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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

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]