Workplace Stress

Stress Linked to Workers’ Comp Claims

A study concludes that stress at work increases the likelihood of worker injury.
By: | November 4, 2016 • 4 min read

Reducing employee stress levels could help organizations reduce workers’ compensation claims, according to a new study from the Center for Health, Work & Environment at the Colorado School of Public Health.

Advertisement




The study, which analyzed claims occurrence and cost from nearly 17,000 employees at 314 organizations of various sizes across multiple industries, found that stress at work increased the likelihood of workers getting injured, while the source of stress was found to influence claims cost.

“Stress at work is predictive of workplace accidents — if you want to prevent workers’ comp claims, you need to look at causes of stress in the work environment,” said Dr. Natalie Schwatka, lead author of the report, entitled “Health Risk Factors as Predictors of Workers’ Compensation Claim Occurrence and Cost.”

Dr. Natalie Schwatka, instructor and researcher, Colorado School of Public Health

Dr. Natalie Schwatka, instructor and researcher, Colorado School of Public Health

The U.S. Bureau of Labor Statistics data suggests the frequency of occupational injuries and illnesses is gradually declining in line with improving health and safety measures, but the cost per workers’ compensation claim is rising. Overall, workers’ compensation claims cost employers around $250 billion annually.

In 2013, more than three million non-fatal workplace injuries and more than 4,000 fatal injuries occurred. Of the non-fatal injuries, around one-third resulted in lost work time, with an average absence of eight days.

“With the exception of PTSD (post-traumatic stress disorder) among first responders, stress is not covered under a workers’ comp policy, but stress can manifest itself as a physical claim that would fall under workers’ comp,” said Karen Curran, director of worksite wellness for Colorado WC insurer Pinnacol Assurance.

“There are a number of health risk factors that are predictive of frequency and severity of industrial injuries, but when that data is modified to take into account demographics and work environments, stress keeps rising to the top,” she said.

“Businesses these days have robust safety programs but the next step is to introduce worksite wellness programs to tie safety and wellness together.”

According to Schwatka, the majority of claims analyzed in the study concerned injuries such as strains, sprains, lacerations and contusions. While several health risk factors — such as obesity and smoking — were commonly found among claimants, stress was the only factor to display a consistent relationship with claims occurrence and cost when researchers factored in demographics and workplace variables such as employment type, occupation, income and company size.

“The first thing you have to do as an employer is take the taboo out of the workplace. Depression is a clinical diagnosis, not a character flaw.” — Karen Curran, Karen Curran, director of worksite wellness, Pinnacol Assurance

One notable finding was that claims made by workers experiencing stress at home were typically more expensive, while those made by workers perceiving stress over their finances were less costly.

Schwatka said it appears workers who don’t get enough support at home struggle more with recovery than workers who worry about financial risk and thus get back to work as soon as they can.

Holistic Approach to Work Safety

The study called for organizations to implement a “total worker health” approach, including heightened focus on mental well-being, which may reduce both the occurrence and cost of workplace injuries.

Karen Curran, director of worksite wellness, Pinnacol Assurance

Karen Curran, director of worksite wellness, Pinnacol Assurance

“Our findings strengthen the argument that businesses should address stress management as part of their safety programs and also focus on the systemic factors in their business that may cause stress, such as poor leadership, poor social support, lack of control over work demands and lack of work/life balance,” said Schwatka.

“If you are an employer with limited resources, there are simple things that can be done to help employees identify and manage stress,” said Curran.

Measures organizations could take to reduce workplace stress include flexible working hours and the inclusion of dedicated breaks for deep breathing or meditation during the working day to help keep workers minds’ “in the present,” she said.

Schwatka added that companies should also consider incorporating stress management into return-to-work programs.

Advertisement




However, Curran noted, many male-driven industries still struggle to overcome cultural stigma associated with mental health issues.

“Industries with high suicide rates such as construction, and oil and gas are also the ones that have the hardest time wrapping their arms around workplace stress, which is seen as a touchy-feely subject,” she said.

“The first thing you have to do as an employer is take the taboo out of the workplace. Depression is a clinical diagnosis, not a character flaw. Leaders have to acknowledge it is OK to talk about stress.” &

Antony Ireland is a London-based financial journalist. 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.

Advertisement




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.”

Advertisement




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.

Advertisement




“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]