Published by the Public Risk Management Association
www.primacentral.org
JULY 2011
Safety Officer Presumptions in Workers’ Compensation Claims Why it is Important to Understand the Dark Side of Leadership PRIMA Members Blaze the Trails of Risk in Portland Don’t Let Risk Take the Air Out of Your Inflatable Amusement Ride Events
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Volume 27, No. 6 | July 2011 | www.primacentral.org
The Public Risk Management Association promotes effective risk management in the public interest as an essential component of public administration.
Executive Director Mark Doherty
Contents
President Cindy B. Mallett, AIC, CWCP, ARM-P Risk Manager City of Gainesville Gainesville, GA Past President Laura Peterson, JD, MPA Director of Risk and Insurance University of Wyoming Laramie, WY
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11
6 SAFETY OFFICER PRESUMPTIONS IN WORKERS’ COMPENSATION CLAIMS
President-Elect Dan Hurley, CSP, ARM-P, MS Senior Director, Risk Management & Safety Norfolk Public Schools Norfolk, VA Directors Eddie Beecher Risk Manager City of Pompano Beach Pompano Beach, FL
By Norin Grancell and Diana J. Rich, ARM-P
Betty Coulter Risk Management Director City of Asheville Asheville, NC
11 Why it is Important to Understand the Dark Side of Leadership
Matt Hansen, MPA Director, Risk Management Division City & County of San Francisco San Francisco, CA
By Jann E. Freed
Dave Parker, ARM-P Risk Manager Pima County Sheriff’s Department Tucson, AZ
14 PRIMA Members Blaze the Trails of Risk in Portland
Marilyn Rivers, CPCU, ARM, AIC Director of Risk and Safety City of Saratoga Springs Saratoga Springs, NY
By Jennifer Ackerman, CAE
Regan Rychetsky Director, HHS Enterprise Risk Management and Safety Texas Health and Human Services Commission Austin, TX
16 Don’t Let Risk Take the Air Out of Your Inflatable Amusement Ride Events
Editor Jennifer Ackerman, CAE Senior Manager, Communications 703.253.1267 • jackerman@primacentral.org
By Dan Foster, ARM-P
Advertising Donna Stigler 888.814.0022 • donna@ahi-services.com
Public Risk (ISSN 0891-7183) is published 10 times per year by the Public Risk Management Association, 700 S. Washington St., #218, Alexandria, VA 22314 tel: 703.528.7701 • fax: 703.739.0200 email: info@primacentral.org • Web site: www.primacentral.org
16 In Every Issue 4 News Briefs | 19 Advertiser Index | 20 Member Spotlight
Opinions and ideas expressed are not necessarily representative of the policies of PRIMA. Subscription rate: $140 per year. Back issue copies for members available for $7 each ($13 each for non-PRIMA members). All back issues are subject to availability. Apply to the editor for permission to reprint any part of the magazine. Periodical postage paid at Alexandria, VA, and additional mailing offices. POSTMASTER: Send address changes to PRIMA, 700 S. Washington St., #218, Alexandria, VA 22314. Copyright 2011 Public Risk Management Association Reprints: Contact the Reprint Outsource at 717.394.7350.
July 2011 | Public Risk
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PRIMA 2011
Webinar Series Available FREE to PRIMA Members!* PRIMA members enjoy a wealth of benefits and PRIMA just added one more! Thanks to generous funding from Genesis Underwriting Management Company, the 2011 PRIMA Webinar Series is offered to PRIMA members at no charge!
Join us for the next Webinar of 2011: July 20 | 12 p.m. – 1:30 p.m. EST Volunteer Risk Management Presenter: Melanie Lockwood Herman Executive Director Nonprofit Risk Management Center Volunteer programs provide many critical services within public entities, especially in times of tight budgets and cuts. Volunteer work is no different from paid work as far as exposures are concerned, since the possibility of accident, injury, loss or damage is always present. When implementing a volunteer risk management program, it must fit well into day-to-day operations and have enough substance in order to constitute tangible proof of due diligence. This Webinar will review organizational practices for utilizing volunteers within your public entity while making sure they do not end up with a claim.
Se r ie s Sp o n s o r :
Visit www.primacentral.org for more information on PRIMA’s 2011 Webinars or to register. * PRIMA members receive one complimentary registration per Webinar.
Message from PRIMA President Cindy B. Mallett
Embracing the Leader Within
I
t’s inevitable, I suppose. Now that I have returned to the many distractions of my office, some details about PRIMA’s 32nd Annual Conference, held recently in Portland, Ore., are already fading from memory. One thing that I will never forget, however, is the impressive caliber of the hundreds of public risk management professionals, corporate sponsors and exhibitors who gathered for the event. Their collective experience and intellect created a first-class learning and networking environment. These individuals—like all of you reading this—are vital leaders in their respective entities and communities. Do you embrace the leader within? Many of us tend to shrug away the label of “leader,” feeling more comfortable out of the spotlight. The truth is, though, that risk managers are uniquely positioned to lead and influence others. Coworkers, elected officials and members of the community look to us for guidance, counsel and assistance. In addition, the work of public sector risk managers helps to protect people, assets and organizational reputation. Measuring and communicating these victories demonstrates leadership to our decision makers and will help secure the future of our profession. As risk management practitioners, I’m convinced that we should avoid the urge to reject ideas or veto programs just because they are unusual or complex. If “no” is our consistent response, we will be viewed as inflexible and as barriers to progress. Indira Gandhi once said, “I suppose leadership at one time meant muscle; but today it means getting along with people.” When possible, risk managers should act as partners, facilitating programs and making suggestions to manage the risks involved. With leadership, though, comes responsibility. You can read more about leadership gone awry on page 11 of this issue.
I am pleased to welcome new members to PRIMA’s leadership team. Regan Rychetsky of the Texas Health and Human Services Commission and Ed Beecher of the City of Pompano Beach, Fla., have joined PRIMA’s board of directors. In addition, Dan Hurley, Norfolk (Va.) Public Schools, has begun his term as president-elect. Each of these dedicated professionals and the entire board of directors will work to advance the knowledge and practice of public risk management and will make every effort to meet your needs as members. This summer has also ushered in new leadership at PRIMA’s Alexandria, Va., headquarters. I am delighted to welcome Mark Doherty as PRIMA’s new executive director. Mark has a wealth of association management experience and is excited about joining the PRIMA team. I’m certain that should you have an opportunity to meet Mark, you will find his experience and his ideas impressive. Under Mark’s leadership, the entire PRIMA staff will continue to work hard for you, our members. As I begin my term as PRIMA’s president, please know that I am honored and pleased to serve you. I invite you to contact me at any time with any concerns or suggestions. Please enjoy this issue and remember to embrace the leader within you!
As I begin my term as PRIMA’s president, please know that I am honored and pleased to serve you. I invite you to contact me at any time with any concerns or suggestions. Please enjoy this issue and remember to embrace the leader within you!
Sincerely,
Cindy B. Mallett 2011–2012 PRIMA President Risk Manager City of Gainesville, Ga.
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News Briefs
News
Briefs Senator Gillibrand Calls for Upgrade to Emergency Communications Systems With more than 2,300 police and fire departments across New York State that cannot all communicate with each other effectively during times of emergency, U.S. Senator Kirsten Gillibrand is calling on the House and Senate to pass legislation that would provide first responders and public safety officials with critical interoperable radio airwaves needed to effectively communicate in the event a major response is needed. According to WKTV.com, the 9/11 Commission Report identified insufficient interoperability among communications systems used by first responders during the attacks and rescue efforts. Senator Gillibrand is urging Congress to come together before the 10th anniversary of the 9/11 attacks and pass the Public Safety Spectrum and Wireless Innovation Act, legislation that would create a framework for the deployment of a nationwide, interoperable, wireless broadband network for public safety. “There is no higher priority than the security of our families and communities,” Senator Gillibrand said. “If we’re going to keep New Yorkers safe, all of our first responders must be able to communicate with each other in real time during emergencies. Nearly 10 years after the horror of 9/11, it’s time to bring our first-responder technology into the 21st century and free New York’s emergency personnel from federal bureaucracy to get the job done.”
Oakland, Calif., to Pay Medical Costs in Police Crash The city of Oakland, Calif., will pay $630,000 to a man who suffered a broken back in a crash with a police car, but city officials aren’t admitting liability in the case. The San Francisco Chronicle reports the city agreed to make the payment to cover the medical costs for Daniel Pena-Marquez after the August 2006 crash. Oakland city attorneys say the patrol car was responding to an emergency call when Pena-Marquez turned in front of it at an intersection. Pena-Marquez says the patrol car did not have its lights or sirens on. The two officers in the police car were hurt, with one officer receiving $190,000 in workers’ compensation benefits, while a second officer received $21,000. Oakland has sued Pena-Marquez to recover the benefits paid to the officers. One of the officers has also filed suit against Pena-Marquez. Those cases are pending.
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www.primacentral .org
Calendar of Events The Public Risk Management Association (PRIMA) hosts or sponsors a wide variety of educational programs for public risk practitioners. These meetings and events provide an optimum forum for public risk professionals to acquire new knowledge or skills, exchange ideas and expand peer networks.
To Stop Violence, Providence, R.I., Bars to Stagger Closings
PRIMA’s calendar of events is current at time of publication. For the most up-to-date schedule, visit www.primacentral.org.
Representatives of three large downtown Providence, R.I., dance clubs volunteered to experiment with staggered closing times. They would participate in a city government effort to reduce the chaos that sometimes occurs when they usher their patrons out to the sidewalk at the same time. They responded to a call for help from Public Safety Commissioner Steven M. Pare at an unusual City Hall meeting that brought together groups of people whose interests often conflict: proprietors of nightspots, residents, representatives of colleges and universities, real estate owners and other downtown stakeholders. Depending on the day of the week and the kind of license that a bar or nightclub holds, the nightspots must close by law at 1 a.m. or 2 a.m., and everyone inside must put down alcoholic drinks and leave. The mandatory closing times contribute to a sometimes-rowdy scene in which thousands of people appear on the streets and sidewalks in a brief time span, mostly on weekends. With a staggered-closing program, the nightspots would stay open a while longer, perhaps turn up the lights, and serve food and non-alcoholic beverages until their customers want to go.
Webinars 2011 July 20: FREE for Members! Managing Volunteer Risks October 19: FREE for Members! Risk Management Alphabet Soup November 16: FREE for Members! Winning Strategies for Contractual Risk Transfer
PRIMA Annual Conferences June 3–6, 2012 PRIMA 2012 Annual Conference Nashville, TN Opryland Hotel June 2–5, 2013 PRIMA 2013 Annual Conference Tampa, FL Tampa Convention Center June 8–11, 2014 PRIMA 2014 Annual Conference Long Beach, CA Long Beach Convention Center
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SAFETY OFFICER PRESUMPTIONS IN WORKERS’ COMPENSATION CLAIMS
By Norin Grancell and Diana J. Rich, ARM-P
In America, we love our heroes. We always have, and we always will. The rugged individualist. The trailblazing pioneer. The brave sheriff of the Old West. The volunteer fire brigade. The valiant men and women of September 11. Public service as a safety officer holds an irresistible appeal for many. However, it is not easy to qualify. It is not easy to achieve and maintain the physical fitness required. It is not easy to face the emotional roller coaster. It is not easy work. And our heroes get hurt. The specific, acute traumas occurring in the line of duty are easy to identify and manage. It is the insidious, cumulative traumas that pose unique challenges to risk managers.
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Public service as a safety officer holds an irresistible appeal for many. However, it is not easy to qualify. It is not easy to achieve and maintain the physical fitness required. It is not easy It probably seemed a good idea at the time to minimize the efforts of determining whether a given condition was workrelated, and instead establish causation through statute for specified injuries and illnesses. Arising out of good intentions, presumptions were intended to recognize the extraordinary rigors of police and fire work that contribute to various medical conditions. Unfortunately, medicine is not that precise. Are cancers, hypertension, heart disease or ventricular hypertrophy a natural result of the aging process, or do they arise out of employment? Presumptions are state-specific, and therefore highly political, with the result that political considerations affect the administration and adjudication of claims for safety officers more than any other classification. Safety officers also have the ear of politicians, which has resulted in a two-tiered system of benefits in at least 15 states. Unfortunately, as often happens with legislative actions arising from the best intentions, presumptions do not always operate as planned. It is the rare police or fire department that has not seen the liberal construction of workers’ compensation law extend benefits on claims of questionable merit. Risk managers are used to relying on a variety of sources for best practices. Unfortunately, the usual resources are not available when dealing with presumption claims because the scopes of presumptions vary so widely between the states. Typically one or more of the following conditions are covered: • • • • • • •
Cancers Cardiovascular, including hypertension and heart disease Pulmonary and respiratory Tuberculosis HIV and AIDS Hepatitis and other blood-borne diseases MRSA
Most presumption statutes incorporate eligibility requirements, typically related to length of service and time of manifestation. Presumptions are rebuttable or controvertible, such as for cancer, which requires causation to be from a known carcinogen. A few states disqualify users of tobacco products from eligibility for presumptions.
to face the emotional roller coaster. It is not easy work.
Risk managers for public agencies have a duty as stewards of public funds to pay workers’ compensation benefits only for work-related conditions. This means that all claims must be investigated to establish the diagnosis, that the condition falls under one of the applicable statutes, and that the prerequisites for the presumptions to apply do, in fact, exist. A medical-legal examination is necessary for a precise diagnosis, and the physician’s opinion on causation based on the prerequisites for the presumption to apply. In California, for example, the statute specifies that cancers must be caused by a “known carcinogen as defined by the International Agency for Research on Cancer, or as defined by the director.” Genetic or hereditary predisposition is not a defense, or a basis for apportionment of disability. Many doctors practicing workers’ compensation medicine are often not skilled in forensic medicine, and not well-qualified to render opinions on causation. Nevertheless, it is the risk manager’s duty to assure that all of the necessary information is provided to the medical evaluator who can then determine if the alleged injury is work-related. For example, in a heart presumption claim, the agency made certain that the information that a police officer contracted an infection on vacation is what weakened his heart. The examining physician was able to determine that the non-work-related infection, not the stress of the job, caused the officer’s disability. A full investigation is necessary and often beneficial. The alternate work schedules of most public safety departments (12 hour shifts for police, 24 hour shifts for firefighters)
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Safety Officer Presumptions in Workers’ Compensation Claims
As risk managers, we should never assume that presumption is a foregone conclusion. While our experience tells us most claims will ultimately be accepted given the liberal construction clause of our various state statutes: If you never ask the question, you will never get a different answer.
leave them time to pursue other ventures. A police officer who ran a successful karate dojo claimed a back injury was caused by the weight of his duty belt (a presumption in California). However, the investigation disclosed that his symptoms had a rather sudden onset, and emergency room records were obtained that documented a visit right after a karate competition. After review of this information, the examining physician concluded the injury was not work-related, because the area of the back involved in the alleged claim was not the same part that would be affected by wearing a duty belt. As risk managers, we should never assume that presumption is a foregone conclusion. Consider following these recommendations to ensure a thorough investigation: Review the applicable statute(s) and understand what qualifies a condition as a presumption. Does the officer have the requisite length of service? Did the officer have outside employment or hobbies that explain causation? Do an employer-level investigation, and focus on confirming exposure to conditions that could create a presumption. For example, was the officer a smoker? Did the officer actually wear a duty belt? How much did it weigh? Was the firefighter exposed to “known carcinogens”? Armed with this knowledge, the examining physician is better suited to determine whether the presumption is applicable or if it can be defended. Understand whether the claim will be a contentious one. Is the first notice of a claim from an attorney? Has the officer been the subject of internal affairs or disciplinary proceedings? Are there union or other workplace
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issues? Is the officer using the workers’ compensation claim, and accompanying temporary disability to avoid discipline? While these external influences may not help with the compensability analysis, knowing what else is going on can help adjuster investigate and manage the claim more effectively. Review all available medical literature for studies on the relationship between exposure and presumptions, and provide this information to the examining physician. The internet is a great resource for this. Just Google “firefighter bladder cancer” and see what you get. The finding of a presumption for workers’ compensation may have the effect of opening the door for a variety of non-WC benefits. The costs risk managers are most familiar with—workers’ compensation—include not only benefits for medical treatment, lost time and permanent impairment, but also entitlement to lifetime future medical benefits. It is important for risk managers to know what benefits, in addition to workers’ compensation, an injured officer may be entitled to, and educate the claims staff about the implications of an accepted claim on those benefits. Retirement for industrially caused disability is often also the inevitable outcome of a presumption claim. In addition to taxpayers having paid for contributions to the organization’s retirement plan, an industrial disability retirement may have a significant percentage that is not taxable. For example, in California, an officer with 30 years of service receives 90 percent of his/her salary at retirement. If the retirement is for disability on a WC claim, 50 percent of the benefit is not taxed, resulting in take-home pay greater than was earned while employed. In recent California news, an article
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What is a presumption claim?
disclosed several communities in Southern California with industrial disability retirement rates as high as 70 percent. Because of the application of liberal construction to presumptions, a 50-year-old officer with hypertension—not an unusual finding at that age—filed a workers’ compensation claim. After a year of temporary disability (in California, paid at the full salary rate and non-taxable), he is given a lifetime restriction from “no undue stress” or something similar, and precluded from performing his usual duties. Industrial disability follows, even though the police officers get to keep their concealed weapons permits, and occasionally even go to work for another police department. When it is time to settle the workers’ compensation claim, don’t overlook any civil or employment litigation the officer may have pending. There can be an opportunity to enter into a global settlement. Workers’ compensation settlement dollars go further than employment practices dollars because workers’ compensation is usually not taxable. For a self-insured employer, it may be less expensive overall to pay a bit more on the workers’ compensation claim to secure a release from any potential employment or discrimination actions.
A presumption claim in workers’ compensation means that if certain facts are proved by the claimant regarding an injury or medical condition, then that injury or medical condition is presumed to be compensable without the claimant having to prove specifically that the job caused the injury or medical condition. Workplace causation is often difficult to prove for such injuries or conditions such as heart trouble, hernia, cancer and pneumonia. For the presumption to apply, generally, all the safety officer has to prove is that they have the covered medical condition and that the condition arose while they were still an employee or within a specified time after employment ceased. For cancer, the safety officer may have to additionally prove exposure to a known carcinogen during employment. After those elements are proven, the burden then shifts to the employer to prove that the condition did not arise from work, which is, in most cases, difficult if not impossible. If the employer cannot sustain its burden, the claim is compensable.
The message here is that although the safety officer presumption laws in workers’ compensation may shift the likelihood of compensability in favor of the employee, it is not a foregone conclusion. Thorough investigation and preparation is essential in evaluating the defensibility of the presumption claims. They are not necessarily “losers.” Norin Grancell is a certified specialist, workers’ compensation law, certified by the State Bar of California Board of Legal Specialization with the law firm of Grancell, Lebovitz, Stander, Reubens and Thomas, A Professional Corporation. Diana J. Rich, ARM-P, is the workers’ compensation program manager for the California Joint Powers Insurance Authority.
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Public Risk Management Association
Your
Risk Management Journey Begins Here
Are you taking advantage of all that PRIMA has to offer? Professional Development
Networking
• PRIMA Annual Conference • Online education opportunities including PRIMA’s Webinar Series and the industry’s only Associate in Risk Management and Risk Management for Public Entities online tutorials.
• Leadership Opportunities: Get Involved! Join a committee, task force or even become a director on PRIMA’s board and provide input in what PRIMA does and how we do it. • PRIMA Chapters: Make contacts on your local level, share what you know, and learn from experts and innovators in meetings, workshops, and seminars in your area. • Online Membership Directory: A members-only resource where you can locate and contact PRIMA members in various risk management fields.
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Why it is Important to Understand
the Dark Side of Leadership
By Jann E. Freed
Leadership appears to be a challenge in the 21st century given the list of recent corporate scandals. In 2002, Forbes.com published a list of companies involved in questionable practices. The list included Adelphia Communications, Time Warner, Arthur Andersen, Duke Energy, Dynergy, El Paso, Enron, Global Crossing, Halliburton, Homestore. com, Qwest Communications International, Reliant Energy, WorldCom, and Xerox. This was before the financial meltdown in 2008 that caused the Great Recession. This involved the federal takeover of Fanny Mae and Freddy Mac in the subprime mortgage crisis and AIG’s liquidity crisis. Then there was the Bernie Madoff scandal and powerfully negative impact on his family and clients‌and the list goes on. It is common for people to attend leadership institutes, programs and seminars to refine their skills. They take courses, read books and many of these books end up on the bestseller lists. One might ask, with all of this preparation, why are there so many bad leaders?
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The Dark Side of Leadership In the Journal of Management Inquiry, Andre Delbecq wrote an article titled, “’Evil’ Manifested in Destructive Individual Behavior: A Senior Leadership Challenge.” He defined the evil individual as someone who “sucks the life juices from the organizational group by unusually destructive behavior, crippling the group in such as way that all positive spirit is lost.” In the article, Delbecq explains how most people in organizations are not prepared to deal with “evil” individuals. While people who demonstrate deeply hurtful behavior are usually rare, they do exist and they create toxic environments for others in the organization. Delbecq said he wants to believe that most leaders want to be good bosses, but that they are often unaware of their blind spots that negatively affect others.
Many of our corporate leaders are selected for the wrong reasons. The trend in leadership has been toward the hero leader, who is charismatic and placed on a pedestal by followers.
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One of the most common themes of leadership is that it begins with self-knowledge and insight, and the emphasis is on understanding one’s strengths and abilities. Marcus Buckingham and Donald Clifton, in their book, Now, Discover Your Strengths, say it is more important to understand one’s strengths than to improve one’s weaknesses. Though this might be true, some of the very strengths that enable leaders to be successful can become liabilities if not kept in balance. The dark side of leadership can take over if the person is unaware of the negative effect of their ego, and it can become a “shadow.” Parker Palmer explains the shadow in his book, Let Your Life Speak, “A leader is someone with the power to project either shadow or light onto some part of the world and onto the lives of the people who dwell there. A leader shapes the ethos in which others must live; an ethos as light-filled as heaven or as shadowy as hell. A good leader is intensely aware of the interplay of inner shadow and light, lest the act of leadership do more harm than good.” It is important to understand that strengths applied to an extreme can become a shadow that manifests itself in bad leadership behavior, such as greed, defensiveness, micromanaging and increased bureaucracy. It is also possible to have people who create a mean-spirited culture where members treat each other with disrespect. This can play out as insults, backstabbing and unhealthy teasing. Meanness damages people and increases costs because it drives people out of the organization and productivity down. Repeatedly, research has proven that people don’t leave bad companies, they leave bad bosses.
Public Risk | July 2011
My favorite definition of leadership was from a seminar I attended facilitated by Peter Senge, author of The Fifth Discipline and founder of the Society for Organizational Learning (SoL). Senge asked us to come up with different words for leader and people mentioned words such as inspiration or aspiration. He reminded us that spire comes from the Latin root meaning, “breathe.” Therefore, he defines leadership as the ability to “breathe life into someone or something.” I have modified this by saying, “Leaders breathe life into people, programs, and projects.” Leaders often think about legacy at the end of a career or when they take new positions—when they “leave.” As defined by Galford and Maruca (2006) in Your Leadership Legacy: Why Looking Toward the Future Will Make You a Better Leader Today, “Legacy thinking is a tool through which leaders can filter and assess their decisions … It also serves as a powerful check to help leaders ensure that their priorities—personal and organizational—are reflected in their actions.” Since organizational success can come at a personal price, future leaders need to realize the impact they are having on others and do this on a regular and ideally daily basis. Many of our corporate leaders are selected for the wrong reasons. The trend in leadership has been toward the hero leader, who is charismatic and placed on a pedestal by followers. They are charismatic, but lack character. They have style, but lack substance. They are highly profiled, but lack integrity. The dark side of this model is leaders’ fear of showing vulnerability by displaying any weakness, imperfection or insecurity. Often these fears are masked in excessive pride that expresses itself as arrogance, a sense of entitlement, difficulty accepting responsibility for mistakes and addiction to perfection. Yet, leaders are people and people make mistakes. Sincerely apologizing for mistakes made and forgiving
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others for their imperfections are powerful actions for leaders to take. In the 1970s, there was a popular book titled, I’m OK You’re OK, by Thomas Harris. Our minister put a twist on this title. He said that we should approach all people as, “I’m not OK and you’re not OK and that is OK.” This perspective reflects grace because we are not perfect and neither are the people with whom we are working and living. Admitting mistakes with a sense of grace is a powerful way to lead. People are more likely to want to listen to, follow, and work with others who realize when they are wrong and strong enough to admit mistakes. Forgiveness also needs to be a leadership skill and practice. This is not a skill often mentioned in the skill sets needed for today’s organizations. However, it is a skill needed for all relationships and leadership is a relationship. We are presented opportunities almost on a daily basis to practice aspects of forgiveness. When we practice forgiveness, it controls the dark side from taking over and dominating our thoughts and behaviors. Robert Sutton, author of Good Boss, Bad Boss, says that if a workplace is mired in meanness, it is likely the boss deserves part of the blame and may not even realize it. People who have power often have no idea of their impact on others. They don’t know how their weaknesses are hurting morale and performance. It is true that there are a few “bad apples” in some workplaces. But if leaders think about the legacy they are leaving on a daily basis, the odds are good that they will be considered good bosses and casting more light than darkness in the workplace. As Peter Senge says in his book, Presence, “Creating an environment where people can be happy in work—an inner happiness that life is moving in a direction in which they want to be involved—is key for two reasons. It is instrumental because people are more productive and it is intrinsically a good thing to do. The simplicity of this is illuminating.” While the concepts of leadership may be common sense, it is often not common practice. Leaders need to continue to develop themselves, realizing that it is a journey and evolutionary process. Leaders don’t ever arrive at being the perfect leader. As leaders, if we discover our strengths, are aware of our dark side (and we each have one) and consistently think about the legacy we are leaving with our decisions and behaviors, then we should be creating an environment where people want to work. Jann E. Freed is a professor of management at Central College and the Mark and Kay De Cook Endowed Chair in Leadership and Character Development.
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PRIMA Members Blaze the Trails of Risk in Portland By Jennifer Ackerman, CAE
Risk managers from across the United States and abroad gathered in Portland, Ore., in June for the industry’s premier conference dedicated to risk management in the public sector. Nearly 1,000 attendees enjoyed three days of learning and networking in the shadow of Oregon’s Mount Hood at PRIMA’s 2011 Annual Conference. The conference kicked off on Monday morning, June 6, with PRIMA Director Betty Coulter’s rendition of the Star-Spangled Banner. Then PRIMA President Laura Peterson, JD, MPA, provided an update on the state of the association. Peterson highlighted some of PRIMA’s accomplishments during the past year, including the ability of PRIMA members to access its Webinar series free-of-charge, as well as PRIMA’s increased collaborations with several groups including NIOSH and OSHA. Peterson also gave a heartfelt thanks to the conference sponsors, exhibitors and volunteer leaders who supported PRIMA’s conference, most notably the Oregon chapter of PRIMA. Peterson was followed by a motivating keynote address from speaker Michael Jackson on the challenge of change. Following the morning general session, attendees spent the first day of the conference in concurrent sessions learning about topics such as loss forecasting, contractual risk transfer and enterprise risk management. Attendees gathered for PRIMA’s Awards Luncheon on Monday afternoon to honor risk management excellence. Peterson and President-Elect Cindy Mallett, AIC, CWCP, ARM-P, presented awards for achievement in risk management programs, products and pools, in addition to awarding PRIMA’s Public Risk Manager of the Year prize to James Huckaby, ARM-P, director of risk management for the Mesquite Independent School District in Mesquite, Texas. “James has shown a commitment to risk management that made him a standout in a very competitive field of candidates this year,” said Marshall Davies, PhD, PRIMA interim executive director. “He has shown the kind of dedication to public sector safety and accountability that personifies PRIMA’s Public Risk Manager of the Year.”
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Thanks to the 2011 Annual Conference Sponsors for their generous support. Platinum
Risk managers from across the United States and abroad gathered in Portland, Ore., in June for the industry’s premier conference dedicated to risk management in the public sector. Nearly 1,000 attendees enjoyed three days of learning and networking in the shadow of Oregon’s Mount Hood at PRIMA’s 2011 Annual Conference.
GOLD Throughout Monday and Tuesday, attendees crowded into the PRIMA exhibit hall to learn about new products and services for public sector risk managers. Tuesday evening, after a long day of learning, attendees gathered at the Portland Art Museum for PRIMA’s Night at the Museum. Visitors were greeted by an assortment of Portland “food trucks,” which served up a taste of Portland’s thriving food truck scene. Then conference attendees danced the night away to the sounds of one of Portland’s most popular bands.
SILVER
Wednesday kicked off with PRIMA’s annual Fun Run/Walk. Nearly 60 runners and walkers lined up at the Oregon Convention Center to start their day with a two-mile jaunt along Portland’s waterfront. All proceeds from the event were given to the Portland Food Bank, which received a donation of $600. After a short morning of education sessions, the PRIMA Annual Conference wrapped up with the membership luncheon, where the new slate of officers was installed, including PRIMA’s 2011-2012 president, Cindy Mallett, AIC, CWCP, ARM-P, president-elect, Dan Hurley, CSP, ARM-P, MS, and two new PRIMA board members: • Ed Beecher • Regan Rychetsky, ABCP Risk Manager Director, HHS Enterprise Risk Management and Safety City of Pompano Beach, Fla. Texas Health and Human Services Commission
BRONZE American Heart Association AssetWorks Appraisal CorVel Corporation
PRIMA would like to thank the 2011 Annual Conference Planning Committee members for their hard work and dedication, which helped make the event a success. A special thanks also goes out to the 2011 Annual Conference sponsors for their generous support.
See you next year in Nashville!
Ironshore Marsh Meadowbrook Poms and Associates Insurance Brokers, Inc.
July 2011 | Public Risk
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Don’t Let Risk Take the Air Out of Your Inflatable Amusement Ride Events By Dan Foster, ARM-P
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Public Risk | July 2011
www.primacentral .org
Inflatable amusement rides, such as bounce houses and inflatable slides, have grown in popularity over the years. They provide a fun and healthy activity for young children and can be a powerful draw to a community event. Sadly, if not properly managed, tragedy can occur turning what should be a day of fun into a “house of horrors.”
The Consumer Products Safety Commission reports 31,069 emergency room visits from inflatable amusement rides occurred between 2003 and 2007. Injuries from bounce houses accounted for 91 percent of those visits. During this same time there were four deaths related to inflatables. It is not difficult to find incidents involving inflatable amusement rides in the media. Here are a few recent tragedies. (May 7, 2011) – At a festival in Encino, Calif., four children suffered minor injuries when an inflatable slide collapsed. According to the Los Angeles Fire Department, too many children were on the slide, and there was no adult supervision at the time of the accident. (April 29, 2011) – At an elementary school in Clovis, Calif., five children were injured when a wind gust toppled an inflatable slide. (April 2, 2011) – In Tucson, Ariz., two children suffered serious injuries after a bounce house was blown into the air by a sudden gust of wind while they were inside the ride. According to Tucson police, the inflatable blew across three lanes of traffic before it landed on the side of a road. The children were hospitalized.
Regulatory Changes The rise in deaths and accidents over the years has led many states to enact laws regulating the use of inflatable rides. Most require rides to comply with ASTM F2374 Standard Practice for Design, Manufacture, Operation, and Maintenance of Inflatable Amusement Devices. These states also require ride operators to be licensed and insured. Many require that rides be inspected and permits secured to ensure operational and electrical sufficiency. What are the common problems that lead to injuries? There are several conditions that every entity needs to consider when planning inflatable ride events. The following
are some of the specific conditions that lead to accidents if not properly addressed: Location, location, location. Rides set up over concrete or pavement can result in serious injuries if a fall occurs. Slides and climbing walls require a substantial amount of fall zone (at least six feet in all directions). Many of the catastrophic injuries over the years have been the result of the user falling onto pavement. Ride not secured properly. This is the most common cause of ride accidents. A gust of wind can easily pick up a ride with children inside and blow it away. Rides require proper anchoring into the ground with stakes or secured to sand bags. It’s not unheard of for an inflatable slide to require 2,000 lbs or more of sandbags as proper anchorage. Ride manufacturers specify how much anchoring is required. Inflatable ride activities should be suspended if wind is predicted during the event. Improper use. Too many children, size disparity among children, roughhousing and poor supervision are common problems with inflatable rides. In 2007, a three-year-old suffered a broken neck and died when teenagers riding down a slide landed on him. Every ride has a maximum capacity of users allowed and should be supervised at all times. Rough play, body contact, flips, kicks and the like should be prohibited. Operators of the ride need to make sure that the rules are followed by all participants. Sudden inflatable collapse. Blowers are the life-blood of inflatable rides. They are usually powered by gas or electricity. It only takes seconds for a ride to collapse once a blower fails. Rides should be inspected for tears and defects. Blowers must be maintained and in good working condition with backups on site in case of problems. The power supply to the blowers should be capable of supporting the energy draw required to operate the rides.
July 2011 | Public Risk
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Don’t Let Risk Take the Air Out of Your Inflatable Amusement Ride Events Know Your Ride Provider The vendor you select should have the experience, service and resources to properly set up control and service the rides they provide. Avoid using a provider who simply drops off the rides and “hands the keys” over to you to set up and manage. As we have seen so far, this activity requires a high level of care, control and supervision. Additionally, your state may have requirements that need to be followed for inflatable rides. Here are a few things to consider when looking for an inflatable amusement ride vendor:
Risk exposure doesn’t have to take the air out of your event. Keep your event
• Are they licensed in your state? • Do they have the current, required operating permits? • Do they have the appropriate insurance coverage and the limits necessary to protect your entity? • Are the rides inspected by a qualified inspector? • Are ride rules posted and warning decals present on all rides? • Are the rides properly set up and anchored? • Does the vendor stay on premises to supervise the use of their equipment?
pumped up with
Ensure they set up all rides, and when possible, stay on site during the event to manage the mechanical and electrical equipment.
thorough planning,
Ride Selection
appropriate rides and
Consider your users when selecting rides. Giant slides and climbing walls may not be appropriate for toddlers and small children. Bounce houses are not designed for teenagers. Users with special needs may also have physical limitations that should be considered when selecting rides. Consult the ride manufacturer requirements for appropriate users and match it with the users you are serving. Limit the number of rides to the level of supervision you can provide and the space you have allocated for the event. It is better to have a few fun activities than to be understaffed and unable to properly supervise.
excellent supervision. Doing so can ensure your inflatable ride event is a memorable experience for all.
Ride Set Up Work with the appropriate staff at your organization to ensure proper placement of the equipment. Grassy fields away from other structures and equipment is ideal for setting up inflatable rides. Watch for overhead electrical wires. Maintain a minimum clearance of 20 feet from wires. Avoid setting up inflatables near roads, ponds, large trees or hazardous conditions.
Training and Supervision A sufficient number of trained operators need to be on hand to adequately supervise the rides. A minimum of one operator per ride is needed, but always consult the manufacturer’s recommendations for ride supervision. Ideally, it is best if the inflatable rental company provides the operators for the ride. In the event that your employees are tapped as operators then the rental company should provide training with regard to their rides. The training must be documented. Be sure to
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Public Risk | July 2011
have adequate first aid responders, first aid supplies and a communication plan for emergency calls. As the host, you should consider the following conditions with regard to supervision: • Is the operator taking care to ensure that users are appropriately protected? • Is the operator paying close attention when the ride is in use? • Is the operator observing restrictions about user size? • Is the operator strictly limiting the number of people on the ride at one time? • Does the inflatable ride appear to be overloaded or unstable? • Does the ride appear to be securely anchored? • Could the blower inflating the ride become accidentally unplugged causing ride collapse leading to possible injury?
Inflatable Ride Contracts and Insurance Most inflatable ride rental companies will require you to sign a contract. It will outline the scope of services provided as well as liability and insurance conditions. Never sign this agreement without reviewing the language carefully. The vendor may ask your organization to be held to a very high standard of care (ensuring the safety of the equipment for example). Avoid contracts that require the public entity to indemnify the vendor for all claims arising from their own (the vendor’s) negligence. Such an agreement puts your organization at a great disadvantage because it agrees to release the vendor of any liability for any damage as a result of any acts, omissions or negligence of theirs even in the event of sole negligence of the vendor. The inflatable rental company must insure its products, services and its staff. Obtain a certificate of insurance from the vendor showing a minimum of $1 million single limit commercial liability coverage. It should also include products and completed operations coverage and medical expense coverage. It is strongly recommend that you be named as an additional insured on their policy with regard to the event. This allows your organization to receive protection from the vendor’s insurance company in the event of a claim naming your entity. Consult with your insurance provider and legal counsel if necessary for clarification on how to protect your organization. For private events, such as a school carnival, parental permission slips should be secured for all users. The permission slip should include a description of the events and the inherent risks associated with the rides. Risk exposure doesn’t have to take the air out of your event. Keep your event pumped up with thorough planning, appropriate rides and excellent supervision. Doing so can ensure your inflatable ride event is a memorable experience for all. Dan Foster, ARM-P, is a risk management consultant with Wells Fargo Special Risks.
www.primacentral .org
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Has your entity launched a successful program? An innovative solution to a common problem? A money-saving idea that kept a program underbudget? Each month, Public Risk features articles from practitioners like you. Share your successes with your colleagues by writing for Public Risk magazine! For more information, or to submit an article, contact Jennifer Ackerman at jackerman@primacentral.org or 703.253.1267.
Go Online and Get Out of the Classroom! If you are agent/broker, business executive, risk manager, or an operational risk staff member, the in-depth knowledge you receive with an ARM designation will greatly benefit you and your entity. The Associate in Risk Management (ARM) designation requires completion of the 3-part ARM series: ARM 54–Risk Assessment; ARM 55–Risk Control; and ARM 56–Risk Financing. Prepare for these exams with the Public Risk Management Association's online tutorials—proven beneficial tools in the studying process. Upon purchase, you have 365 days of studying time. The tutorials fit your individual schedule, whether you are at work, at home, or on travel; they are available 24/7. Check out the PRIMA Online Programs section of our Web site, www.primacentral.org, and register today!
July 2011 | Public Risk
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Member Spotlight
Port of Long Beach Creates a More Effective Contractual Risk Transfer Program Each month, Public Risk features a member who has gone above and beyond in a feature column titled “Member Spotlight.” Do you know someone who deserves recognition, has made a contribution or excelled in their profession?
L
ike many entities, the Port of Long Beach, Calif., found itself in an unenviable position: the Port had an ineffective risk transfer process that was exposing it to an unacceptable risk of loss. Instead of waiting to be included in the contractual risk transfer process, the risk management division at the Port decided to create a more effective program that would help minimize the Port’s exposure from the start. “The risk management division, along with members of other city departments and public agencies developed the Port of Long Beach Risk Transfer Process,” said Rich Baratta, director of risk management for the Port.
If so, we’d like to hear from you for this exciting column, as PRIMA shines the spotlight on its members. To be considered for the Member Spotlight column, contact Jennifer Ackerman at jackerman@primacentral.org or 703.253.1267.
After six months, the risk management division had successfully created a program that provides a more effective transfer of risk from the Port to organizations that create the risk exposure. “The program integrates the risk management process at the beginning of the project rather than the typical risk management point of involvement, which is after a loss occurs,” said Baratta. The program includes a robust risk transfer method that is comprised of contractual risk transfer through indemnification and a five-step risk-transfer verification process: Customized insurance requirement provisions are included in each contract, and are based upon the activities to be performed, regardless of company size or contract amount. The Port obtains appropriate evidence of insurance to ensure that risk is transferred to an entity that has the financial ability to respond should a loss occur. The Port offers two methods to provide evidence of insurance: a) Port special endorsement forms, which were developed by
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Public Risk | July 2011
the Port to ensure that risk is effectively transferred from the Port to the involved insurer, or b) certified copies of completed policies, endorsed with the terms contained in the contract. The insurance documents are reviewed to ensure that the coverage provided meets all requirements contained in the contract and that proper protection for the Port is provided. If any insurance policy contains a deductible or selfinsured retention that exceeds an amount acceptable to the Port, a financial review is conducted to ensure that the organization can fulfill those deductibles/self-insured retentions so that the coverage for the Port will be available should a loss occur. The division monitors insurance policy expiration dates and cancellations to ensure that appropriate evidence of insurance is on file at all times as required by the contract. “The Port’s risk transfer process is unique because it includes a risk-transfer verification component, which goes beyond the typical methods employed by the majority of other entities,” said Baratta. “It interjects the risk management process at the beginning and includes it throughout the entire contract process to final acceptance.” Baratta also said that this program is easily adapted to other entities because it is not Port-specific. “No significant modifications would be required,” said Baratta. “The entity would need to adapt the process to conform to their specific contracting process and ensure they had enough knowledgeable staff to implement the process.” For more information on the Port of Long Beach’s Risk Transfer Process program, contact Rich Baratta at baratta@polb.com.
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