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The Profession

Brett Kirkham

Foster Farms’ director, corporate treasurer knows that risk managers need to graduate from a “necessary evil” to a true business partner in their companies.
By: | August 31, 2016 • 4 min read

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R&I: What was your first job?

I first started working in high school scanning accounts payable invoices and washing cars on the side. I consider my first career job to be when I graduated college as an internal auditor.

R&I: How did you come to work in risk management?

Just natural career progression. Parts of risk management have been a function of my positions throughout my career and even more integrated into my current position at Foster Farms.

R&I: What is the risk management community doing right?

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Using data to better understand and assess risk, which I think is making the overall process more efficient and cost effective.

R&I: What could the risk management community be doing a better job of?

I think we need to continue progressing as a value-added partner to the business and support for the C-suite. As an internal auditor for a large public company, we spent a lot of time improving our processes and procedures to show that we were a business partner and not a “necessary evil.” As risk managers, we can bring a lot to the table and are an important part of the business’ success and sustainability.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Expectation and flexibility. I think the expectation of risk management has continued to evolve and the role has continued to expand, especially as we continue to push for becoming a stronger business partner. I’ve also continued to see more flexibility with the insurance carriers in structuring programs to meet the individual needs of the business and key risks. There is more of a partnership between the carriers and the business in managing the risk and developing strong programs.

R&I: What emerging commercial risk most concerns you?

Right now, I am most concerned about increasing regulatory and social risk. The evolving USDA standards and requirements on food companies, along with the consumers’ expectations and how quickly they can influence new trends and social movements are both challenges for us.

“I like to question the processes, procedures and challenge the status quo, which has generated savings and overall improvements for the company.”

R&I: What insurance carrier do you have the highest opinion of?

That varies by line of coverage. Based on more recent changes, SwissRe and Zurich have been great partners for us and continue to hold lead positions on different programs when others were exiting the space. They both continue to participate in various programs and support our business.

R&I: How much business do you do direct versus going through a broker?

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We work 100 percent with a broker.

R&I: Is the contingent commission controversy overblown?

I think so. It seems a lot of controversy comes from the thought that brokers may not be making the best decision for policyholders when placing coverage in order to earn additional commission. But if the risk manager stays involved in the annual renewal process and is the ultimate decision-maker, I think the risk is minimized.

I generally require a marketing of our programs every year and review both pricing and coverage options, and instruct our broker where to place business. If that decision happens to earn the broker some additional commission from the volume, it doesn’t really cause concern for me.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I am optimistic for the longer term given the resiliency of the U.S. economy, but a little pessimistic for the shorter term. There are big decisions coming down the pipeline that are dividing the nation, and who knows how the markets and economy will react once the dust settles.

R&I: Who is your mentor and why?

Jana Owens, my first boss out of college. She really helped formulate my attitude toward business, developing relationships and setting goals to become better. We still keep in contact and have worked off and on together over the years.

R&I: What accomplishment are you proudest of?

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From a career standpoint, I’m happy that I have always been able to find ways to improve the areas I have been given responsibility over. I like to question the processes, procedures and challenge the status quo, which has generated savings and overall improvements for the company.

R&I: How many emails do you get in a day?

Generally over 100 emails. That number will quadruple when I take a vacation, because for some reason everything happens when you try and take a day off.

R&I: What’s the best restaurant you’ve ever eaten at?

There is a little place called Frisco Deli in Jackson, Miss., that has the best ribs. It was a surprise because there are a lot of sandwiches on the menu, hence deli in the name, but the ribs are amazing and it’s a must stop when I am in the area.

R&I: What do your friends and family think you do?

That’s a good question. They think I am always out having fun, so they have a lot to learn!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Focus: Workers' Comp

Do You Have Employees or Gig Workers?

The number of gig economy workers is growing in the U.S. But their classification as contractors leaves many without workers’ comp, unemployment protection or other benefits.
By: and | July 30, 2018 • 5 min read

A growing number of Americans earn their living in the gig economy without employer-provided benefits and protections such as workers’ compensation.

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With the proliferation of on-demand services powered by digital platforms, questions surrounding who does and does not actually work in the gig economy continue to vex stakeholders. Courts and legislators are being asked to decide what constitutes an employee and what constitutes an independent contractor, or gig worker.

The issues are how the worker is paid and who controls the work process, said Bobby Bollinger, a North Carolina attorney specializing in workers’ compensation law with a client roster in the trucking industry.

The common law test, he said, the same one the IRS uses, considers “whose tools and whose materials are used. Whether the employer is telling the worker how to do the job on a minute-to-minute basis. Whether the worker is paid by the hour or by the job. Whether he’s free to work for someone else.”

Legal challenges have occurred, starting with lawsuits against transportation network companies (TNCs) like Uber and Lyft. Several court cases in recent years have come down on the side of allowing such companies to continue classifying drivers as independent contractors.

Those decisions are significant for TNCs, because the gig model relies on the lower labor cost of independent contractors. Classification as an employee adds at least 30 percent to labor costs.

The issues lie with how a worker is paid and who controls the work process. — Bobby Bollinger, a North Carolina attorney

However, a March 2018 California Supreme Court ruling in a case involving delivery drivers for Dynamex went the other way. The Dynamex decision places heavy emphasis on whether the worker is performing a core function of the business.

Under the Dynamex court’s standard, an electrician called to fix a wiring problem at an Uber office would be considered a general contractor. But a driver providing rides to customers would be part of the company’s central mission and therefore an employee.

Despite the California ruling, a Philadelphia court a month later declined to follow suit, ruling that Uber’s limousine drivers are independent contractors, not employees. So a definitive answer remains elusive.

A Legislative Movement

Misclassification of workers as independent contractors introduces risks to both employers and workers, said Matt Zender, vice president, workers’ compensation product manager, AmTrust.

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered.”

Misclassifying workers opens a “Pandora’s box” for employers, said Richard R. Meneghello, partner, Fisher Phillips.

Issues include tax liabilities, claims for minimum wage and overtime violations, workers’ comp benefits, civil labor law rights and wrongful termination suits.

The motive for companies seeking the contractor definition is clear: They don’t have to pay for benefits, said Meneghello. “But from a legal perspective, it’s not so easy to turn the workforce into contractors.”

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered in the eyes of the state.” — Matt Zender, vice president, workers’ compensation product manager, AmTrust

It’s about to get easier, however. In 2016, Handy — which is being sued in five states for misclassification of workers — drafted a N.Y. bill to establish a program where gig-economy companies would pay 2.5 percent of workers’ income into individual health savings accounts, yet would classify them as independent contractors.

Unions and worker advocacy groups argue the program would rob workers of rights and protections. So Handy moved on to eight other states where it would be more likely to win.

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So far, the Handy bills have passed one house of the legislature in Georgia and Colorado; passed both houses in Iowa and Tennessee; and been signed into law in Kentucky, Utah and Indiana. A similar bill was also introduced in Alabama.

The bills’ language says all workers who find jobs through a website or mobile app are independent contractors, as long as the company running the digital platform does not control schedules, prohibit them from working elsewhere and meets other criteria. Two bills exclude transportation network companies such as Uber.

These laws could have far-reaching consequences. Traditional service companies will struggle to compete with start-ups paying minimal labor costs.

Opponents warn that the Handy bills are so broad that a service company need only launch an app for customers to contract services, and they’d be free to re-classify their employees as independent contractors — leaving workers without social security, health insurance or the protections of unemployment insurance or workers’ comp.

That could destabilize social safety nets as well as shrink available workers’ comp premiums.

A New Classification

Independent contractors need to buy their own insurance, including workers’ compensation. But many don’t, said Hart Brown, executive vice president, COO, Firestorm. They may not realize that in the case of an accident, their personal car and health insurance won’t engage, Brown said.

Matt Zender, vice president, workers’ compensation product manager, AmTrust

Workers’ compensation for gig workers can be hard to find. Some state-sponsored funds provide self-employed contractors’ coverage.  Policies can be expensive though in some high-risk occupations, such as roofing, said Bollinger.

The gig system, where a worker does several different jobs for several different companies, breaks down without portable benefits, said Brown. Portable benefits would follow workers from one workplace engagement to another.

What a portable benefits program would look like is unclear, he said, but some combination of employers, independent contractors and intermediaries (such as a digital platform business or staffing agency) would contribute to the program based on a percentage of each transaction.

There is movement toward portable benefits legislation. The Aspen Institute proposed portable benefits where companies contribute to workers’ benefits based on how much an employee works for them. Uber and SEI together proposed a portable benefits bill to the Washington State Legislature.

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Senator Mark Warner (D. VA) introduced the Portable Benefits for Independent Workers Pilot Program Act for the study of portable benefits, and Congresswoman Suzan DelBene (D. WA) introduced a House companion bill.

Meneghello is skeptical of portable benefits as a long-term solution. “They’re a good first step,” he said, “but they paper over the problem. We need a new category of workers.”

A portable benefits model would open opportunities for the growing Insurtech market. Brad Smith, CEO, Intuit, estimates the gig economy to be about 34 percent of the workforce in 2018, growing to 43 percent by 2020.

The insurance industry reinvented itself from a risk transfer mechanism to a risk management mechanism, Brown said, and now it’s reinventing itself again as risk educator to a new hybrid market. &

Susannah Levine writes about health care, education and technology. She can be reached at [email protected] Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]