is about a culture.”

Establishing a corporate culture in which safety and respect are valued and protected is the best way to manage the exposure long term.

To create and continually reinforce this culture, companies need to reevaluate their policies, incident reporting procedures and response plans. To ensure up-to-date, clear and effective policies, they can rely on the risk expertise of insurers with experience in and commitment to the employment practices liability space.

Strong, Current Policies and Consistent Enforcement are the Foundation for a Healthy Culture

Gregg Glick, Senior Vice President, Private/Not-for-Profit Practice Lead, Private/Healthcare Division

Small companies may have no formal written policies whatsoever. And employers with outdated policies may also be underprepared to address the exposure.

“Policy effectiveness is determined by how contemporary and well-reviewed they are, and by how they are deployed and enforced in the workplace. This is where you’re going to start to build the culture that’s going to foster a safe environment,” Glick said. “Policies that are outdated, unclear, or not well-communicated to employees don’t achieve much.”

Employee handbooks that haven’t been updated in a decade may no longer be comprehensive enough to address that various realms and modes in which workers interact. For example, they likely do not account for the prevalence of smartphones and social media or address cyber bullying.

Employees also need a way to report inappropriate behavior safely. This could mean setting up an anonymous hotline managed by a third party, or a private way to notify human resources. It has to be more robust than simply having employees report incidents to their direct manager.

“What if the manager is the harasser?” Glick said. “Few people would be willing to confront him or her directly and risk threatening their job status. Employees need to know how to share information with someone who’s going to help them. These policies have to be clear, easy to follow, and communicated often.”

Once an employee files a complaint, there also must be clear investigation procedures.

“Given the amount of public attention on sexual harassment in the workplace, companies may be inclined to take immediate action because they don’t want to look like they stood by and did nothing,” Glick said. “Every allegation must be taken seriously, but companies need to be able to conduct thorough investigations.”

Making a reactionary decision like terminating or suspending the accused on the spot could result in a wrongful termination claim if it turns out there was no bad behavior, and damage the company’s reputation.

If an investigation corroborates an employee’s claim and someone is guilty of inappropriate or hostile behavior, a clear response protocol should dictate next steps. A zero-tolerance policy ensures that a company’s response is consistent across the board, regardless of the severity of the claim or the position of those involved.

Every step that would normally be taken to terminate an employee should remain in place, and documented thoroughly. Rushing through an investigation or skipping steps of the process can be a violation of employment law and open a company up to wrongful termination lawsuits.

“Not every incident is preventable. There will always be bad apples, but your culture is defined by how you respond,” Glick said.

Be Prepared to Act Quickly and Effectively

Crystal clear procedures make it easier to catch, investigate and respond to incidents, but crafting these policies to be compliant and accessible to employees can be challenging, especially for small and mid-size companies with more limited resources.

Tools are available in the marketplace to help risk managers strengthen their defenses.

Third party risk management consultants and service providers can help companies stay up to date on their state’s employment laws via monthly updates and real-time alerts. Training modules for employees also remind them of the consequences of inappropriate workplace behavior and reinforce company policies. Portals and libraries for human resource managers provide template forms and posters, additional training materials, and regulatory news.

Some also offer handbook-building tools, which allow companies to craft custom policies that are applicable to their workforce while remaining compliant with federal and state law. This can help firms update existing policies or create completely new ones.

Around-the-clock helplines are another critical resource that risk managers would be remiss not to take advantage of. Employment practices attorneys with state-specific expertise are on call to answer insureds’ questions and offer advice, free of charge.

“This is an opportunity to have an experienced attorney walk you through a situation before it turns into a claim. If someone has a complaint, and you’re unsure of the proper protocol, how to launch an investigation, or what is required by law in your state, the answer is only a phone call away,” Glick said.

“We offer a 24/7 helpline, among other services, through our relationship with the workplace HELPLINE, powered by Enquiron®, a risk management consulting firm. Companies that utilize these services proactively position themselves for better claim outcomes.”

Unfortunately, many HR managers and risk professionals are unaware of services, missing opportunities to mitigate their exposure and avoid potential claims. Rather than leave insureds to find these resources on their own, Allied World works with brokers to educate them about their offerings from the time a policy is bound.

Heightened Risks and Changing Markets Require Working with High Quality Partners

Amid a societal shift demanding change, companies can expect employment practices insurance coverages to shift as well. Awareness will likely drive up claim frequency, and settlements for EPL lawsuits are climbing. As a result, rates could trend upward as well.

“Brokers can anticipate some market hardening, rising rates, tighter terms and conditions,” Glick said. “We have always been careful and thoughtful about risk selection, and thus are well positioned to not have to react hastily amid the culture shift and changing market conditions. All insurers in this space should be proactively analyzing their books to ensure they are accepting the right risks.”

Allied World evaluates each risk on its own merits, looking at criteria like industry type, employee size, and region. It carefully evaluates its portfolio on a regular basis to check its aggregate risk and limits. This means they are positioning themselves to stay competitive in the market over the long haul and avoid sudden changes in terms and conditions or rates.

“And that’s what you want in a partnership – no surprises,” Glick said. “We’ve been in the market for 10 years. We understand the needs of mid-size companies, and are committed to meeting those needs consistently.”

Communication with brokers and insureds is key to staying ahead of the risk and positioning every party to be prepared for changes in the exposure itself and the market landscape. Allied World’s senior leaders, each with an average 10 years of experience in the field, undergo continual education around the changing nature of the risk and regulatory landscape. Deployed throughout the country, they are always on-hand and accessible to answer insureds’ questions.

To learn more, visit https://www.alliedworldinsurance.com/.

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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 Allied World. The editorial staff of Risk & Insurance had no role in its preparation.




Allied World is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions.

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.