RISKMANAGEMENT 2015 Commercial Lines Edition III
On the Front Lines - Responding When You Have a Claim Ivy Kitzinger, Claims Manager
Rick Hudak, 6HQLRU )LHOG &ODLPV $GMXVWHU
When we talk about risk management, our best option is to do what we can to prevent losses from happening. We carry insurance, or transfer risk, to protect us if our prevention efforts are not successful, and for times when a loss is completely out of our hands.
:RUNLQJ DV D PXOWL OLQH DGMXVWHU VLQFH 5LFN KDV VHHQ HYerything from fender benders to large property claims and liability lawsuits.
Part of the insurance contract involves Pharmacists Mutual responding when a claim occurs and helping our members get the business running, repaired and cleaned up. We would like you WR PHHW WKUHH RI RXU ÀHOG DGMXVWHUV ZKR VHUYH RQ WKH IURQW OLQHV responding when claims occur. Lindsey Blancarte, Senior Field Claims $GMXVWHU Lindsey has a strong family tradition in the insurance industry. Between her parents, who both retired as property DQG DXWR ÀHOG DGMXVWHUV DQG /LQGVH\ the family experience spans 35 years. With 17 years of her own property claims experience in both catastrophe and daily claims situations, Lindsey has a passion for interacting with customers face to face and providing solutions to help them recover after they suffer a loss.
Hailing from Boulder, Colorado where he attended Western State Colorado University, earning a BA LQ &OLQLFDO 3V\FKRORJ\ 5LFN DQG his wife Joy currently live in Grand Junction, Colorado with their 12 year old daughter Kate. If you are into mountain biking, back packing, white water raftLQJ DQG EOXHJUDVV MDPV \RX PLJKW HQFRXQWHU 5LFN ZKHQ \RX YLVLW &RORUDGR 5LFN VD\V KH VWUXJJOHV with the guitar and mandolin. (Sounds a lot better than struggles WR XV 5LFN DOVR EULQJV KLV ORYH RI the outdoors as a volunteer tutor IRU 5(& NLGV FRP DQ DIWHU VFKRRO SURJUDP Continued On Next Page
Jeremy Korn, )LHOG &ODLPV $GMXVWHU -HUHP\ JRW KLV ÀUVW WDVWH RI construction during summer break from the University of St. Thomas in Minneapolis. After graduation, he gained his understanding of best building practices and the importance of strong customer service while employed with a masonry contractor in Minneapolis – St. Paul for 9 years. Shifting to LQGHSHQGHQW DGMXVWLQJ LQ Jeremy completed the Building Inspection Technology program at Inver Hills Community &ROOHJH DQG MRLQHG 3KDUPDFLVWV 0XWXDO LQ ZKHUH KH FRYHUV the upper Midwest.
1 On the Front Lines - Responding When You Have a Claim 2 Alarm Systems: A Better Mousetrap 3 Focus on Home Medical Equipment Operations: Keeping Employees Safe on Home Visits 4 Five Data Breach Liability Myths! 5 Proactive Narcotic Abuse Screening 6 Ask Risk Management Please share this newsletter when you are finished.
RISK MANAGEMENT • &RQVLGHU DGGLQJ VHZHU EDFN XS GUDLQ RYHUà RZ FRYHUage to your policy. Standard insurance policies may not provide coverage, and when a loss of this kind happens, GDPDJH FDQ EH VLJQLÀFDQW
6RPH XVHIXO KLQWV IURP RXU ÀHOG DGMXVWHUV • Take the time to regularly inspect your property or have a TXDOLÀHG FRQWUDFWRU GR VR .HHSLQJ XS ZLWK UHFRPPHQGed repairs can go a long way in preventing you from suffering the disruption of a loss. • Once the roof on your building reaches 5 years old, have it inspected every year by a local contractor whether or not there are any problems with leaking. These annual inspections will help identify common weatherproofLQJ SUREOHPV WKDW RFFXU ZLWK PRVW FRPPHUFLDO URRÀQJ from loose or deteriorated seams or deteriorated sealant DURXQG URRÀQJ SURWUXVLRQV • Keep copies of any maintenance and repair invoices on ÀOH IRU WKH OLIH RI WKH URRI ,Q WKH HYHQW RI D FODLP WKHVH UHcords provide evidence that the property has been well maintained.
• Once a loss is discovered, take photographs immediately to preserve the conditions surrounding the loss. • If you haven’t done so in a while, review your insurance FRYHUDJHV ZLWK \RXU 3KDUPDFLVWV 0XWXDO )LHOG 5HSUHVHQtative. Ask if there are any increases in coverage or endorsements that would better protect you. To learn what you can do to mitigate losses or minimize the cost of a claim should one occur, please visit us at www.phmic.com, or contact us at risk.mgmt@phmic.com.
Alarm Systems: A Better Mousetrap Michael L. Warren, ARM, OHST, Risk Manager When protecting property against theft, an alarm can be your best friend or your worst enemy. Working correctly, the alarm summons police, limits the time the criminal has on site, and if the police respond quickly, potentially results in an arrest. We know that when there is no alarm, when criminals defeat the alarm or when police do not respond, that the crooks have all the time in the world to shop, sweep shelves, destroy safes and security cabinets and generally wreak havoc.
sponding, assigning initial investigation to private VHFXULW\ ÀUPV ,Q PRVW DUHDV RI WKH FRXQWU\ SROLFH will still try to respond, but the priority assigned to a QRQ YHULÀHG DODUP LV RIWHQ JLYHQ ORZ SULRULW\
Video Camera
• When police response takes more than 5 minutes, the average cost of burglary claims doubles.* • According to the National Association of Police Chiefs, false alarm rates across the country are over 90%. The net effect is that while police will still reVSRQG UHVSRQVH WR DQ XQYHULĂ€HG DODUP PD\ PRYH to the bottom of the priority list. • In 2/3 of pharmacy crimes over $100,000, the alarm failed or was defeated by the criminal.* *Source: “Pharmacy Crime: A look at pharmacy burglary and robbery in the United States and the strategies and tactics needed to manage the problemâ€? – Pharmacists Mutual, 2015
You can even the odds in your favor by getting the most out of your alarm system by: • Connecting to a reliable central station alarm company • Having sensors professionally placed to avoid blind spots • Protecting it against disabling by the criminal • Controlling alarm codes • 5HJXODU WHVWLQJ But what happens if the police don’t come? According to the National Sheriffs Association, over 90% of all burglar alarms are false. In some cities, police have stopped re-
Pharmacists Mutual has been looking for a solution that can provide all the desired features of a good alarm system and can also give the poOLFH YHULĂ€FDWLRQ WKDW D FULPH LV LQ SURJUHVV :RUNLQJ FORVHO\ ZLWK 9LGHRĂ€HG DQG ,9HULI\ ZH IRXQG WKH right combination. Motion detectors, when activated, send a video feed to IVerify. When they contact the police, law enforcement will know for certain that a crime is in progress because they can see it. When police JHW YHULĂ€FDWLRQ WKH SULority they assign the call improves as does their response time.
The package available to members includes a control panel, keypad with badge reader, power adaptor, motion viewers with cameras, and monitoring. IVerify arranges installation and provides state of the art monitoring. Multiple central station locations provide redundant back-up. At less than $1,000 for the installation and $25 a month for monitoring, the system is available for a price below that of traditional alarm systems. Even if you have an existing contract in place, the additional level of protection may be worth the investment for the added layer of protection. To learn more about the system, contact either PharmaFLVWV 0XWXDO 5LVN 0DQDJHPHQW DW riskmgmt@phmic.com for an informational brochure that includes frequently asked questions, pricing and what is included in the package, or FRQWDFW 9LGHRĂ€HG ,YHULI\ GLUHFWO\ DW mlueck@iverify.us or 0LNH /XHFN FDQ SURYLGH LQIRUPDWLRQ DQVZHU any technical questions and place your order.
RISK MANAGEMENT
Focus on Home Medical Equipment Operations: Keeping Employees Safe on Home Visits: Part 2 – Leaving the Vehicle; Entering the Home Dave Stachowiak, Regulatory & Facility Compliance Coordinator, Home Care Medical, New Berlin, WI
Avoid stairwells in apartment buildings by using an elevator. Elevator safety:
Keeping employees safe, healthy and productive is important to the survival and success of any organization. One of the biggest concerns is when employees are on the road providing services, delivering product and meeting clients. In the second of a three part series, Dave shares best practices used in his organization when leaving the vehicle and HQWHULQJ WKH FOLHQW·V KRPH ² 3K0,& 5LVN 0DQDJHPHQW
• Look into an elevator before entering and wait for another one if you feel someone inside looks suspicious. • Once inside the elevator, stand near the controls. • Get off if someone suspicious enters. If you are attacked on the elevator, press the alarm and as PDQ\ ÁRRU EXWWRQV DV possible.
Leaving Your Vehicle
Never enter a home uninvited.
Lock your car.
While in the Client’s Home
Have safety items such as pepper spray or a screech alarm readily accessible. If possible, carry your cellular telephone LQWR WKH KRPH &DUU\ D ÁDVKOLJKW IRU SRRUO\ OLW FRUULGRUV DQG hallways.
Avoid any lengthy or emotional conversations with the family or neighbors of the client. Know your way out of a client’s home.
Be alert and observant of your surroundings as you leave your vehicle and enter a patient’s home. • Walk as if you know where you are and where you are going. You want to look calm and FRQÀGHQW
Know steps to take if someone in the home becomes agitated: • Try to remain calm and allow the person to express his or her feelings. • Listen carefully and show empathy.
• Stand tall, walk purposefully, and make quick eye contact with people around you.
• 5HVSRQG E\ XVLQJ RQO\ QRQ WKUHDWHQLQJ words.
• Do not look distracted.
• Keep the person one to two arms length away and position yourself near the exit.
Avoid conversation with strangers. • Do not challenge or confront an individual or a group of individuals. • Do not use hand gestures that may be mistaken for gang signals. If possible, walk against WKH ÁRZ RI WUDIÀF Avoid walking in dark, deserted areas. • Be aware of potential hiding places such as wooded areas, between parked vehicles, behind dumpsters or at construction sites. • Do not cut through secluded alleys or vacant lots. • Walk in the center of the sidewalk, away from buildings, and parked cars. Never walk through a crowd. If a group of people is blocking the sidewalk, walk around them or cross the street. Do not search for a patient by knocking on strange doors or ringing other doorbells. Never enter a building that looks abandoned. Be extra cautious in houses or apartments with open doors, no curtains or boarded-up windows.
• If the situation escalates, either get out, have someone call the police or get help from the nearest possible source. If you see guns or weapons in the home, insist that the patient or caregiver remove them from the room for the duration of the visit. If the client or caregiver refuses to comply, leave the home. If drug dealing is occurring during your visit, ask that it wait until the visit is complete. If the persons do not comply, tell them you will return at a later date to complete the visit. If the home situation feels unsafe for any reason, trust your instincts. Calmly inform the client that you will come back at a later time. Leave the area. If you feel that your safety, or the safety of anyone in the home is threatened, call 9-1-1 for police assistance. In all of these situations, it is critical that you notify your supervisor as soon as possible.
RISK MANAGEMENT
Five Data Breach Liability Myths! E.T. (Tom) Paulsen, CITRMS Our guest author is a member of WKH UDUH EUHHG RI &HUWLĂ€HG ,GHQWLW\ 7KHIW 5LVN 0DQDJHPHQW 6SHFLDOLVWV &,7506 LQ WKH FRXQWU\ &,7506 SURIHVVLRQDOV DUH GHGLcated to providing education and assistance to businesses in combating the epidemic of identity theft. With over forty years of OHDGHUVKLS H[SHULHQFH LQFOXGLQJ VXSHUYLVLQJ ,62 FHUWLĂ€FDtions and audit processes and managing compliance, Tom brings a true appreciation of the time-consuming effort needed to develop written documentation and integrate procedures into business operations. Tom shares some of the common myths about a key source of identity theft, data breach.
The IT department will keep our business secure. Cyber thieves are avoiding secure networks to take advantage of human behavior e.g., Anthem’s data breach was caused by human behavior, as employees clicked on an email phishing attempt. Target’s data breach was linked to an HVAC contractor. $ 1HW'LOLJHQFH FODLPV VWXG\1 shows that only 29% of claims are associated with hacking, 32% with insiders and 20% with third-party vendors. According to PwC, employees and corporate partners are responsible for 60% of data EUHDFKHV 9HUL]RQ VXJJHVWV WKH QXPEHU LV DOPRVW 2 Employees and corporate partners/vendors have been LGHQWLÀHG DV WKH ZHDNHVW OLQN $UH \RX XQGHU YDOXLQJ HPployee training and vendor’s security practices?
Small businesses are not the target of data thieves. Over 70% of security breaches are targeted to small businesses.3 Verizon’s 2011 study determined that 72% of data breaches were at companies with fewer than 100 employees.
A data breach will be a minor issue – We will deal with it when it happens.
months, according to a 2013 Experian Data Breach Study and other national sources.5 A 2015 cost of data breach study shows new record highs. $FFRUGLQJ WR WKH EHQFKPDUN ÀQGLQJV GDWD EUHDFKHV FRVW companies an average of $217 per compromised record. $ERXW SHUWDLQV WR LQGLUHFW FRVWV ZKLFK LQFOXGH DEQRUPDO WXUQRYHU RU FXVWRPHU FKXUQ DQG UHSUHVHQWV WKH direct costs incurred to resolve the data breach such as investments in technologies or legal fees.6 Another article says the direct costs of a data breach inFOXGH SHU QRWLÀFDWLRQ SHU YLFWLP7; $10 - $30 per year per victim for credit or identity monitoring7; and $12 $22 per replacement credit card.7 Other direct costs could include forensic examination, call center, public relations, OHJDO GHIHQVH ÀQHV DQG SHQDOWLHV $ VPDOO 'HQYHU SKDUPDF\ ZDV UHFHQWO\ ÀQHG IRU the improper disposal of 1,610 patient records. The City Newsstand in Chicago was out $22,000 because of a payment card breach.9 Hackers transferred $63,000 out of the bank account of Green Ford Sales of Abilene, KS.10 A Ponemon Institute study determined that 31% of customHUV ZKR ZHUH QRWLÀHG RI WKH EUHDFK ZRXOG WHUPLQDWH WKHLU relationship.11 How many of the remaining 69% of customers will take their business elsewhere because they lost trust and FRQÀGHQFH LQ WKH RUJDQL]DWLRQ" 'DWD EUHDFK UHODWHG FRVWV including the loss of customers, can be fatal to a business.
Existing insurance will cover my business. Most existing general liability policies have been amended to add a data breach exclusion. Business owners need Cyber Liability insurance coverage and they need to be aware RI SROLF\ H[FOXVLRQV WR PD[LPL]H SROLF\ EHQHÀWV 5HIHUHQFH WKH SROLF\ H[FOXVLRQ ´)DLOXUH WR )ROORZ 0LQLPXP 5HTXLUHG Practices� lawsuit12 entitled Columbia Casualty Company Y &RWWDJH +HDOWK 6\VWHP ÀOHG RQ 0D\ $GGUHVV your security practices before you purchase insurance.
The healthcare industry is only subject to HIPAA-HITECK. Ask your attorney to investigate which laws apply if employHH RU SDWLHQW 3HUVRQDO ,GHQWLĂ€DEOH ,QIRUPDWLRQ 3,, LV ORVW 'R VWDWH EUHDFK QRWLĂ€FDWLRQ ODZV DSSO\ WR WKH KHDOWKFDUH industry?
If a small business experienced a data breach today, there is a 60% chance that it will be out of business in less than 6
A listing of technical sources cited above are available from the author. Tom has written an excellent article that helps to clarify control needs in context with what the small business owner needs to know. To obtain a copy of “FTC Publication Protecting Personal Information – A Guide for Business� check out Tom’s website at www.tompaulsen.com, or visit www.phmic.com, Risk Management Hot Topics. To contact the author directly, you can reach him through his website or by calling 815.229.2555. As always, members can reach us at Pharmacists Mutual Risk Management at riskmgmt@phmic.com for assistance in managing any of your risk management needs.
RISK MANAGEMENT
Proactive Narcotic Abuse Screening Edward R. King, Pharmacy Student Intern
• ,V WKH SDWLHQW ÀOOLQJ WKLV SUHVFULSWLRQ WKURXJK LQVXUance?
Case: An independent pharmacy Ă€OOLQJ KLJK GRVHV RI QDUFRWLF &16 depressants for a middle-aged man receives notice of a claim. The patient was found unresponsive by his wife, and pronounced dead at the scene. Toxicology reports indicate supratherapeutic concentrations of hydrocodone, oxycodone, and alprazolam. Additionally, multiple tablets of OxycontinÂŽ are found in the patient’s stomach upon autopsy. Looking through the patient’s record, it is noted that the patient paid cash on multiple RFFDVLRQV IRU HDUO\ Ă€OOV RI WKH VDPH PHGLFDWLRQV 7KH SKDUPDF\ FODLPV WKH SDWLHQW¡V UHDVRQ IRU WKH HDUO\ Ă€OOV LQFOXGHV ‘vacation-supply’ and ‘lost-supply’. The prescriptions were written by a variety of physicians in different practices, and QR HIIRUW ZDV PDGH WR FRQĂ€UP WKHLU NQRZOHGJH RI WKH RWKer’s care. Additionally, records revealed prescriptions were DOVR Ă€OOHG DW RWKHU SKDUPDFLHV LQ WKH DUHD
• If a patient’s medication history is available, is there only one physician/practice prescribing controlled substances for this patient?
Result: 7KH ÀOOLQJ SKDUPDFLVW ZDV IRXQG OLDEOH UHVXOWLQJ LQ over $200,000 paid out in liability and litigation fees. The Centers for Disease Control and Prevention (CDC) has declared prescription drug abuse an epidemic, with prescription opioid overdose deaths outnumbering heroin and cocaine overdose deaths combined1. In 2011, 16,917 drug poisoning deaths involved an opioid analgesic, which has more than quadrupled from 19992. According to the NationDO 6XUYH\ RQ 'UXJ 8VH DQG +HDOWK RYHU PLOOLRQ LQGLYLGXDOV aged 12 or older used prescription drugs nonmedically in the past 12 months3. The increased incidence of prescription drug abuse and related overdose is both alarming and actionable. Healthcare providers are the gatekeepers of patient access to prescription drugs. When a patient’s addiction takes hold, those gatekeepers must intervene. Community pharmacists are optimally positioned to ensure the appropriate use of controlled substances. When a patient presents to the pharmacy with a prescription for a controlled substance, the following questions should be addressed: • +DV WKH SDWLHQW ÀOOHG KHUH EHfore? • Does it logistically make sense IRU WKH SDWLHQW WR EH ÀOOLQJ their medication here? (i.e. How far away is their home address and/or doctor’s ofÀFH IURP WKH SKDUPDF\"
• ,V WKLV SUHVFULSWLRQ EHLQJ Ă€OOHG RQ WKH GDWH RI RU DIWHU WKH Ă€OO GDWH RQ WKH VFULSW" Answering ‘no’ to any one of the above questions warrants further investigation into the prescription’s legitimacy. Prescription Drug Monitoring Programs (PDMPs) are an excellent resource that should be utilized to ensure appropriate GUXJ WKHUDS\ &XUUHQWO\ RI VWDWHV DOO H[FHSW 0LVVRXUL have PDMPs, while some are not fully operational. Further information regarding the PDMP in your state can be found on the National Association of State Controlled Substance Authorities’ website (KWWS ZZZ QDVFVD RUJ VWDWHSURĂ€OHV htm). Checking the PDMP, contacting the prescribing physician(s), and determining the drug’s indication are pruGHQW ZD\V WR PLWLJDWH WKH ULVN RI Ă€OOLQJ D SUHVFULSWLRQ ZKLFK may be potentially abused. Any information regarding the appropriateness of therapy should always be documented. Prescription drug abuse is a public health problem that deserves special attention. Instating proactive measures to ensure appropriate drug therapy in regards to controlled substances is of utmost importance given the breadth of the problem. This will in turn reduce potential claims of liability and improve your pharmacy practice. Most importantly, it will further enable pharmacists to advocate for their most vulnerable patients. For more information, reference sources are available on request. If you need to contact Eddy King, please let us know at risk.mgmt@phmic.com.
PRSRT STD U.S. Postage PAID Ames, IA Permit No. 307
PO Box 370 Algona IA 50511-0370
Your Risk Management Newsletter – This issue – Alarm Systems: A Better Mousetrap
Ask Risk Management 5LVN 0DQDJHPHQW IUHTXHQWO\ Ă€HOGV TXHVWLRQV IURP FXVWRPers sent in by e-mail or called in on a variety of topics related to risks they are either concerned or curious about. Here are some recent questions and our responses: Q: “A suggestion has been made that we go to a 5 minutes RU OHVV SROLF\ IRU Ă€OOLQJ FXVWRPHU SUHVFULSWLRQV $UH WKHUH DQ\ concerns from a risk management standpoint?â€? A: Being responsive to customer service issues is important, but not as important as avoiding a wrong drug or wrong strength error, something more likely to happen when the VWDII LV EXV\ RU UXVKLQJ WR Ă€OO SUHVFULSWLRQV &RQVLGHU WKDW WKH best customer service you can provide is to ensure the right drug in the right dosage. Take the time to have a pharmaFLVW GR D Ă€QDO FKHFN Q: â€?I rent space in a retail strip mall and a custom car shop opened next door. They sell custom auto parts in the retail area, but it looks like they are setting up to do body work in the back area. I’m not sure the landlord knows, and I don’t want to get involved, but should I be concerned?â€? A: Spray painting, welding and related activities pose a po-
Pharmacists Mutual Companies: Pharmacists Mutual Insurance Company Pharmacists Life Insurance Company PMC Advantage Insurance Services, Inc.
For information on reprints, please contact shelly.brown@phmic.com. Š 2015 Pharmacists Mutual Insurance Company
WHQWLDO WKUHDW RI Ă€UH WR RWKHU RFFXSDQWV RI WKH PDOO 7KHVH NLQGV RI RSHUDWLRQV UHTXLUH VSHFLDO Ă€UH SURWHFWLRQ DQG YHQWLlation. Because of the nature of these operations, they are typically not allowed in retail areas. If you have not done so, please contact your landlord. If you would like our assistance, please let us know. Q: “I would like to start a prescription delivery service for my customers and employ part time drivers. Would they be covered under their own insurance if they cause an accident?â€? A: They may or may not be covered. Under some insurance arrangements, the insurer will allow business use, but it is imSRUWDQW WR FKHFN Ă€UVW ,I WKH\ GULYH DQG WKHLU LQVXUHU GRHV QRW provide coverage, your business could be held liable. If you have a risk management question contact us at risk.mgmt@phmic.com. Spotlight on Crime: Closed Door Pharmacy Loss Exceeds $350,000 article that appeared on page 3 of the Commercial Lines Edition II was erroneously attributed to -HIIUH\ +HGJHV DV WKH DXWKRU 7KH DXWKRU VKRXOG KDYH EHHQ 0LFKDHO / :DUUHQ $50 2+67 5LVN 0DQDJHU 3OHDVH FRQWDFW ULVNPJPW#SKPLF FRP ZLWK DQ\ TXHVWLRQV
For questions about the newsletter or risk management riskmgmt@phmic.com. For inquiries about advertising opportunities - advertising@phmic.com. DISCLAIMER: The content of this publication is only for the informational use of the reader. Information contained herein is not intended as, nor does it constitute, legal or professional advice, nor is it an endorsement of any source cited or information provided.