Why OSHA Might Start to Level More Scrutiny on Work-From-Home

As more and more people work from home, expect OSHA and other regulators to zero in on home working conditions.

By: John Hintze | August 12, 2020

Employees appear to be content working from home during the pandemic and a significant majority want to continue doing so when normalcy returns. However, risks have emerged that employers and their insurance providers should take steps to mitigate to reduce future costs and potential encounters with regulators.

A full 74% of the 1,202 respondents to a survey conducted by insurer Chubb between May 26 and June 4 said they want to spend more time working from home when the pandemic subsides.

“That has long-term implications for businesses in terms of restructuring their workforces,” said Sean Ringstead, chief risk and digital officer at Chubb.

“There are also long-term implications from some of the risks the survey uncovered.”

Emphasis on Tech Performance

Ringstead noted the emphasis placed on technology to make remote work possible. “But what really comes out of the survey is the resilience and dedication of people seeking to make this work, and striking a balance between work and home life,” he said.

James D’Errico, regional risk control leader, Gallagher

On the technology front, Chubb notes that cyber security experts, including its own, have pointed out the elevated risk from cyber attacks with so many working remotely.

The survey found that 3% of respondents had experienced cyber attacks, unsurprisingly, since 83% acknowledged using their personal email or personal devices to conduct business, and 88% use personal printers — less safe than company-provided technology with secure access to corporate servers.

Wealthy respondents, defined as earning $500,000 or more annually, reported even more cyber troubles, with one in 10 saying they were the victim of an attack.”

The pandemic sent 25% or more of the U.S. workforce to work from home with little warning, often to kitchen tables or other impromptu working settings without the proper equipment. The technology issues can be addressed relatively quickly, but the impact on employees themselves may take longer to deal with.

More Comfort = More Productivity?

On the plus side, Ringstead, said, most employees have shown significant resilience and dedication, with seven in 10 workers saying their productivity is equal to or greater in a work-from-home environment. Wealthy and younger respondents reported the highest levels of productivity.

However, 37% said they’re working longer hours, and for 17% that’s more than 10 extra hours a week. Without an ergonomically appropriate work setting at home, even working regular hours can take its toll on employees physically. In fact, the survey found two in five respondents said they feel new or increased pain in their shoulders, back and/or wrists.

Younger workers were much more likely than older workers to experience this pain and discomfort, the survey notes, with half of those between 20 and 35 reporting such pain, and 28% of those between 56 and 65.

The physical impact is “to be expected, because people are going from an environment in the workplace where they have controls in place for proper seating, to working from home where they’re at the mercy of whatever equipment they have at their disposal,” said James D’Errico, regional risk control leader for Gallagher.

“I believe OSHA will be looking at work-at-home environments even more going ahead, especially based on what has happened in the last five months.” — James D’Errico, regional risk control leader for Gallagher

D’Errico said it’s a common misperception that employers should not get involved in employees’ lives outside the office, and employees may also guard their privacy. In the current situation, however, the home workspace becomes an extension of the office, “So it’s the duty of the employer to make sure workstations are properly adjusted to the employee and in a safe area.”

One common issue is that employees are working on laptops with smaller monitors that require users to look down, and that can lead to discomfort and long-term pain. D’Errico said Chubb provides a checklist of important work-from-home considerations, but an ergonomist providing advice from photos of each employee’s home workspace may be beneficial.

As parents often tell their children, “Sit up straight.” A chair with proper back support is vital, and D’Errico notes that legs should be a right angles to the person’s torso, with elbows also bent at right angles. Placing a laptop on a box so the user looks straight at the screen instead of down is one solution, as is using a wireless keyboard so arms can rest in a neutral position—in ergonomic terms.

Without addressing the ergonomic issue, D’Errico said, a main concern is that employees may be working in an uncomfortable and potentially painful environment. That leads to more frequent unscheduled breaks and less productivity, and potentially also long-term injury.

In turn that can result in more insurance claims and higher insurance premiums, and potentially even regulatory violations.

D’Errico said that the Occupational Safety and Health Administration (OSHA) does not have a formal ergonomic standard. However, it can cite organizations under the general duty clause, where employers are responsible for creating a safe work place regardless of its location — this may lead to additional violations.

“I believe OSHA will be looking at work-at-home environments even more going ahead, especially based on what has happened in the last five months,” D’Errico said.

“There have never been so many people working from home, and I believe this will lead to heightened awareness by OSHA.”

Shift in Communication

Emily Brainerd, regional vice president, wellbeing and engagement practice leader in Gallagher’s benefits and HR consulting division, noted that in addition to the physical change, working from home during the pandemic requires monitoring employees’ mental health.

An employees’ financial wellbeing — perhaps a spouse lost his/ or her job — and work-life balance can add to stress, and managers must be trained to think differently about how to interact with remote employees.

“Most managers have no idea how to manage remotely, and there are definitely differences in how you communicate,” Brainerd said.

“Now there’s a need for empathy and flexibility regarding how and when people work. There also must be a focus on managers, so they themselves are supported in terms of their emotional wellbeing and how they support employees in this environment.”

Brainerd noted that employee assistance programs (EAPs) still tend to hold a stigma and tend to be underutilized, but they can be useful in the current environment.

“They can provide support for those struggling with stress or mental-health conditions, and depending on which one a company has they may provide concierge-type services to help with things like parenting,” Brainerd said. &

John Hintze is a freelance writer who can be reached 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.