Sponsored: Liberty Mutual Insurance

Treating Injuries without Employer Pain: Managing the Challenges of Opioids and Marijuana

Liberty Mutual's claims management framework can help businesses tackle challenges as they come, including medical marijuana.
By: | July 27, 2017 • 5 min read

Most employees have peace of mind that while a workplace injury may cause pain or disrupt their lives, they’ll be treated as quickly and effectively as possible through their employers’ workers’ compensation programs. Employees also know that they’ll have treatment options that best fit their conditions and medical needs. Two potential treatments, however, present unique challenges for employers: opioids and medical marijuana.

Updated medical guidelines, new laws, and cultural shifts have driven the rise of these two classes of drugs as potential forms of treatment in workers’ compensation cases. While opioids and medical marijuana are in very different stages as treatment methods, complications exist that could put employees and businesses at risk if not managed effectively. Their potential impacts mean employers need to have a forward-thinking claims framework in place to help keep employees safe and minimize risk.

The Rise of Opioids in Workers’ Comp

Doctors and nurses must ask patients to rate their pain on a scale of one to 10, and treat it accordingly. That subjectivity, in part, has given rise to the over-prescription of opioids. “Historically, opioids were used appropriately to alleviate pain associated with cancer and similar severe pain conditions. Over time, physicians prescribed opioids for far less severe pain conditions. The resulting rise in availability has also contributed to the current epidemic in the United States,” said Maureen McCarthy, SVP and Manager, Workers’ Comp Field Claims, Liberty Mutual Insurance.

The Centers for Disease Control and Prevention (CDC) estimate that nearly half of all U.S. opioid overdose deaths involve prescription opioids – in 2015, there were 15,000 prescription-related opioid deaths1.

Its impact is also being felt in the workers’ comp space. Seventy percent of injured workers take some form of an opioid painkiller – and workers’ comp claims involving opioids cost, on average, $20,000 more than claims without2.

A Flexible Framework for Evolving Claims

Opioids aren’t the only change impacting workers’ comp; emerging treatments like medical marijuana are also on the rise. Liberty Mutual Insurance built a flexible claims management framework to address evolving treatment methods.

The framework’s foundation is in Liberty Mutual’s deep industry knowledge and engagement with experts and institutions. For example, when the CDC was drafting national guidelines to help doctors prescribe opioids appropriately, Liberty Mutual’s regional medical directors provided feedback during the comment period.

“There were two things in the initial draft that were concerning to us. One was the lack of emphasis on functionality. If opioids are not helping patients achieve functional improvement in their day -to-day lives, the risk of continuing or increasing dosages might outweigh the benefits,” said Dr. Craig Ross, Regional Medical Director, Liberty Mutual. “We were also concerned about the combination of opioids with benzodiazepines, which significantly increases the risk of overdose.”

“Both of these issues were addressed in the final guidelines, and we were able to quickly incorporate these guidelines into our claims framework to help mitigate opioid misuse and abuse,” stated Dr. Ross.

A Data-Driven Approach to Flagging Risk

Liberty Mutual also focuses on early intervention and communication. Identifying high-risk claims early on is key to protecting employees from opioid dependence. The company’s analytics team uses a data-driven approach to flag these cases. Often, the psychosocial factors of a claim provide good indicators of whether an injured worker is at increased risk for drug dependence.

In addition, the company’s pharmacy benefit management partner helps provide a complete view of an employee’s opioid use by monitoring overall dosage. Liberty Mutual can also track physician prescription patterns and identify those who may be prescribing too early or frequently.

Conversations from the Start

“If an injured worker is prescribed an opioid, the claims handler receives a system alert to review the prescription,” McCarthy said. “The next step is to reach out to the treating physician and to connect with one of our nurses or regional medical directors for a strategy consult.”

“We train our claims handlers to ask questions,” Dr. Ross said. “If the prescription doesn’t adhere to the CDC guidelines, why not? Is it improving functionality? If not, can we explore some alternative treatment options?”

Relaying that information and guidance to an injured worker is delicate and nuanced. Every patient’s case, personality, and disposition is different. It’s important to make complex medical information simple. Because Liberty Mutual equips its claims handlers with strong client relations skills, they are able to explain to patients why their prescriptions may not be appropriate for them.

Applying the Claims Framework to Medical Marijuana

The Liberty Mutual claims management framework – evidence-based treatment, proactively identifying high-risk cases, engaging providers and patients early and often– can be applied to any emerging risk, including medical marijuana.

While not yet common in workers’ comp cases, medical marijuana is likely to gain popularity as more states pass laws that legalize use.

“There is little evidence that medical marijuana is an effective treatment for workplace injuries,” Dr. Ross said.

Liberty Mutual’s claims team carefully monitors the legal and regulatory environment in each state. “As part of our approach, if an injured worker asks to be reimbursed, we hold a roundtable discussion with the claims team, legal team, and a regional medical director to determine if it’s the most appropriate path,” Dr. Ross said.

The top concern for employers is that medical marijuana will impede a worker’s ability to do his or her job, potentially resulting in injury to themselves or to coworkers, or property damage.

“We work with employers on a case-by-case basis to determine the exposure and work within the confines of their workplace safety programs and policies,” McCarthy said.

While the use of medical marijuana is still in its infancy in workers’ comp, Liberty Mutual’s problem-solving framework helps businesses tackle changes as they come, always pursuing the best outcomes for injured workers.

To learn more, visit libertymutualgroup.com/workerscomp.

1 https://www.cdc.gov/drugoverdose/data/overdose.html
2 http://helioscomp.com/insights/influence/opioids



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.



Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty and workers compensation.

More from Risk & Insurance

More from Risk & Insurance

Risk Focus: Cyber

Expanding Cyber BI

Cyber business interruption insurance is a thriving market, but growth carries the threat of a mega-loss. 
By: | March 5, 2018 • 7 min read

Lingering hopes that large-scale cyber attack might be a once-in-a-lifetime event were dashed last year. The four-day WannaCry ransomware strike in May across 150 countries targeted more than 300,000 computers running Microsoft Windows. A month later, NotPetya hit multinationals ranging from Danish shipping firm Maersk to pharmaceutical giant Merck.


Maersk’s chairman, Jim Hagemann Snabe, revealed at this year’s Davos summit that NotPetya shut down most of the group’s network. While it was replacing 45,000 PCs and 4,000 servers, freight transactions had to be completed manually. The combined cost of business interruption and rebuilding the system was up to $300 million.

Merck’s CFO Robert Davis told investors that its NotPetya bill included $135 million in lost sales plus $175 million in additional costs. Fellow victims FedEx and French construction group Saint Gobain reported similar financial hits from lost business and clean-up costs.

The fast-expanding world of cryptocurrencies is also increasingly targeted. Echoes of the 2014 hack that triggered the collapse of Bitcoin exchange Mt. Gox emerged this January when Japanese cryptocurrency exchange Coincheck pledged to repay customers $500 million stolen by hackers in a cyber heist.

The size and scope of last summer’s attacks accelerated discussions on both sides of the Atlantic, between risk managers and brokers seeking more comprehensive cyber business interruption insurance products.

It also recently persuaded Pool Re, the UK’s terrorism reinsurance pool set up 25 years ago after bomb attacks in London’s financial quarter, to announce that from April its cover will extend to include material damage and direct BI resulting from acts of terrorism using a cyber trigger.

“The threat from a cyber attack is evident, and businesses have become increasingly concerned about the extensive repercussions these types of attacks could have on them,” said Pool Re’s chief, Julian Enoizi. “This was a clear gap in our coverage which left businesses potentially exposed.”

Shifting Focus

Development of cyber BI insurance to date reveals something of a transatlantic divide, said Hans Allnutt, head of cyber and data risk at international law firm DAC Beachcroft. The first U.S. mainstream cyber insurance products were a response to California’s data security and breach notification legislation in 2003.

Jimaan Sané, technology underwriter, Beazley

Of more recent vintage, Europe’s first cyber policies’ wordings initially reflected U.S. wordings, with the focus on data breaches. “So underwriters had to innovate and push hard on other areas of cyber cover, particularly BI and cyber crimes such as ransomware demands and distributed denial of service attacks,” said Allnut.

“Europe now has regulation coming up this May in the form of the General Data Protection Regulation across the EU, so the focus has essentially come full circle.”

Cyber insurance policies also provide a degree of cover for BI resulting from one of three main triggers, said Jimaan Sané, technology underwriter for specialist insurer Beazley. “First is the malicious-type trigger, where the system goes down or an outage results directly from a hack.

“Second is any incident involving negligence — the so-called ‘fat finger’ — where human or operational error causes a loss or there has been failure to upgrade or maintain the system. Third is any broader unplanned outage that hits either the company or anyone on which it relies, such as a service provider.”

The importance of cyber BI covering negligent acts in addition to phishing and social engineering attacks was underlined by last May’s IT meltdown suffered by airline BA.

This was triggered by a technician who switched off and then reconnected the power supply to BA’s data center, physically damaging servers and distribution panels.

Compensating delayed passengers cost the company around $80 million, although the bill fell short of the $461 million operational error loss suffered by Knight Capital in 2012, which pushed it close to bankruptcy and decimated its share price.

Mistaken Assumption

Awareness of potentially huge BI losses resulting from cyber attack was heightened by well-publicized hacks suffered by retailers such as Target and Home Depot in late 2013 and 2014, said Matt Kletzli, SVP and head of management liability at Victor O. Schinnerer & Company.


However, the incidents didn’t initially alarm smaller, less high-profile businesses, which assumed they wouldn’t be similarly targeted.

“But perpetrators employing bots and ransomware set out to expose any firms with weaknesses in their system,” he added.

“Suddenly, smaller firms found that even when they weren’t themselves targeted, many of those around them had fallen victim to attacks. Awareness started to lift, as the focus moved from large, headline-grabbing attacks to more everyday incidents.”

Publications such as the Director’s Handbook of Cyber-Risk Oversight, issued by the National Association of Corporate Directors and the Internet Security Alliance fixed the issue firmly on boardroom agendas.

“What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.” — Jimaan Sané, technology underwriter, Beazley

Reformed ex-hackers were recruited to offer board members their insights into the most vulnerable points across the company’s systems — in much the same way as forger-turned-security-expert Frank Abagnale Jr., subject of the Spielberg biopic “Catch Me If You Can.”

There also has been an increasing focus on systemic risk related to cyber attacks. Allnutt cites “Business Blackout,” a July 2015 study by Lloyd’s of London and the Cambridge University’s Centre for Risk Studies.

This detailed analysis of what could result from a major cyber attack on America’s power grid predicted a cost to the U.S. economy of hundreds of billions and claims to the insurance industry totalling upwards of $21.4 billion.

Lloyd’s described the scenario as both “technologically possible” and “improbable.” Three years on, however, it appears less fanciful.

In January, the head of the UK’s National Cyber Security Centre, Ciaran Martin, said the UK had been fortunate in so far averting a ‘category one’ attack. A C1 would shut down the financial services sector on which the country relies heavily and other vital infrastructure. It was a case of “when, not if” such an assault would be launched, he warned.

AI: Friend or Foe?

Despite daunting potential financial losses, pioneers of cyber BI insurance such as Beazley, Zurich, AIG and Chubb now see new competitors in the market. Capacity is growing steadily, said Allnutt.

“Not only is cyber insurance a new product, it also offers a new source of premium revenue so there is considerable appetite for taking it on,” he added. “However, whilst most insurers are comfortable with the liability aspects of cyber risk; not all insurers are covering loss of income.”

Matt Kletzli, SVP and head of management liability, Victor O. Schinnerer & Company

Kletzli added that available products include several well-written, broad cyber coverages that take into account all types of potential cyber attack and don’t attempt to limit cover by applying a narrow definition of BI loss.

“It’s a rapidly-evolving coverage — and needs to be — in order to keep up with changing circumstances,” he said.

The good news, according to a Fitch report, is that the cyber loss ratio has been reduced to 45 percent as more companies buy cover and the market continues to expand, bringing down the size of the average loss.

“The bad news is that at cyber events, talk is regularly turning to ‘what will be the Hurricane Katrina-type event’ for the cyber market?” said Kletzli.

“What’s worse is that with hurricane losses, underwriters know which regions are most at risk, whereas cyber is a global risk and insurers potentially face huge aggregation.”


Nor is the advent of robotics and artificial intelligence (AI) necessarily cause for optimism. As Allnutt noted, while AI can potentially be used to decode malware, by the same token sophisticated criminals can employ it to develop new malware and escalate the ‘computer versus computer’ battle.

“The trend towards greater automation of business means that we can expect more incidents involving loss of income,” said Sané. “What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.

“We’re likely to see a growing number of attacks where the aim is to cause disruption, rather than demand a ransom.

“The paradox of cyber BI is that the more sophisticated your organization and the more it embraces automation, the bigger the potential impact when an outage does occur. Those old-fashioned businesses still reliant on traditional processes generally aren’t affected as much and incur smaller losses.” &

Graham Buck is editor of gtnews.com. He can be reached at riskletters.com.