Chubb product offers protection
By Phil Zinkewicz
Very soon, the Christmas season will be upon us and so too will the all-too-delightfully familiar plethora of Christmas films and cartoons--"Miracle on 34th Street," "The Bishop's Wife," "Santa Claus Is Coming To Town," etc. One film, which is probably the most familiar, is "A Christmas Carol," based on a novella by Charles Dickens. But this film is not all colored lights and decorations. Rather, it depicts, very accurately, a Victorian London of poverty, disease and child abuse. At one point, a very young and cynical Ebenezer Scrooge tells his coworker, Jacob Marley: "I think the world is becoming a very hard and cruel place, Mr. Marley. One must steel oneself to survive it."
A harsh sentiment indeed, perhaps too harsh. But it is one that is sometimes echoed by all of us, in one way or another, during drastically changing times. And, we are currently living in drastically changing times.
Greg Bangs is not a pessimist by any means and he certainly does not believe that the world is becoming a hard and cruel place, but he does recognize that the world is changing, not always for the better. Bangs is the crime, kidnap & ransom and workplace violence product manager for Chubb Group and, unfortunately, he has seen all those areas of potential loss increase in recent years.
"Historically, people thought of kidnap and ransom (K&R) insurance as just that--insurance in case a corporate executive is kidnapped and someone wants money. But it has become much more than that," says Bangs. "Today, K&R can refer to threats of arson and extortion--exposures they should have under their K&R policies, but often do not. And, now, K&R exposures are going hand-to-hand with terrorist exposures. Terrorists around the world and in the United States have come to realize that they can apply a 'war tax,' meaning that they can extort monies from large corporations by kidnapping someone or threatening some kind of physical harm to property for a percentage of the company's annual earnings. Colombia used to be the area of the world most known for kidnappings, but now Mexico is moving up and coming closer, except in Mexico it is not related to terrorism, but rather pure criminal enterprises. Kidnappers there are making a pretty good living at it. Indonesia and other parts of Asia are becoming troublesome, and so are the Philippines and Thailand. In some countries, there is the possibility of wrongful detention. This occurs when corrupt government officials detain a corporate executive on some trumped-up charge and demand payment from the executive's employer in order to obtain the employee's release."
For these reasons, Bangs maintains that corporate risk managers should become more aware of these particular exposures. But there's more. It isn't only the violence of kidnappers and terrorists that corporations have to worry about these days, but workplace violence in general, says Bangs.
Simply stated, workplace violence is violence or the threat of violence against workers. According to the Occupational Safety and Health Administration (OSHA), it can occur at or outside the workplace and can range from verbal abuse to physical assaults and homicide, one of the leading causes of job-related deaths. OSHA maintains that, however it manifests itself, workplace violence is a growing concern for employers and employees nationwide.
"Some two million American workers are victims of workplace violence each year," according to OSHA. "Workplace violence can strike anywhere, and no one is immune," says the federal agency. "Some workers, however, are at increased risk. Among them are workers who exchange money with the public; deliver passengers, goods or services; or work alone or in small groups, during late night or early morning hours in high-crime areas or in community settings and homes where they have extensive contact with the public. This group includes health care and social service workers such as visiting nurses, psychiatric evaluators, and probation officers; community workers such as gas and water utility employees, phone and cable TV installers and letter carriers; retail workers; and taxi drivers."
Of course, the news media don't really cover the less dramatic incidents of workplace violence--the verbal assaults or the threats. But homicides and multiple shootings do make the metro sections of the dailies and the ten o'clock news.
In 2000, the Bureau of Labor Statistics published its "Census of Fatal Occupational Injuries (CFOI)," which found that, in 1998, there were 709 work-related homicides. That was a decline of 18% from the 860 in the previous year. At the same time, the Federal Bureau of Investigation reported that the crime rate had declined more than 6% in 1998 from 1997. However, the Bureau of Justice Statistics reported that a majority of Americans felt that crime had gone up over the same period. There is an inconsistency here, to be sure. Many statisticians believe that the negative feelings on the part of Americans back in 1998 were due to media hype of the more dramatic instances of workplace violence. But what about today?
Bangs says: "It's true that the media do play a role in bringing the more dramatic examples of workplace violence to the forefront of people's thinking. But that doesn't mean that the problem is not a serious one or that it is not growing. Back in the 1990s, we did see a falling off of violence in the workplace, particularly homicides. But, today, we believe that workplace violence is on the rise once more. OSHA has reported that nearly 20 workers are murdered at their place of work every week. Workplace violence incidents can devastate a company, destroying its bottom line and threatening its survival. At special risk are companies that deal with the public, exchange money, deliver goods and services, work with unstable or volatile persons, or operate late at night."
"Historically, people thought of kidnap and ransom (K&R) insurance as just that--insurance in case a corporate executive is kidnapped and someone wants money ... Today, K&R can refer to threats of arson and extortion, exposures they should have under their K&R policies, but often do not."
-- Greg Bangs, Chubb Group
Chubb's insurance program for this exposure is called "ForeFront Workplace Violence Expense Insurance," and it is a broad expense coverage for workplace violence events. The package offers expense protection for any act or threat of deadly force involving the use or display of a lethal weapon occurring on work premises, which could or does result in bodily injury or death to an insured person.
"Recovery from a workplace violence event can be difficult, but the shorter the company's road back to normalcy, the better," says Bangs. "Our program insures reasonable expenses associated with recovery, including fees and expenses for an independent security consultant for 90 days; employee counseling seminars conducted by an independent consultant; independent security guard services for 15 days; an independent forensic analyst; victims' employee salaries and replacement employees' salaries for 90 days; rewards paid to informants who provide information leading to the arrest and conviction of responsible parties; medical, cosmetic, psychiatric and dental expenses of victims; rest and rehabilitation for injured persons or their relatives for up to 30 days and other reasonable expenses," says Bangs.
In addition, the program provides for expense coverage for stalking threats--expenses associated with a stalking threat from a person who demonstrates an intent to harm an employee of an insured organization and who is the subject of a temporary restraining order or injunction that is intended to protect the employee, as long as the employee notifies the employer about the restraining order prior to the stalking threat.
In the event that a business is forced to close down for a period of time as the result of a workplace violence incident, Chubb provides business interruption insurance, and there is a death benefit of $25,000 provided under the coverage for each victim who dies.
Moreover, in the event of a violent workplace incident, the package provides for the services of The Ackerman Group, Inc., a crisis management team to help the business cope.
Bangs maintains that the increase in workplace violence might be the result of the current poor economy. "A worker is terminated from his or her job and that person just snaps. Or, that person might be having difficulties at home--a single parent who has to get the kids off to school before coming to work, or a person who is taking care of elderly parents. Perhaps there are problems with a spouse. The pressure could build and, again, the person could snap.
"The idea is for the employer to look for patterns of behavior," says Bangs. "If a worker who has been a steady employee for a period of some years suddenly begins arriving late or appears to be in a disgruntled mood, more often than not that could be a sign that the worker is under severe pressure. We recommend to our insureds that they establish Employee Assistance Programs (EAPs) to deal with these types of situations. Talk to the employee whose behavior has changed. Try to ascertain the reasons why and try to help."
OSHA offers its own risk management techniques to reduce workplace violence.
"The employer should establish
a workplace violence prevention program or incorporate the information into an existing accident prevention program handbook or manual of standard operating procedures," says OSHA. "It is critical to ensure that all employees know the policy and understand that all claims of workplace violence will be investigated and remedied promptly."
In addition, OSHA offers the following advice:
* Provide safety education for employees so they know what conduct is not acceptable, what to do if they witness or are subjected to workplace violence, and how to protect themselves.
* Secure the workplace. Where appropriate to the business, install video surveillance, extra lighting and alarm systems and minimize access by outsiders through identification badges, electronic keys and guards.
* Provide drop safes to limit the amount of cash on hand. Keep a minimal amount of cash in registers during evenings and late-night hours.
* Equip field staff with cellular phones and hand-held alarms or noise devices, and require them to prepare a daily work plan and keep a contact person informed of their location throughout the day. Keep employer-provided vehicles properly maintained.
* Instruct employees not to enter any location where they feel unsafe. Introduce a "buddy system" or provide an escort service or police assistance in potentially dangerous situations or at night.
* Develop policies and procedures covering visits by home health care providers. Address the conduct of home visits, the presence of others in the home during visits, and the worker's right to refuse to provide services in a clearly hazardous situation.
In addition, employers should encourage employees to report and log all incidents and threats of workplace violence, report violent incidents to the local police promptly, inform victims of their legal right to prosecute perpetrators, offer stress debriefing sessions and post-traumatic counseling services to help workers recover from a violent incident.
Bangs maintains that no business is completely safe from the possibility of workplace violence and that no business is completely immune from kidnap and ransom exposures. As for terrorism risks, September 11 demonstrated clearly that even the smallest of businesses can be dramatically affected by such an event. *
For more information:
The Chubb Group's Forefront Portfolio
Contact: Lisa McGee
Phone: (908) 903-3301
Web site: http://csi.chubb.com/products/forefront-overview.asp