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 And employers with outdated policies may also be underprepared to address the exposure.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

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]