In a time of ever-growing risk, there is one key tool every construction project should have in its toolbelt to persevere: a focus on resiliency.
Resiliency has become more than a buzzword for the industry as risks continue to abound across several areas. In recent months, the coronavirus pandemic has compounded risk for the construction industry, but factors such as climate change, employee safety, technology adoption, and more also continue to add pressure.
“Contractors must have an eye toward resiliency in order to maintain productivity while also mitigating risk,” said Ben Beauvais, construction executive, field distribution, Liberty Mutual Insurance.
“By understanding the different challenges that a construction site and the entire industry face, contractors can better adapt to disruptions and keep their projects and budgets on track.”
Here are three ways the construction industry can work toward that vital resiliency.
Worker safety continues to be a large part of construction risk management, as investing in and engaging with employees helps drive overall business performance.
“To help protect employees and maintain productivity, having comprehensive programs that address on-site safety and return to work after an injury are critical,” Beauvais noted.
But managing and mitigating physical injury is just one piece of employee safety; taking a holistic view that considers professional and personal factors that may affect an employee’s well-being is becoming increasingly more relevant to building resiliency.
“Challenges such as opioid misuse and mental health issues have affected the construction industry well before the pandemic. But now, with more financial strain and fewer available resources, employees are being affected more acutely,” Beauvais explained. “By taking a proactive interest in an employee’s well-being on and off the job site, construction risk managers can help build more high-performing and resilient teams.”
One way to prioritize that holistic approach and better engage employees is through an employee assistance program (EAP).
“For many of our customers, opioid misuse and mental health issues among the workforce continue to be pain points,” Beauvais said.
“We wanted to find a way to ease this burden, support employees and help our customers optimize performance, even during such a chaotic time. That’s why we formed a new partnership to offer EAP solutions to support employees beyond just the physical recovery from a workplace injury.”
While a lot of small and midsize privately-owned construction companies are somewhat less likely to have an employee assistance plan, “we find that, for those that do put a high importance on worker well-being, they have a better outcome of employee engagement,” Beauvais said. “We also view it as preventive in a lot of ways, helping mitigate future, and often more costly, risks.”
In addition to investing in their people, contractors and owners should consider the lasting impact the local environment can have on new building projects. As construction companies create the buildings of tomorrow, they’re increasingly seeking ways to mitigate their future risk.
“By fully examining the environment — like soil conditions, the slope of the land or the location on a potential flood plain — and the risks they could present for a project, contractors can create more resilient buildings that better withstand severe weather and other natural catastrophes,” Beauvais said.
Having this understanding is especially important in the real estate development world, where construction projects of all types and sizes occur in different geographies. And leveraging technology plays a key role in building resiliency and being prepared for the future.
“From drones to building information modeling, technology in construction is constantly evolving,” said Beauvais. “These advancements have opened the door for contractors to collect and utilize data to better address environmental risks.”
An example of how Liberty Mutual is helping to enhance resiliency and accelerate understanding of climate risk for its construction customers is through its partnership with Jupiter Intelligence, a leading provider of predictive data and analytics for climate risk.
“The partnership allows us to better meet the complex risk management needs of our construction clients by understanding how to successfully identify, mitigate, and manage climate-related hazards with new insurance solutions,” Beauvais explained.
Contractors and business owners can also leverage this information to understand implications for current and future operations.
“We’re excited about how our work with Jupiter Intelligence can help our customers build resiliency into the construction process right from the start,” he said.
Business and risk are changing more quickly than ever before — and construction companies are evolving their operations as a result. While making the right decisions can be invaluable, making the wrong ones can create operational and financial challenges that make it difficult to compete.
Taking a data-driven approach to decision making, one that considers current performance compared to peers and best practices, is also critical to building resiliency.
“Construction contractors and owners want to know how their performance stacks up against competitors,” Beauvais said. “They also want to know that the efforts they are putting in are meeting the best practices out there.”
To help clients make the best decisions possible, especially during uncertain times, Liberty Mutual offers consulting services and benchmark reporting to its surety customers.
“Our surety team has a tremendous amount of experience assessing financial metrics for construction companies and extensive access to valuable industry information,” Beauvais added. “The reports analyze factors like liquidity, leverage, profitability, cash flow, efficiency and backlog ratios to help clients address gaps and maintain competitive advantage relative to their peers.
“This information can be a real game changer for companies looking to grow or adjust their operations,” he continued. “These capabilities are helping contractors and owners adopt best practices, make improvements, and know where they stand within the industry so they can maintain an advantage as they bid and build.”
With customized reporting and insights, surety customers can better assess what is working and where areas of opportunity exist, keeping them informed and positioning them for resiliency.
What makes resilient risk management so vital is its inherent ability to help a business bounce back after an incident. This is something the Liberty team proactively helps its customers achieve.
“Our goal is to bring new capabilities and partnerships together to assist customers in tackling their toughest challenges so they can move forward,” said Beauvais.
Liberty knows that when it comes to maintaining a resilient risk management strategy for construction businesses, partnering with a team that has deep understanding of the construction industry and a proven track record of identifying the right solutions is critical.
“Understanding the risks that are present on the insurance side and having an eye toward resiliency enable us to understand, anticipate and execute as we help clients build their infrastructure,” Beauvais said.
“By listening to our customers and developing solutions to respond to their needs — whether that’s through data, technology or risk management products — they can more confidently prepare for whatever lies ahead.”
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.
Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.
Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.
Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.
But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.
First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.
Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.
Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.
Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.
“Sounds dreadful,” she said to herself.
Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.
It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.
She felt like she was suffocating.
One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.
Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.
Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.
Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.
“So can you tell me what’s going on?” she said.
Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.
“It’s just… It’s just…” she managed to stammer.
The doctor waited patiently. “It’s okay,” she said. “Just take your time.”
Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”
More tears streamed down her face.
Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.
“Okay,” Elizabeth said, some semblance of relief passing through her.
Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.
As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.
Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.
#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.
Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.
By noon of the following day, her well-connected father unleashed the dogs of war.
Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.
“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.
“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”
“Great. Thanks, kid,” Rand said.
“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.
It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.
Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?
He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.
He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.
Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.
In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:
Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.
The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.
Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.
Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.
The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.
Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.
That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.
“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.
There was a long silence from the underwriters at the other end of the phone.
“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.
Rand just sat silently and waited for another shoe to drop.
“Well, what can you do?” the broker said, with hope draining from his voice.
The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.
Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.
Medwell’s relationships with the insurance markets looked like it almost never would. &
Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.
The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?
Risk Management Considerations:
The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:
Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.
A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.
This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.
This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.