How Insurance Leaders Are Addressing Mental Health Concerns Among Construction Workers

Aspen Insurance is taking interest in the wellbeing of construction workers, especially given the mental health challenges they face.

By: Alex Wright | February 23, 2024

Construction worker mental health has become a big issue in recent months. That is evidenced by the fact that almost 60% of workers have suffered from a mental health issue during their career.

More tragically, the suicide rate in construction is among the highest of any industry. More than five times as many construction workers are lost to suicide every year as opposed to on-site accidents. In fact, in the U.S., it’s one of the top 10 leading causes of death.

Suicide rates are highest among young males. Given that the construction industry is dominated by this demographic, this statistic should come as no real surprise.

While suicide is the worst-case scenario, there are a host of other conditions that employees suffer due to poor mental health, such as depression and anxiety. The knock-on effect can also be long-term disability and higher unemployment rates. More immediately, it can affect their decision-making and ability to recognize hazards at work.

Recognizing the Problem

Sadly, while traditional industry loss control and safety focuses almost exclusively on protecting workers from physical harm, mental health and wellness are often overlooked. If the problem is left unchecked, it has the potential to spiral out of control and make working conditions and employee safety far worse.

That’s why it’s paramount for companies to recognize the issue and make it more of a priority. That means investing in and developing a joined-up, holistic strategy focused on education and raising awareness of the problem that helps not only employees suffering from poor mental health but also those around them who can identify when something is wrong and get help for them.

“Mental health and wellbeing have always been an issue within the construction industry,” said Ryan Cushway, head of UK casualty at Aspen.

“However, the recent increase in awareness, knowledge and understanding of the topic has really shone a spotlight on the issue and raised awareness of the problems that the industry faces.”

Poor Working Conditions and Job Fears

Cushway said factors contributing to the rise in mental health problems include working conditions, working hours and job security.
Tough working conditions — including working underground or at height, in cold weather and other factors — have been prominent in the deterioration of workers’ mental health. Working longer hours, including weekends, particularly on larger projects, has also put a greater strain on them.

Most employees, particularly manual workers, are also self-employed labor-only subcontractors, meaning that work is often uncertain, resulting in worries about job security.

Ryan Cushway, head of UK casualty, Aspen

Their plight isn’t helped by the economic uncertainty facing many construction firms, which have been hit harder than many sectors by rising costs. The cost and availability of materials, the cost of fuel/energy, wage inflation and the availability of skilled and experienced workers are all eating into the profit margins of businesses. This is reflected in the number of construction companies, both large and small, going into administration over the past 12 to 18 months.

Cushway said: “As such, completing jobs on time and receiving payment for that work becomes even more paramount for a business to meet their own bills, including their people’s wages. However, this results in the factors listed above intensifying further — working days become longer, conditions tougher and a further reduction in job security.”

Addressing the Issue

There are practical steps that employers can take to address the problem of mental health.

A key one is to raise awareness about the issue, thus helping to reduce the stigma surrounding mental health and wellbeing. This in turn will encourage workers to speak up and seek help when needed.

Insurance can also play a vital role in tackling the issue. Cushway said the insurance sector is fortunate to be provided with a large amount of support, education and advice surrounding mental health and wellbeing.

Therefore, it makes sense, he said, to share some of those experiences and learnings with industries such as construction, where mental wellbeing resources aren’t so readily available.

“Given that Aspen offers a UK employers’ liability insurance product which is, by its very nature, centered around the people working for our clients, we believe that providing additional support to people working in the construction industry is a natural fit for our business,” said Cushway.

The Aspen Solution

Cushway shared how his company is taking steps toward improved construction worker mental wellbeing.

Aspen’s new Construction Wellbeing product has three key components: awareness, prevention and support. The first part is about raising awareness of mental wellbeing, what it is and how to recognize it, both in yourself and others, and it’s critical to improving mental wellbeing. It’s designed with multiple e-learning modules for both employees and managers, raising awareness by improving understanding and knowledge of the subject.

In terms of prevention, the program provides 24-hour confidential counseling services for employees and their immediate family members, for those that require mental wellbeing support.

As far as support is concerned, the product provides post-incident support through both physical and mental rehabilitation programs, including for PTSD. This is available for both the person directly involved and those indirectly affected by the incident, such as employees who have witnessed an incident.

Mental health remains a big problem for the construction industry, but by adopting a sensible long-term strategy to tackle the issue and leverage insurance products and educational material, firms can make a big difference to their employees’ wellbeing. &

Alex Wright is a UK-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected].

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

By: Risk & Insurance | April 3, 2024

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

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