Public Sector Safety

Protecting the Peacekeepers

Public safety employees face higher risk, but tend to flout safety rules.
By: | November 1, 2013 • 7 min read

A decade ago, the City of Knoxville paid an annual workers’ compensation bill of over $5 million. In recent years, the bill has averaged less than $2 million, thanks to professional risk management and top-down buy-in to the safety culture from the entire municipal government.

Knoxville is one of the many municipalities, counties and states to cultivate safe work environments for the nation’s 18.5 million full-time public employees. “The cheapest and most effective risk management is avoiding the risk in the first place,” said Chuck Wright, president of Travelers Public Sector Services. Risk management is itself the product of a deliberate and coordinated effort by a lot of smart people, including engineers, risk managers, ergonomists, purchasing managers and health care providers, Wright said.

Still, the public sector is an area where risk managers rightly fear the workers’ compensation exposures. And just as all politics is local, so is the most acute public sector injury risk.

Full-time local government workers reported the nation’s highest rate of work-related illnesses and injuries (6.1 percent) in 2011, according to the Bureau of Labor Statistics. State workers clocked in at 4.6 percent and private sector workers at 3.5 percent in 2010.


The Affordable Care Act, which stresses the kind of health and wellness programs public entities are adopting, will probably not affect workers’ compensation programs significantly, according to Steve Wurzelbacher, research industrial hygienist in the National Institute for Occupational Safety and Health, Division of Surveillance, Hazard Evaluations and Field Studies.

“Most sensible people don’t rush into burning buildings or run toward a bad guy with a gun.”
— Jim Bueermann, president, Police Foundation

Police and firefighters, who do inherently dangerous jobs, incur the most frequent and severe workers’ compensation claims of all public sector workers. “Most sensible people don’t rush into burning buildings or run toward a bad guy with a gun,” said Jim Bueermann, president of the Police Foundation. Police are almost 100 percent guaranteed to get hurt on the job, he said, because of the physical nature of their jobs and because they work around people who want to hurt them.

However, many workers’ compensation claims, even among the superhero class of workers, are for “ordinary” injuries and conditions, such as car accidents, repetitive motion and joint injuries, as well as stress- and obesity-related conditions.

Gary Eastes, Knoxville’s risk and benefits manager and a 2012 Risk & Insurance® Teddy Award winner, attributes much of his city’s drop in workers’ compensation claims to safety’s recent visibility on the municipality’s collective radar screen. Over many years and in small increments, Knoxville adopted many of OSHA’s workplace safety recommendations. Now, it performs routine safety inspections, including weekly spot inspections at intersections for seat belt use.

Knoxville now boasts almost 100 percent compliance for seat belt use, even among police, who are notorious for dissing the law they are charged with enforcing, according to John Chino, area senior vice president and member of the Public Sector leadership team at Arthur J. Gallagher.

The bulky hardware on officers’ service belts — baton, sidearm, radio, cuffs, Taser — can make buckling up awkward, uncomfortable, and slow at a time when speed counts, said Rich Roberts, director of special operations and public information at the International Union of Police Associations, AFL-CIO.

Cops Don’t Wear Seat Belts

The National Highway Traffic Safety Administration reports that more officers died in traffic incidents in 2010 than from any other cause, and 42 percent weren’t wearing seat belts. Many of the other 58 percent may have been left gravely injured and possibly, disabled. This is a tragedy for the officer and a huge financial burden for the insurer, Roberts said, especially for young, otherwise healthy officers who can expect many years of disability.

“Officers should always wear seat belts,” Roberts said.

“Seat belts are our most visible safety rule,” Eastes said, and officers who flout this rule are likely to flout others.

“Police started to take safety rules seriously when Knoxville’s civilian management put its foot down about seat belts,” he said.

Knoxville’s new wellness culture also helped tame workers’ compensation claims. The city employs three full-time certified ergonomists and a physical therapy team, which works with firefighters on safe ways to perform emergency medical services, such as carrying people down stairs and moving them out of crushed cars. Its on-site physical therapist works with the city’s medical team, which aids complex treatments, such as that for a diabetic with a knee injury.

Technology also offers some solutions, Eastes said, such as single-driver automated sanitation trucks that replace “the two guys hanging off the back of the truck,” who are subject to shoulder and back injuries from repeatedly lifting heavy loads. The technology will pay for itself in reduced workers’ compensation costs, he said.


As a matter of due diligence, said Travelers’ Wright, public entities should always perform routine checks on employees, such as confirming that those who drive for their jobs hold current licenses and have maintained clean driving records.

Unions and Politics

Contrary to the expectation that unions and municipalities are naturally at odds, Wright said, they actually share a common interest in employees’ well-being. This applies even in potentially explosive return to work cases for injured workers. Lost time from work costs municipalities dearly, both in overtime costs for other workers to pick up the slack and in medical benefits.

“For the city’s sake and the worker’s sake, everyone’s goal is getting workers back to work at the right time.”
— Chuck Wright, president, Travelers Public Sector Services

“For the city’s sake and the worker’s sake, everyone’s goal is getting workers back to work at the right time,” Wright said. Coordinated medical treatment and careful case management, combined with proactive risk control services, can determine the “right time” in each individual case.

“What helps this formula be successful is selecting the right partners to coordinate medical care,” said Joe Boures, president of managed care company Healthcare Solutions. “Research has proven that over time, not properly managing care leads to significantly increased medical costs and delayed return to work.”

In states with particularly generous workers’ compensation laws, such as, Illinois, Florida, New York and especially California, workers may have a financial disincentive to return to work promptly, said Dan Guth, an area vice president at Arthur J. Gallagher.

Police and firefighters who belong to the Public Employees Retirement System can collect 100 percent of their salary, tax free, for up to a year for each industrial injury; other public sector workers generally can collect two-thirds of their average weekly salaries. Some public entities try to return compromised employees to light duty or part-time work to save costs and hasten recovery, but many simply keep them out of work until they get medical clearance to return to their jobs.

Even though the cop or firefighter wins financially for a year by protracting their disability leave, said the Police Foundation’s Bueermann, most prefer to return to work as soon as they’re able, since a long furlough often heralds the end of their careers, especially for older workers.

California’s generous workers’ compensation laws also produce a slew of “additional body parts” claims, especially, as the statistics suggest, for teachers.

“An attorney may expand the original back or knee injury claim to include a sleep disorder, internal injury, stress or psych claim or sexual dysfunction,” Guth said. Municipalities and their insurers should scrutinize the claim for legitimacy.

Although it happens rarely, unions can be an obstacle to workplace safety in the area of safety incentives, said Chino.

“Some public agencies consider a reward system of money or extra time off for individual employees who use personal safety equipment, but the unions object on the grounds of special treatment for a few employees.”

When Self-Insurance Works

The Mesquite, Texas, School District meets the criteria for self insurance. It employs 5,400, so it has a sufficiently large pool of insureds. It has a strikingly low incidence rate — 1.11 of every 100, far below the 6.1 percent of its national cohort. Almost all of its 182 to 200 claims per year are from slips, trips and falls, plus violence from the occasional agitated student, said James Huckaby, the district’s administrative officer of operations and risk management. Those are the kind of injuries that inevitably slip through the district’s fine net of safety education; careful housekeeping; low-cost, easy-access medical facilities; wellness programs; and safety best practices. Its workers’ compensation costs have been stable for several years, averaging about $700,000 per year.


Like Knoxville, which is also self-insured, Mesquite’s top-level elected officials support the safety programs that minimize on-the-job injuries. Both entities have the support infrastructure to administer their self-insured programs and cash reserves to pay claims.

These attributes — strong infrastructure, a sufficiently large insured universe, top-level support, safety buy-in from the workforce, predictably low claims and fiscal discipline — point to a municipality in a good position to self-insure, said Victoria Nolan, risk and benefits manager for Clean Water Services in Oregon.

“Public entities may want to self-insure because it’s cheaper than commercial insurance, or they can manage their programs better or both,” Nolan said, but they should scope their readiness to take on the considerable financial and administrative responsibilities first.

“An entity that hires a third-party administrator can give up any cost savings on the claims side to administrative fees,” she said. “A feasibility study will show if it’s a good choice.”

** This story is Part II of a three-part series.Read Part I, Stretching Risk Management, and Part III, Cutting Down Agriculture Risk. **

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.


In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.


Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”


How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.


One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]