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Loss Prevention

How To Manage Losses Due To Slips and Falls in High-End Retail

New advancements in tribometry are advancing the art and science of slips and falls prevention.
By: | May 1, 2018 • 5 min read

Picture this: It’s the busy holiday shopping season. A mid-December snow, while charming and evocative of Christmas carols, brings moisture to the streets of New York, some of which is tracked into the foyer and shopping aisles of one of that city’s high-end retailers.

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A shopper in her early seventies, well off but not as nimble as she once was, rounds the corner of one of the store’s aisles, which is more choked than usual with holiday sale displays and eye-catching impulse items.

She’s not in dressy high heels, but is wearing stylish leather boots with three-inch heels.  Momentarily distracted, perhaps by the beauty of a glittering bulb on a real-life Christmas tree, or a nudge from a passing shopper, she steps on a slick point of the polished floor, made more slippery by those melted snowflakes. She slips, throws out her arm to catch something and catches nothing, striking the floor head first and suffering a traumatic brain injury.

This horrendous scenario, though not a frequent occurrence in high-end retail, does occur. And when it happens, it results not only in life-altering injuries but also settlements in the six figures. Employees are at risk as well. More than 17 percent of all disabling workplace injuries are caused by slips and falls.

Mitigating slips and falls in retail, in general, is complicated. But high-end retail, with its focus on heritage properties, original design materials and glossy finishes, carries its own set of risk management complications.

According to Walter Palmer, loss control expert and practice leader, EPIC Insurance Brokers & Consultants, high-end retail and its focus on design does present its own challenges; things such as marble staircases and vintage throw rugs aren’t a risk manager’s preferred materials.

“One of the challenges for risk managers is to have to work around those parameters the best they can so that they can support the artistic vision that the company has and at the same time be able to mitigate the risk. At high-end retail, they need to be able to tell that story to their broker,” he said.

I always tell my retail clients to take pictures right off the bat because you have one shot at that when a fall happens.  Richard Gelok, Florida-based casualty general adjuster, Engle Martin

And although some high-end retailers shoot for a consistent look in their stores across the country, others may go for different styles, varying the layout from store to store, making the risk manager’s job that much harder.

High-end retailers also need to be very “buttoned down” about the way they report accidents. In the area of what claims adjusters call “frequent fliers,” or slip and fall fraudsters, Palmer’s high-end retail clients say they feel they are targeted by fraud perpetrators more often because of the perception they have deeper pockets and may also be more sensitive to the reputational hit of a casualty lawsuit.

Train and Document

Generally speaking, when it comes to the size of a claim, it matters more how severely injured a claimant is and how negligent the store owner was than the brand of the store. According to a veteran casualty claims adjuster, when an accident happens, documenting it well and handing the case off to the adjuster in good order is paramount.

“I always tell my retail clients to take pictures right off the bat because you have one shot at that when a fall happens,” said Richard Gelok, Florida-based casualty general adjuster, Engle Martin.

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“I can come back 24 hours later after I get assigned the file and the scene is not going to be the same at all,” Gelok said. “It’s important to make an assessment of the claimant, if they’re smelling of alcohol, if they’re slurring their words, or if they were on their phone. There is comparative negligence with every slip and fall, in my opinion.”

“You’re going to have different defenses with respect to the defect that is being claimed,” said Kari Melkonian, a Michigan-based attorney of Collins, Einhorn, Farrell PC, who defends insureds and their insurance companies in slip-and-fall cases.

“Premises owners, in general, have a duty to protect invitees against known dangerous conditions on the property. Landlords owe additional statuatory duties to their tenants,” Melkonian said.

Videotaping store aisles can help a defendant if it can be shown that 90 people walked down a given aisle in one afternoon and only one of them fell and there was no evidence of water or any other hazard, she said.

Like Engle Martin’s Gelok, Melkonian said training employees to document the circumstances of the incident well, including taking photographs and interviewing the person that fell, are best practices.

Simple Chemistry

In 2010, commercial insurer CNA noticed an uptick in general liability claims involving slips and falls. The company set out to learn more about the topic and came up with some noteworthy conclusions.

In a two-year study of hard surface floors in commercial workplaces, CNA found that 50 percent of the surfaces studied did not meet the minimum traction standards set by the American National Standards Institute.

Walter Palmer
Practice leader with EPIC Insurance Brokers & Consultants

“From both the frequency and the severity standpoint, safety managers for these types of facilities aren’t always aware of the extent of their slip-and-fall exposure,” said Steve Hernandez,  senior vice president of risk control, CNA.

CNA’s study authors came up with four key strategies to implement:

Select the right flooring. This includes not only the properties of the flooring itself, but also the space and the environment;

Test your floors for slip resistance. The science of tribometry measures slip resistance. This allows premises owners to better comply with flooring manufacturers’ specifications;

Choose the right cleaning agents: This one gets complicated. It involves insuring that cleaning vendors are not only using the right cleaning agents for the type of flooring they are cleaning, but that they are financially stable, ethically sound and operate under a strong risk management structure.

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Even the way you store a mop matters, said CNA’s Hernandez. “The handle end should point down. Keeping the mop end on the floor means it’s always in contact with debris and won’t clear away contaminants as effectively;” and

Promote awareness of slip-and-fall hazards. This involves removing walkway obstacles, displaying signage in areas with floor elevation changes, placing mats near doorway entrances and using design that reduces reflective glare.

Falls among adults are the most common cause of traumatic brain injury. The CNA study reports that among its closed claims between 2007 and 2012, the average cost of a traumatic brain injury in a general liability claim was $269,643. The average cost of a traumatic brain injury in workers’ comp claims was $259,153.

EPIC’s Palmer said “underwriters are looking for good visibility and good reporting not just on the metrics as far as the final results, but also causality. They’re looking toward a comprehensive approach in terms of how you address it from a training perspective and the scientific aspect, making sure that you have corporately approved cleaning agents that work well in your environment.” &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Pharma Under Fire

Opioids Give Rise to Liability Epidemic

Opioids were supposed to help. Instead, their addictive power harmed many, and calls for accountability are broadening.
By: | May 1, 2018 • 8 min read

The opioid epidemic devastated families and flattened entire communities.

The Yale School of Medicine estimates that deaths are nearly doubling annually: “Between 2015 and 2016, drug overdose deaths went from 33,095 to 59,000, the largest annual jump ever recorded in the United States. That number is expected to continue unabated for the next   several years.”

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That’s roughly 160 deaths every day — and it’s a count that’s increasing daily.

In addition to deaths, the number of Americans struggling with an opioid disorder disease (the official name for opioid addiction) is staggering.

The National Institute on Drug Abuse (NIDA) estimates that 2 million people in the United States suffer from substance use disorders related to prescription opioid pain relievers, and roughly one-third of those people will “graduate” to heroin addiction.

Conversely, 80 percent of heroin addicts became addicted to opioids after being prescribed opioids.

As if the human toll wasn’t devastating enough, NIDA estimates that addiction costs reach “$78.5 billion a year, including the costs of health care, lost productivity, addiction treatment, and criminal justice involvement.”

Shep Tapasak, managing principal, Integro Insurance Brokers

With numbers like that, families are not the only ones left picking up the pieces. Municipalities, states, and the federal government are strained with heavy demand for social services and crushing expenditures related to opioid addiction.

Despite the amount of money being spent, services are inadequate and too short in duration. Wait times are so long that some people literally die waiting.

Public sector leaders saw firsthand the range and potency of the epidemic, and were among the first to seek a legal reckoning with the manufacturers of  synthetic painkillers.

Seeking redress for their financial burden, some municipalities, states and the federal government filed lawsuits against big pharmaceutical companies and manufacturers. To date, there are more than 100 lawsuits on court dockets.

States such as Ohio, West Virginia, New Jersey, Pennsylvania and Arkansas have been hit hard by the epidemic. In Arkansas alone, 72 counties, 15 cities, and the state filed suit, naming 65 defendants. In Pennsylvania, 16 counties, Philadelphia, and Commonwealth officials have filed lawsuits.

Forty one states also have banded together to subpoena information from some drug manufacturers.

Pennsylvania’s Attorney General, Josh Shapiro, recently told reporters that the banded effort seeks to “change corporate behavior, so that the industry can no longer do what I think it’s been doing, which is turning a blind eye to the effects of dumping these drugs in the communities.”

The volume of legal actions is growing, and some of the Federal cases have been bound together in what is called multidistrict litigation (MDL). These cases will be heard by a judge in Ohio. Plaintiffs hope for a settlement that will provide funding to be used to help thwart the opioid epidemic.

“From a societal perspective, this is obviously a big and impactful issue,”  said Jim George,  a managing director and global claims head with Swiss Re Corporate Solutions. “A lot of people are suffering in connection with this, and it won’t go away anytime soon.

“Insurance, especially those in liability, will be addressing this for a long time. This has been building over five or six years, and we are just now seeing the beginning stages of liability suits.” 

Basis for Lawsuits

The lawsuits filed to date are based on allegations concerning: What pharma knew or didn’t know; what it should have known; failure to monitor size and frequency of opioid orders, misrepresentation in marketing about the addictive nature of opioids; and false financial disclosures.

Opioid manufacturers, distributors and large drugstore chains together represent a $13 billion-a-year industry, meaning the stakes are high, and the pockets deep. Many have compared these lawsuits to the tobacco suits of the ’90s.

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But even that comparison may pale. As difficult as it is to quit smoking, that process is less arduous than the excruciating and often impossible-to-overcome opioid addiction.

Francis Collins, a physician-geneticist who heads the National Institutes of Health, said in a recorded session with the Washington Post: “One really needs to understand the diabolical way that this particular set of compounds rewires the brain in order to appreciate how those who become addicted really are in a circumstance where they can no more [by their own free will] get rid of the addiction than they can get free of needing to eat or drink.”

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk.” — Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

The addiction creates an absolutely compelling drive that will cause people to do things against any measure of good judgment, said Collins, but the need to do them is “overwhelming.”

Documented knowledge of that chemistry could be devastating to insureds.

“It’s about what big pharma knew — or should have known.  A key allegation is that opioids were aggressively marketed as the clear answer or miracle cure for pain,” said Shep Tapasak, managing principal, Integro Insurance Brokers.

These cases, Tapasak said, have the potential to be severe. “This type of litigation boils down to a “profits over people” strategy, which historically has resonated with juries.”

Broadening Liability

As suits progress, all sides will be waiting and watching to see what case law stems from them. In the meantime, insurance watchers are predicting that the scope of these suits will broaden to include other players in the supply chain including manufacturers, distribution services, retail pharmacies, hospitals, physician practices, clinics, clinical laboratories and marketing agencies.

Litigation is, to some extent, about who can pay. In these cases, there are several places along the distribution chain where plaintiffs will seek relief.

Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

Nancy Bewlay, XL Catlin’s global chief underwriting officer for casualty, said that insurers and their insureds need to pay close attention to this trend.

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk,” she said.

“We, as insurers who identify emerging risks, have to communicate to clients. We like to be on the forefront and, if we can, positively influence the outcome for our clients in terms of getting ahead of their risks.”

In addition to all aspects of the distribution chain, plaintiffs could launch suits against directors and officers based on allegations that they are ultimately responsible for what the company knew or should have known, or that they misrepresented their products or signed off on misleading financial statements.

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Shareholders, too, could take aim at directors and officers for loss of profits or misleading statements related to litigation.

Civil litigation could pave the way, in some specific instances, for criminal charges. Mississippi Attorney General Jim Hood, who in 2015 became the first state attorney general to file suit against a prescription drug maker, has been quoted as saying that if evidence in civil suits points to criminal behavior, he won’t hesitate to file those charges as well.

Governing, a publication for municipalities and states, quoted Hood in late 2017 as saying, “If we get into those emails, and executives are in the chain knowing what they’ve unleashed on the American public, I’m going to kick it over to a criminal lawsuit. I’ve been to too many funerals.”

Insurers and insureds can act now to get ahead of this rising wave of liability.

It may be appropriate to conduct a review of policy underwriting and pricing. XL Catlin’s Bewlay said, “We are not writing as if everyone is a pharma manufacturer. Our perception of what is happening is that everyone is being held accountable as if they are the manufacturer.

“The reality is that when insurers look at the pharma industry and each part of the supply chain, including the pharma companies, those in the chain of distribution, transportation, sales, marketing and retail, there are different considerations and different liabilities for each. This could change the underwriting and affect pricing.”

Bewlay also suggests focusing on communications between claims teams and underwriters and keeping a strong line of communication open with insureds, too.

“We are here to partner with insureds, and we talk to them and advise them about this crisis. We encourage them to talk about it with their risk managers.”

Tapasak from Integro encourages insureds to educate themselves and be a part of the solution. “The laws are evolving,” he said. “Make absolutely certain you know your respective state laws. It’s not enough to know about the crisis, you must know the trends. Be part of the solution and get as much education as possible.

“Most states have ASHRM chapters that are helping their members to stay current on both passed and pending legislation. Health care facilities and providers want to do the right thing and get educated. And at the same time, there will likely be an uptick in frivolous claims, so it’s important to defend the claims that are defensible.”

Social Service Risk

In addition to supply chain concerns, insurers and insureds are concerned that even those whose mission it is to help could be at risk.

Hailed as a lifesaver, and approved by the Food and Drug Administration (FDA), the drug Naloxone, can be administered to someone who is overdosing on opioids.  Naloxone prevents overdose by blocking opioid receptor sites and reversing the effects of the overdose.

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Some industry experts are concerned that police and emergency responders could incur liability after administering Naloxone.

But according to the U.S. Department of Justice, “From a legal standpoint, it would be extremely difficult to win a lawsuit against an officer who administers Naloxone in good faith and in the course of employment. … Such immunity applies to … other professional responders.”

Especially hard hit are foster care agencies, both by increased child placements and stretched budgets. More details in our related coverage.

While the number of suits is growing and their aim broadening, experts think that some good will come of the litigation. Settlements will fund services for the addicted and opioid risk awareness is higher than ever. &

Mercedes Ott is managing editor of Risk & Insurance. She can be reached at [email protected]