Published by the Public Risk Management Association
www.primacentral.org
May/June 2011
Georgia Risk Manager Becomes PRIMA’s 33rd President
Meet Cindy Mallett, AIC, CWCP, ARM-P
Do You See What I See? Interpreting Insurance Policy Language
Speedy Complaint Systems Picking Up the Pace May Open the Door to Liability
Blazing the Trails of Risk PRIMA’s 32nd Annual Conference Preview
Why do we pay claims when it seems we’ve done nothing wrong? Seven Habits of a Highly Effective Risk Information System
The ever-changing world of public sector risk can perplex even the most experienced professionals. That’s why it’s important to partner with an industry expert like OneBeacon Government Risks. With decades of public entity expertise, customizable insurance solutions and industry specific risk management services, our team will help make your entity a safer place to live and work. And when something does go wrong, our dedicated claims team can help you navigate the right solution. To learn more, email: GovernmentRisks@onebeacon.com, logon to onebeacongov.com or visit the PRIMA conference booth # 721.
This program may be underwritten by one of the following insurance companies located in Canton, Massachusetts: The Employer’s Fire Insurance Company, OneBeacon American Insurance Company, The Camden Fire Insurance Association and OneBeacon Insurance Company.
Volume 27, No. 5 | May/June 2011 | www.primacentral.org
The Public Risk Management Association promotes effective risk management in the public interest as an essential component of public administration.
Interim Executive Director Marshall Davies, Ph.D.
Contents
President Laura Peterson, JD, MPA Director of Risk and Insurance University of Wyoming Laramie, WY Past President Ron Hayes Risk Manager Calcasieu Parish School Board Lake Charles, LA
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6 Georgia Risk Manager Becomes PRIMA’s 33rd President Meet Cindy Mallett, AIC, CWCP, ARM-P By Jennifer Ackerman, CAE
11 Do You See What I See? Interpreting Insurance Policy Language By Paree Roper
16 Speedy Complaint Systems Picking Up the Pace May Open the Door to Liability By Jeff Rogers
18 Blazing the Trails of Risk PRIMA’s 32nd Annual Conference Preview By Jennifer Ackerman, CAE
23 Why do we pay claims when it seems we’ve done nothing wrong? By Bradley York
28 Seven Habits of a Highly Effective Risk Information System By Lee Mashore
In Every Issue 4 News Briefs | 31 Advertiser Index | 32 Member Spotlight
President-Elect Cindy B. Mallett, AIC, CWCP, ARM-P Risk Manager City of Gainesville Gainesville, GA Directors Betty Coulter Risk Management Director City of Asheville Asheville, NC Matt Hansen, MPA Director, Risk Management Division City & County of San Francisco San Francisco, CA Dan Hurley, CSP, ARM-P, MS Senior Director, Risk Management & Safety Norfolk Public Schools Norfolk, VA Dave Parker, ARM-P Risk Manager Pima County Sheriff’s Department Tucson, AZ Marilyn Rivers, CPCU, ARM, AIC Director of Risk and Safety City of Saratoga Springs Saratoga Springs, NY Linda Spacek Interim Director, Human Resources City of San Marcos San Marcos, TX Editor Jennifer Ackerman, CAE Senior Manager, Communications 703.253.1267 • jackerman@primacentral.org 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 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.
May/June 2011 | Public Risk
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Message from PRIMA President Laura Peterson
A State of Transition
I
t is hard for me to believe a year has passed and it is time for me to write my last message to you, my friends and fellow PRIMA members. Darren L. Johnson said, “To realize the outcomes you want, it is critical to recognize and experience the transition from our present thoughts, habits and actions to new thoughts, habits and actions.” This year has truly been one of transition both for me personally and for PRIMA. Many of you know that I moved from the state where I grew up, went to college, got married, started a family and learned to be a risk manager to the Wild West. I have been surprised to find some of the Wild West stereotypes, particularly that there are no rules and the people don’t want any rules, are true. As I faced the challenges of implementing a risk management program in a place where rules and procedures are frowned upon, I have relied heavily on and been thankful for the wise counsel of my PRIMA colleagues. I could not have made the positive impact I have made without each of you. Whatever challenges you face, I hope that you find your membership in PRIMA as valuable as I do as you address and conquer your challenges. Most of you may not know about the many important transitions taking place at PRIMA, but I assure you the transitions, although not outwardly visible, are moving PRIMA from its present thoughts, habits and actions to a bright future that promotes public risk managers and risk management in public entities. I hope you will join me in thanking the current PRIMA board and staff for their tireless work investing in PRIMA’s future. Each and every board and staff member has unique skills and they have gone above and beyond the call of duty to ensure PRIMA is financially sound and capable of meeting the needs and exceeding the expectations of its diverse membership.
Of particular importance is the selection of individuals as the future leaders of PRIMA. I applaud your selection and welcome the participation of Regan Rychetsky, from the State of Texas, and Eddie Beecher from the City of Pompano Beach, Florida. Regan and Eddie bring a wealth of knowledge and ideas that will serve PRIMA well in the coming years. I hope you will join me in thanking them for their willingness to serve. I encourage you to seek out Eddie, Regan and other members of the board to talk with them about your ideas for the future of your association. Finally, at PRIMA’s 2011 Annual Conference, with great pleasure and confidence, I turn over the helm to your new president, Cindy Mallett. Cindy is a dedicated PRIMA member, a skilled risk manager and human resources professional, a thoughtful leader and a cherished personal friend. You can read about Cindy in the pages that follow but I hope you will take time to build a relationship with her. I know from personal experience your efforts will be rewarded both personally and professionally.
I have relied heavily on and been thankful for the wise counsel of my PRIMA colleagues. I could not have made the positive impact I have made without each of you. Whatever challenges you face,
One of my favorite lines from Annie is, “How lucky I am to have something that makes saying goodbye so hard.” I am blessed to be part of such a wonderful organization and I know that the future is bright for PRIMA and its members!
I hope that you find
Sincerely,
valuable as I do
your membership in PRIMA as
as you address and conquer your Laura Peterson, JD, MPA 2010–2011 PRIMA President Director of Risk and Insurance University of Wyoming
challenges.
May/June 2011 | Public Risk
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News Briefs
News
Briefs JFK Runway Collision Spotlights Dangers on the Ground The violent collision between a double-decker Airbus A380 and a regional jet at New York’s John F. Kennedy International Airport is a sobering reminder that the ground can be a dangerous place for an airliner, reports USA Today. Air France Flight 7, flying the largest passenger plane in the world, was taxiing toward takeoff at 8:08 p.m. when its left wing struck the tail of a Comair jet. “Roll the emergency trucks at Mike,” one of the Comair pilots radioed moments after the collision, identifying his location at taxiway Mike. “We’ve been hit by Air France.” None of the passengers on board the two jets were hurt. The pilots on Comair Flight 6293 ordered passengers to make an emergency exit on the tarmac and called for fire trucks, Federal Aviation Administration spokesperson Jim Peters said. The violence of the collision, which appears to have been capable of causing serious damage, indicates that the event needs to be taken seriously, aviation safety experts say. “This was a significant collision that clearly has safety implications,” Bill Voss, president of the non-profit Flight Safety Foundation, said. The NTSB is investigating the collision, spokesperson Keith Holloway says.
Town Ends Taser Use by its Officers Citing liability concerns, Stallings, N.C., abandoned Tasers early this year. Nearby Monroe, N.C., recently added the weapons, and police officers completed training in their use in April, reports the Charlotte Observer. Stallings police have had Tasers since 2008, but the town discontinued them in January to reduce its liability risk, Chief Michael Dummett said, declining to elaborate. He was careful not to criticize Monroe or other cities that choose to use Tasers. “That’s their decision,” said Dummett, who took over as chief in December. “It’s a real sticky issue for a lot of law enforcement.” Tasers are an electronic control device. They use compressed nitrogen to shoot a pair of tethered needlelike probes into the skin to deliver an electric shock that temporarily subdues a person. Nationally, more than 16,000 law enforcement agencies use Tasers, including 579 in North Carolina. It is rare for departments to drop Tasers, said Steve Tuttle, spokesperson for the Arizona-based company. He said only three other agencies stopped using them; none were in North Carolina. And Tuttle dismissed liability concerns: “That’s the last thing we have trouble with.”
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Public Risk | May/June 2011
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Mountlake Terrace, Wash.: No Medical Pot Shops Here Anticipating a possible new state law aimed at facilitating the medical marijuana business in Washington, the Mountlake Terrace City Council has adopted a moratorium on such facilities in the north Seattle suburb, reports the Seattle PI. Mountlake Terrace’s new law was adopted in April “as a precaution in case the Washington State Legislature decides to adopt a bill allowing such dispensaries.” At an upcoming public hearing, the City Council will decide whether to continue the ban for the full six-month period or let it expire. The Washington State House passed a bill that would establish a regulatory system for the medical marijuana business and seek to provide criminal liability protection for patients. Washington is one of 15 states where pot use for medical purposes is legal. Voters there overwhelmingly approved an initiative in 1998.
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Medicare, which provides medical coverage for about 45 million elderly Americans, could save as much as $50 billion over the next decade, HHS said. Sebelius said up to $1 billion in federal funding is being made available through last year’s health care overhaul law to help improve patient safety at hospitals. The Obama administration and Congress are trying to curb runaway health care costs as they grapple with the U.S. budget deficit and debt burden. Sebelius said 500 hospitals had already joined the initiative.
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May/June 2011 | Public Risk
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Georgia Risk Manager Becomes PRIMA’s 33rd President
Meet Cindy Mallett, AIC, CWCP, ARM-P By Jennifer Ackerman, CAE
On Cindy Mallett’s first day as the risk manager for the City of Gainesville, Ga., she was lucky enough to find a “must-do” list on her desk, left behind by her predecessor. She immediately noticed one of the top things on the list was to renew the city’s PRIMA membership. Since that day in 2001, Mallett has become in integral part of the Public Risk Management Association’s leadership. On June 8, she will be sworn in as PRIMA’s 2011–2012 president during the 32nd Annual Conference in Portland, Ore.
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Public Risk | May/June 2011
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“When I became actively involved in PRIMA, I found that same spirit among fellow committee members, and, as my involvement grew, among fellow board members, corporate A Risk Manager is Born “I’ve been involved in risk management since 1988,” said Mallett. Like many risk managers, Mallett’s early involvement was not intentional. “I had just begun working in the private sector, in the pipeline construction industry, and was initially tasked with processing workers’ compensation claims and, later, liability claims,” she said. “Safety was eventually added to my plate, along with insurance procurement. And like that, a risk manager was born!” In 2001, Mallett joined the public sector as the risk manager for the City of Gainesville. Since she didn’t have any experience in public risk management, Mallett did exactly what her predecessor recommended, and renewed her city’s PRIMA membership. “Coming from the private sector, I had never heard of the Public Risk Management Association,” she said. “Then a few weeks later, I was on a plane to Chicago to attend my first PRIMA conference. I returned with a briefcase full of valuable session handouts and a stack of business cards for risk management professionals that I now call friends. I’m so glad that I renewed that membership, because PRIMA—and its members—quickly became my ‘go-to’ resource for addressing risk management challenges.”
Getting Involved
“In 2007, I was privileged to be chosen for the PRIMA board of directors. I went on to serve on several other PRIMA committees while a director. I never imagined that I would become PRIMA’s president, and I am humbled and honored to serve this organization that has given me so much.” Mallett says that board and committee work has been immensely satisfying, primarily because of the people that she has been fortunate enough to encounter.
partners and staff. These groups give so willingly of their time and talents, and each plays an integral role in PRIMA’s success.
“One peek at the PRIMA Cybrary reveals the spirit of sharing that our members demonstrate so willingly,” she said. “When I became actively involved in PRIMA, I found that same spirit among fellow committee members, and, as my involvement grew, among fellow board members, corporate partners and staff. These groups give so willingly of their time and talents, and each plays an integral role in PRIMA’s success. Networking with these individuals and learning from them has been very rewarding.”
Putting PRIMA to Work in Georgia Like most local governments, the City of Gainesville’s greatest challenge in the last five years has been the impact of the economic downturn and the resulting decrease in tax revenues. Strained funding required the city to freeze hiring for a time, implement furloughs and conduct a small number of employee layoffs.
Mallett became active in PRIMA first at the chapter level. In 2003, a group of local risk managers resurrected the defunct Georgia chapter. Working with James Huckaby, ARM-P, and others at PRIMA, Mallett’s group got the chapter back on its feet. Mallett served on the chapter’s board of directors.
“All of this occurred at the same time we combined risk management with human resources, so I called on fellow PRIMA members who also have HR responsibilities to talk me through my concerns and to share their experiences,” said Mallett.
“I began my involvement at the national level in 2004, as a member of the Chapter Relations Committee, which I later chaired,” she said.
Another result of the city’s financial challenges was the limited budget available for training and other safety programming.
May/June 2011 | Public Risk
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Meet Cindy Mallett, AIC, CWCP, ARM-P
“In 2007, I was privileged to be chosen for the PRIMA board of directors. I went on to serve on several other PRIMA committees while a director. I never imagined that I would become PRIMA’s president, and I am humbled and honored to serve this organization that has given me so much.”
“The resources PRIMA offers, through PRIMAtalk, the PRIMA Cybrary, and elsewhere, helped bridge the gap until funding improved,” said Mallett. “Through PRIMA, I have gained knowledge and skills that helped improve our risk management program, and that helped me demonstrate and articulate to our decision-makers the value of risk management.”
Putting PRIMA to Work for You We all know that risk management is no longer simply buying insurance. Risk managers today must have sharper business acumen than ever before. Recent auditing trends, as well as the financial challenges risk managers have experienced, require them to view risk from a broader perspective. “The savvy risk manager can help his or her entity to understand its appetite for risk, and to think about risk in a more strategic manner,” said Mallett. “Luckily, that’s where PRIMA comes in.” PRIMA has so many resources available to members that it is difficult to identify just a few as “the best,” Mallett said. One very positive trend is that, in addition to more traditional offerings, PRIMA now offers many member benefits in an electronic format. “In today’s environment, many of us have faced shrinking travel budgets and increasing responsibilities that place rigorous demands on our time,” she said. “It’s important to have resources, like the PRIMA Cybrary and PRIMAtalk, which can be delivered right to our members’ desktops. Another tremendous benefit is the Webinar series, which provides members with free training on a variety of topics, for an unlimited number of viewers—all without leaving the office. Even Public Risk magazine, which is always
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Public Risk | May/June 2011
a great source of informative and timely articles, is now available in an interactive electronic format, so information is always at our fingertips. PRIMA has also joined the social networking craze, through our online presence with Facebook and LinkedIn.” Unfortunately, many members do not take advantage of all that PRIMA has to offer. “We’ve all experienced the ‘dues-only syndrome’ at some point—we pay dues to an organization that looks promising, but then we never actually take advantage of the benefits that the organization offers,” said Mallett. “PRIMA members are definitely doing themselves a disservice if they don’t try some of the products and services PRIMA offers. “I’d like to see a greater number of participants in our Webinars,” Mallett continued. “During 2011, PRIMA Webinars are provided to members at no charge. These Webinars provide training on a variety of topics that are relevant to today’s risk management practitioner, and are conducted by industry leaders who know and understand the challenges we face.” The benefit of participation is multiplied when the risk manager invites one or more coworkers to join in. “That’s really an unbeatable value!”
The Year Ahead As Mallett enters her term as PRIMA president, she knows firsthand the challenges risk managers face today. “Like my city, I believe that all public entities will continue to feel the effects of a slowed economy,” she said. “Risk
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Meet Cindy Mallett, AIC, CWCP, ARM-P
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. PRIMA’s calendar of events is current at time of publication. For the most up-to-date schedule, visit www.primacentral.org.
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 5–8, 2011 PRIMA 2011 Annual Conference Portland, OR Portland Convention Center 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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Public Risk | May/June 2011
managers will need to demonstrate the value of risk management in order to compete for limited dollars. If they haven’t already, some risk managers may become intimately familiar with the ‘do more with less’ directive as responsibilities and expectations change.” Mallett says that PRIMA must constantly scan the environment to identify trends and determine how the profession is changing, and then deliver programming to address those changes. “We are in an interesting time, economically and politically, and we are seeing the profession change as a result,” she said. “Many organizations are allowing (and expecting) a more strategic approach to the management of risk, which increases the body of knowledge required of risk management practitioners.” Another trend is the blending of operational areas within organizations, in an attempt to eliminate redundancies and gain efficiencies. Mallett experienced this when the human resources function was added to her job. “The transformation has proven to be a positive one for our entity, but it required a considerable expansion of my existing skill set if I had any hope of being successful,” Mallett said. “PRIMA can support risk managers during these types of transformations through our educational offerings and by partnering with other organizations whose products and services complement our own.” These ideas will be the basis for Mallett’s presidency. Her priorities for her term include an increase in PRIMA’s visibility and outreach to non-traditional risk managers, including those who wear many hats but whose duties include some aspect of risk management. Partnering with other organizations to reach these audiences would support PRIMA’s mission to advance the knowledge and practice of public risk management, said Mallett. “Of course, I also want to listen to members and gauge how well PRIMA is meeting their expectations,” said Mallett. “Communicating with our members is the number one way we can be sure we are giving them what they need!” Cindy Mallett can be contacted at cmallett@gainesville.org.
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Do You See What I See? Interpreting Insurance Policy Language
By Paree Roper
Most of us have experienced the different interpretations that an optical illusion can provide. A primary example would be the drawing that upon initial view represents an attractive young woman, but upon further examination, the illustration becomes a craggy-faced witch with a bulbous nose. Another would be in the work of M.C. Escher, the Dutch graphic artist whose lithographs depicted odd happenings and whose claim to fame was to show that things were not always what they seemed. An insurance policy can often have illusory qualities as well. Say that a policy is purchased. Terms look great, the price is right. Life is good until one day, an incident occurs. The policy is examined and on the surface, it looks as if coverage is provided in this instance. Everything is a-okay, right? Not necessarily. There are differing perspectives on the meanings of terms used in insurance policies (especially by courts) and the impact on coverage can be significant. The following account tells of a high-profile incident involving a contracted bus. The subsequent court cases resulting from this incident illustrate just how things may not be what they seem.
The Incident On March 2, 2007, the Bluffton University baseball team was on its way to a tournament in Sarasota, Fla., via motor coach from their campus in northern Ohio. While passing though Atlanta, Ga., the bus driver mistook an HOV-only (High Occupancy Vehicle) exit ramp for the actual HOV lane on the freeway. The ramp ended at a T-intersection on a bridge and the bus approached this junction at highway speeds. Unable to stop, the vehicle breached the fencing and safety barriers on the bridge and fell onto the interstate below. The driver, his wife and five of the student athletes were killed in the incident and 29 other passengers in the coach survived with various degrees of injuries. The National Transportation Safety Board’s (NTSB) report stated that the probable causes of the incident were driver error and inadequate traffic control devices (signs) placed by the Georgia Department of Transportation.
May/June 2011 | Public Risk
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Do You See What I See?
The Court Cases and Opinions State tort law limits the state of Georgia’s liability to $3 million per occurrence, regardless of the number of people injured. The bus company had $5 million of coverage. The expected lawsuits materialized and initial rulings favored Bluffton’s insurers. Their attorneys argued that Bluffton University could not be liable because the school did not own the bus, did not hire the driver and the driver was an employee of the bus company. All the university did was contract for bus services; therefore, the driver and the bus were not ‘insureds’ under the policy. On the surface, it looks as if a fairly typical transfer of risk had occurred. Of course, this is not the end of the story by a long shot. This case wound its way through the trial and appellate courts and eventually reached the Ohio Supreme Court (Federal Insurance Company v. Executive Coach Luxury Travel, Inc., Slip Opinion No. 2010-Ohio-6300). Here is where things changed. On December 28, 2010, the justices reversed the lower courts’ decisions. In a 5-2 ruling, the justices concluded that the bus driver was indeed covered by Bluffton’s policy because they had hired the bus and had granted permission for this particular driver to operate the vehicle. How could this be? The justices’ opinion was focused on the policy’s “omnibus clause.” Part of the definition of an ‘insured’ within this clause included the phrase “anyone else while using with your permission a covered ‘auto’ you own, hire or borrow.” Although the university argued that they were using an independent contractor, the appellants (injured passengers and administrators of the estates of the deceased) argued that words not defined specifically within the policy must be given their commonly accepted meaning. In this particular case, the phrase ‘anyone else’ and the word ‘hire’ were interpreted by the justices according to their dictionary definitions.
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The ruling was reversed and this in turn has exposed the university to a potential $21 million payout (For a copy of this opinion, go to the PRIMA Cybrary and type in the keyword ‘executive.’ )
So What Can Be Done? Not much as far as this particular court ruling. This decision has the potential for changing the landscape, although Ohio is the only jurisdiction where it currently applies. Just as Escher’s drawings depicted the surreal, this ruling provides an illustration that is unsettling and not part of the landscape in which risk managers have been operating. It’s not necessarily a pretty picture. However, it is always a good idea and a wise practice to know as much about your entity’s policies before an occurrence happens. Let’s be honest: reading and comprehending an insurance policy is not necessarily the most fun thing to do, but gaining a thorough understanding of a policy and its language can pay dividends down the road. It pays to go back and review basics when it comes to understanding the contents of an insurance policy. Here are some parts of a policy that should be examined thoroughly in order to gain a better understanding: The Declarations Page. Check for accuracy. The declarations page is the summary of policy containing the insured’s basic information, policy dates, coverage provisions and coverage limits. This page may also contain any out-of-the-ordinary items that are covered by the policy such as artwork or specialized equipment. One thing to observe is whether the policy in your possession is the complete policy. In order to do so, take a look at the form numbers provided on the declarations page. If the form numbers line up with the pages in the policy, you should be in good shape. This is also a good place to note whether you have the right edition of the policy as well. Insuring agreements. This is the heart of the policy and addresses what the policy will cover and will also list
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exclusions to coverage. Take a look at agreements with an expansive eye and read exclusions strictly. Definitions. Many times, ordinary everyday words have special meaning in the context of an insurance policy. These terms are usually easily identifiable in a policy, for they are often shown in bold print, defined in a special section of the policy or surrounded by quotation marks. Pay special attention to the words and terms within a policy that are not defined. The case discussed in this article is proof of what can happen when one party has its own ideas of how a term is defined and another party (including the courts) has a completely different way of seeing the same term. Exclusions. As the name implies, these provisions eliminate coverage for specific conditions and items. There may be a detailed section within the policy that lists exclusions, but check throughout the policy in order to note whether an exclusion is implied by way the text is written. Remember that exclusions can also have exceptions. In fact, the omnibus clause in the policy that covered Bluffton University had five specific exceptions (and the court concluded that none of them applied). Endorsements. While exclusions can take away certain coverage, endorsements can add or modify coverage, revise the meaning of a definition or place further restrictions on the policy. They are generally found at the end of the policy and should have form numbers that correspond with information on the declarations page. Highlight forms changed by an endorsement and note the endorsement that makes the change.
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No matter what section of the policy is being examined, do the following in order to get a clearer understanding of coverage: If the policy makes a reference to another section, go to that section and read what it says in order to get an immediate understanding. Pay attention to these keywords: “and” and “or.” Let’s say the policy contains a list of conditions. If the word ‘and’ is used in a particular phrase, then that means all conditions listed must be satisfied in order for coverage to be given. If ‘or’ is used, than satisfying any one of the conditions listed will trigger coverage. Be aware of key words, phrases and terms that could change coverage. Terms such as ‘greater than’ or ‘must’ have specific meanings and imply specific boundaries. Remember that an insurance policy is first and foremost a legal and binding contract. As with any contract, a risk manager wants to make sure that his or her entity receives a fair deal and reasonable terms. By taking some additional time in order to review policy language, a risk manager can see through the illusions that these documents often present. Paree Roper is PRIMA’s industry specialist.
May/June 2011 | Public Risk
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Speedy Complaint Systems Picking Up the Pace May Open the Door to Liability
By Jeff Rogers
Local governments may once have been stereotyped as powerful and remote with the cry, “You can’t fight city hall.” Today, however, public officials are more likely to want their agencies to be seen as responsive to citizens and an easy place to do business. As a result, many public entities have instituted systems that make it simple to file a complaint, request a repair or notify someone of dangerous conditions. On the surface, the easy accessibility for telling public entities about problems is a positive development. However, a lack of follow-through to rectify those problems can lead to further issues and potential costs. To manage the risk that accompanies opening up the floodgates to complaints, public entities should be sure they are ready with a response system that is well matched to their complaint intake mechanisms.
Understanding Exposure to Liability Whether a complaint involves a pothole that may lead to an automotive accident, a weakened tree limb that may hit a pedestrian when it falls or an odor that may indicate leaking chemicals that are dangerous, officials at public entities have an obvious human interest in taking action to avoid injury and property damage. They also have a financial responsibility to protect their entity from the liability that may arise if a repair is not made. In some jurisdictions, public entities may have some degree of immunity from liability lawsuits. However, being informed about a hazardous condition can put an entity on notice. This may create an obligation to perform additional duties, including, but not limited to, inspecting a property to determine if a defect exists, repairing a property within a reasonable time and possibly warning the public of the dangerous condition until repairs can be completed.
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When agencies fail to meet these additional obligations, they may be pursued for liability for a loss arising out of a defective condition. Public entities should always consult with their legal counsel to understand the notice requirement and the duties that arise from having notice of defective conditions, within their local jurisdiction. To illustrate the problems that arise when a public entity receives notice but fails to take action about a hazard, consider the following example. An elderly woman fell down the courthouse steps because of a loose handrail. Although the public entity became aware of the problem through the first accident, no repair had been made before a second person grabbed the same loose handrail and also fell. Broken bones and medical complications eventually led to expensive medical bills—and litigation soon followed.
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Speeding Up the Complaint Cycle Rather than finding out about a hazard through an accident, more often a public entity learns about a problem from its citizens. In the past, it may have been necessary for citizens to drive downtown and make their complaints in person. Or they may have registered their complaint by mailing a letter or telephoning the appropriate department. They may even have approached a public worker on the street to deliver a verbal protest. Today, many public entities have recognized that citizens expect the same instant, online access they have to banks, stores and other services in their lives. Some cities have instituted 311 telephone numbers, which are centralized phone systems for citizens to communicate without having to know what department or person they need to speak with. Increasingly, the Internet and online technology are playing a role in the complaint process. In fact, some communities have adopted vendor services that let citizens report problems from their smart phones. These vendors provide technology to make the complaint process interactive, identifying the problem on a map, offering a place for other citizens to comment on the problem and reporting back when the repair has been made. At this technology’s simplest level of operation, a person armed with a smart phone can take a picture of a hazard, click on the vendor application and send a visual report off to the public entity. While these innovations support the concept of making government more responsive to citizens, they also add complexity to making sure complaints don’t fall by the wayside.
Creating a Solid Response System A public entity has any number of choices it can make as it organizes a system to respond to complaints. In general, the cornerstone to an effective process is having a single point of contact that is responsible and is held accountable for putting in motion the steps that will lead to the resolution of the complaint. To build a system around that single point of contact, a public entity should map a process that moves complaints, whether by letter, phone or digital means, quickly from the intake point to the responsible department. Key elements include: Logging a complaint as soon as it is received and immediately sending it to the responsible department. Having a method for prioritizing repairs so those hazards posing the greatest harm are taken care of quickly rather than chronologically.
Tracking repairs against established time-based targets to make sure the process is working.
To manage the risk
Getting back to the citizens who reported the problem to let them know the repair has been made.
opening up the
Once a complaint intake and response system is established, the public entity should consider using multiple methods for alerting citizens about how they can report problems. This can include inserts in mailers, postings on Web sites, signs in meeting places and coverage by local news media. As technology gives citizens more ways to connect with their public entities, meeting their expectations becomes more challenging. When it comes to responding to complaints, however, it is a challenge worth meeting, to both improve safety and reduce liability. Jeff Rogers is a senior risk control consultant for Travelers.
that accompanies
floodgates to complaints, public entities should be sure they are ready with a response system that is well matched to their complaint intake mechanisms.
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May/June 2011 | Public Risk
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Blazing the Trails of Risk PRIMA’s 32nd Annual Conference Preview June 5–8 | Portland, OR | Oregon Convention Center By Jennifer Ackerman, CAE
In June, risk managers will gather in Portland, Ore., for PRIMA’s 32nd Annual Conference. This year, attendees will be “blazing the trails of risk” at the only conference dedicated to risk management in the public sector.
WHAT’S NEW in 2011? This year’s conference has a number of new features that add value to each attendee’s educational experience. In conjunction with this year’s conference, PRIMA will offer a day-and-a-half review session to prepare participants to take ARM54 exam. The review session will take place on June 4-5. This is the perfect opportunity for attendees to combine the learning and networking opportunities of the conference with the chance to earn their ARM or ARM-P designation or RMPE certificate of completion. Testing will be available for the ARM54, ARM55, ARM56, and RMPE352 on Sunday, June 5, from 2:00-4:00 p.m. Preregistration is required. This year, PRIMA will offer a free post-conference workshop, The Role of Public Sector Risk Managers in Child Protection. The workshop will focus on the 9-1-1 Call Center Partner Program standard, recently endorsed by PRIMA, which sets forth best practices for handling 9-1-1
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calls involving missing and/or sexually exploited children. Presenter Peter Bellmio, senior policy advisor, Office of the President for the National Center for Missing and Exploited Children (NCMEC), will provide public sector risk managers with a detailed review of the standard, as well as training and technical assistance available at no cost from NCMEC. The four-hour workshop will address the nature of the problem, NCMEC operations and resources, and the role risk managers can play to ensure their entities have the tools necessary to increase the likelihood of a positive outcome when a child is in danger. PRIMA’s exhibit hall will have extended hours this year to allow attendees to spend more time with companies that understand the buying power of public risk managers. The exhibit hall will be open on Monday at 9:30 a.m. and Tuesday, with early hours starting at 7:00 a.m. Don’t miss out on the boxed lunch on Tuesday as well as a raffle drawings both days. This year’s conference draws nearly 100 exhibitors who have the products and services essential to risk managers.
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BUSY DAYS, BUSY NIGHTS PRIMA’s 2011 Annual Conference kicks off Sunday, June 5, with a welcome reception where attendees can network with old friends and make new ones. Monday morning starts two-and-a-half days of learning with PRIMA’s top-notch educational sessions broken up into eight tracks, including employee benefits/ human resources, enterprise risk management, legal and regulatory, management and administration, pooling, risk control, risk management, safety and loss control and school risk management. Each day opens with a general session showcasing keynote speakers with messages that will speak to the challenges that all risk managers face today. On Monday, Michael Jackson will present the Challenge of Change, which will leave the audience with an accurate assessment of exactly what to do and how to compete in the business world of today and tomorrow. On Tuesday, Mark Gwyn, director of the Tennessee Bureau of Investigation, will talk about how his commitment to get drugs off the street have put the TBI in the thick of efforts to eliminate high-level drug dealers.
On Wednesday, Michael Hingson, author and 9/11 World Trade Center survivor, will share his story and discuss the importance of teamwork and emergency preparedness. Attendees are invited to join PRIMA leadership in congratulating the winners of its yearly awards program, including the Public Risk Manager of the Year, James E. Huckaby, ARM-P. Other award winners scheduled to be announced during the awards luncheon on Monday are: • Outstanding achievement for a public risk management program; • Outstanding achievement for a public risk management product; • Outstanding achievement for a public risk management intergovernmental risk pool program or product; • Practitioner writer of the year for Public Risk magazine; • Article of the year for Public Risk magazine, and; • Chapter recognition awards. On Wednesday, PRIMA will hold its annual membership luncheon. During the luncheon, members will welcome PRIMA’s new president, Cindy Mallett, AIC, CWCP, ARM-P, risk manager for the City of Gainesville, Ga., as she is sworn-in by 2010-2011 PRIMA President Laura Peterson, JD, MPA. Peterson also will swear-in
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PRIMA’s 32nd Annual Conference Preview
Thanks to the 2011 Annual Conference Sponsors! Platinum
This year’s conference draws nearly 100 exhibitors who have the products and services essential to risk managers.
new directors Eddie Beecher, risk manager for the City of Pompano Beach, Fla., and Regan Rychetsky, ABCP, director of HHS Enterprise Risk Management and Safety for the Texas Health and Human Services Commission, as well as 2010-2011 president-elect, Dan Hurley, CSP, ARM-P, MS, senior director of risk management and safety for Norfolk Public Schools. Each day-long educational program is capped with an exciting peer-networking event. On Monday, join other risk managers for an afternoon reception in the exhibit hall. Tuesday brings PRIMA’s Night at the Museum. PRIMA’s Tuesday night event is always a highlight of the conference and this year promises to be no different. Attendees will head to the Portland Art Museum for a night of dining and dancing, PRIMA-style! On Wednesday morning, attendees can start their day off right with PRIMA’s Fun Run/Walk, to benefit the Oregon Food Bank.
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It’s not too late to register for public sector risk management’s premier conference! Don’t miss your chance to “Blaze the Trail of Risk”! See you in Portland!
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catastrophes, weather, hurricanes, life sciences, climat sk, brownfields, disposal sites, water intrusion, defects, roofing, landscaping, painting, concrete, bridges, tunnels, highways, roads, dams, crop rms, errors, omissions, interruptions, corporate assets, electronic media, broadcasters, publishers, media distribution, entertainment, generatin nits, foreign suppliers, privately held, publicly held, non-profits, mid-size, large-size manufacturing, foreign casualty, successor liability, discontinue roducts, spoilage, contamination, laser coverage, environmental, umbrella liability, satellites, exploration, production, distribution, electric, oil, ga ater, alternative energy, forgery, alterations, fraud, commercial crime, employee theft, executives, trustees, management, supermarkets, departmen ores, theaters, bowling alleys, casinos, logistical centers, multi-site, multi-national, partnerships, trusts, subsidiaries, equipment, commercial auto
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Why do we pay claims when it seems we’ve done nothing wrong? By Bradley York
Envision the following scenario. Your public entity recently underwent a significant round of layoffs. Though a difficult decision, the layoffs were handled in a systematic matter, focused on cost-cutting. Your human resources staff documented its layoff procedures and the correct processes were followed to the letter of the law. However, you’ve recently been hit with a discrimination suit by an angry former employee, alleging that the layoffs were based on race, religion or some other legally protected category. Luckily, you’ve invested in employment practices liability coverage meant to protect your entity against claims by workers that their legal rights as employees have been violated. So why is it that months later, you find your entity settling the lawsuit with the insured out of court. You may be asking yourself, “We’ve done nothing wrong— why are we settling?” Handling such claims is a key reason for having insurance, so that your entity doesn’t have to take a financial hit when there is a lawsuit to pay for. But it still may seem confusing as to why one claim over another may be settled out of court, even when it seems clear that there was no wrongdoing on your end.
Why are we settling? Deciding to settle a case is usually the result of a thoughtful decision-making process, considering all aspects of the initial incident, as well as the alleged claim. There are many different reasons why an organization may opt to settle, but here are some of the more prevalent ones.
May/June 2011 | Public Risk
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Why Do We Pay Claims When it Seems We’ve Done Nothing Wrong?
Documentation is also important when considering public entity employees, particularly any incidents of misconduct. Without a paper trail recording management reviews of staff performance over time, an entity can be left to blame for any misbehavior or incidents that arise based on an employee’s actions.
Evidence issues. Oftentimes, the reason for settling a claim is simply because proper evidence is no longer available at the time a case comes up for litigation. The reality is that litigation can occur years after the actual incident, long after evidence is gone or anyone can remember the details of the case. And evidence retention practices for law enforcement differ across the country, so you can’t depend on the police to guarantee that the material you need will be retained over the years until an actual court date. Poor documentation. In cases where public entityowned equipment is the culprit in a claim, maintenance documentation can prompt the need to settle. By failing to properly document the care of equipment, a plaintiff can allege that any malfunction causing injury was the direct result of a lack of maintenance. Documentation is also important when considering public entity employees, particularly any incidents of misconduct. Without a paper trail recording management reviews of staff performance over time, an entity can be left to blame for any misbehavior or incidents that arise based on an employee’s actions. Lack of training. In a tight economy, it seems that employee training is often one of the first things cut to save budget dollars. However, lack of proper training can expose a public entity to a host of costly liabilities that can far exceed the expense of any training program. Whether it’s a transit driver who is unaware of proper safety techniques or a police officer texting while driving, overlooking suitable training can increase the risk of a claim occurring and, ultimately, settlement costs.
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Public Risk | May/June 2011
Witnesses. The delay between an actual incident and the filing of a suit can unintentionally impact witness reliability. After all, witnesses are only human and after several years, sometimes even several months, the details of an occurrence may become fuzzy. In addition, the credibility of witnesses, and even defendants, is important to consider. All too often, prior histories and reputations can come into play in high profile cases involving public entities and the prosecution will look for any opportunity to leverage these in their case.
Public perception: The elephant in the room Likely one of the most common reasons behind settling a claim is to avoid negative public perceptions. Taxpayers and other constituents can be critical of how their tax dollars are used by public entities; so mounting a costly legal defense against a claim may not gain widespread community support. Additionally, local news reports of such cases can easily be sensationalized. Such stories draw attention and sell papers, so it’s only natural that reporters may frame such stories in a manner that is negative to a public entity. Public entity employees are often held to a higher societal standard than the everyday citizen. We tend to believe that a police officer or firefighter can do no wrong, when the reality is that they are just as susceptible to making errors as anyone else is. As a result of this perception, we tend to come down harder on these individuals when they do fall short in some way.
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It’s important that entities be proactive and consider how to resolve such matters before they arise. By thoroughly reviewing the entire incident-tracking process from start to finish, you can ensure that you are incorporating best What public entities can do to protect themselves It’s important that entities be proactive and consider how to resolve such matters before they arise. By thoroughly reviewing the entire incident-tracking process from start to finish, you can ensure that you are incorporating best practices for mitigating your risk of a claim or lawsuit. Establish protocol for gathering materials. Invest in a thorough information-gathering, interviewing and recording process for every incident that occurs. This isn’t restricted to after a claim is filed—this includes auditing all entity practices, from employee layoffs to training on proper safety techniques and establishing detailed procedures for recording and tracking them. In this way, your entity can be prepared should an incident ever occur. Focus on the evidence. Don’t neglect careful documentation of how you handled specific evidence. Unlike criminal cases, what’s known as the chain of custody or the chronological documentation of the paper trail related to evidence, is not standardized in civil cases. This means that every transfer of ownership, every analysis, every seizure of a piece of evidence must be well-documented; otherwise, the case could be compromised by allegations of tampering or misconduct.
on what is permissible to say. Following this suggestion can help minimize negative public perception or the impression that your entity is hiding something from the public. Mitigate risk by being proactive. The best way to avoid settling a claim is to avoid having any claims in the first place. By proactive risk management, you can help mitigate many of the common risks that face public entities. This includes detailed policies and procedures for the regular functions of a job, targeted employee training programs and regular assessment of staff awareness of potential risks.
practices for mitigating your risk of a claim or lawsuit.
Although your entity may end up settling claims where there appears to be no wrongdoing, settlement can sometimes be the best option. Many different elements come into play, from public perception to questions of evidence handling. The best way your entity can be prepared for and avoid such issues is to be vigilant about documentation and implement proactive strategies to circumvent risk in the first place. Bradley York is vice president of business development of OneBeacon Government Risks.
Don’t neglect the press. There’s no doubt that the media may become interested in a claim in progress against your entity. Rather than avoiding the press, it’s important to establish a procedure for handling inquiries and making sure all staff understands this protocol. Appoint one spokesperson to speak with the media and coach him/her
May/June 2011 | Public Risk
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PUBLIC ENTITIES Because the unexpected happens. For self-insured public entities, funding insurance premiums and finding adequate coverage can be complicated. CivicRisk has the solution. At CivicRisk Underwriters (CRU), our specialty is state of the art, broad excess casualty coverage for those public entities that are large enough to bear some level of risk. This typically includes municipalities, counties, states, special districts, public utilities and public transit districts, including rail.
For more information about how CivicRisk can help your public entity clients, contact us today. Tom Dultz tdultz@civicrisk.com (818) 660-1671 www.civicrisk.com
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Seven Habits of a Highly Effective Risk Information System By Lee Mashore
Public risk managers have a unique set of process and data management needs, which demand a highly specialized solution. For example, they need a system that can manage and analyze risk information across many agencies, identify problem areas and reduce risk at both the organizational and departmental level. To date, public risk managers have been a highly underserved segment of the risk and insurance market. When they went looking for a system, one single solution didn’t exist to meet all their needs. Most applications were either extremely expensive, designed for insurance companies or required extensive customization to meet their requirements. Historically, this left public risk managers with one of two options: 1) they could either spend significant time and resources to jury-rig a less-than-optimal solution or 2) they could piece together a conglomeration of point solutions and data management workarounds—both or a combination of these options could be costly and ineffective. Today, there are enterprise solutions specifically for public risk management, but how can organizations navigate the territory between a vendor’s marketing claims and a truly beneficial solution? In today’s complex world of information systems, there are essentially seven common “habits” or traits of a highly effective public risk information system:
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Public Risk | May/June 2011
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Habit 1: An enterprise solution to address all public risk management needs. In the past, public risk managers were forced to piece together multiple systems, databases and spreadsheets to meet their unique requirements. These disjointed platforms resulted in additional IT costs, inefficiencies and data errors. Separate solutions often required separate operating systems and hardware—and the more systems that were in place, the more difficult it was to maintain within the organization’s already complex IT environment. Since many applications didn’t speak to one another, it was difficult to keep information up-to-date; organizations had to invest additional funds in interfaces, so systems could exchange data. New enterprise solutions now encompass not only all public risk management needs, but also utilize Internet portals to accelerate communication with various departments and leverage middleware technology to more easily establish connections with third-party applications, when they must be used. Policy, claims and financial data stream in from brokers, underwriters, third-party administrators, nurse triage companies and accounting. As information is modified, it’s automatically synchronized across all connected applications.
Habit 2: Internet portals streamline data collection and departmental communication.
Portal technology notifies risk managers when updates have been submitted, so they stay current on schedules and arrange to change coverage when necessary. They can also track which departments haven’t responded and send automated reminders. Additional communication is also streamlined. For example, using online portals, departments can submit claims, request certificates of insurance and generate their own reports. Risk managers can fulfill requests in a timely manner and easily disseminate information, such as updates to procedures. By streamlining communication and providing immediate access to information, public entities empower departments to play a vital role in the risk management process.
Habit 3: Data reporting and analysis empowers sound risk management decisions. Public risk managers need to dig deep into their data to identify trends, high-risk areas and cost-saving opportunities. Traditionally, in-depth analysis was difficult to perform because risk managers had no way to effectively pull data from separate point solutions and effectively report data in a way that was meaningful. As a result, public risk managers unknowingly made decisions with incomplete or retrospective information.
Another challenge public risk managers face is working with respective agencies to optimize their overall risk and insurance programs. This involves timely, efficient communication, as well as streamlined collection and sharing of information. However, public entities traditionally lacked a technology infrastructure to support these functions.
With the proper risk management information system, data is updated, aggregated and normalized across processes and decision points. With sophisticated reporting and analysis tools, risk managers can better assist agencies in respective safety, loss prevention and risk control efforts—ultimately enhancing decision-making organization-wide.
For example at renewal time, public risk managers update their coverage requirements organization-wide and they must coordinate the arduous task of obtaining updated property and vehicles schedules from respective departments and likewise, assess appropriate premium or loss allocations. In the past, data collection was done using paper forms, manual submission and spreadsheets, so the process was time-consuming, labor-intensive and costly—not to mention fraught with data accuracy issues. Often times, public risk management required a large administrative staff to support operations.
For example, public entities can perform cross analysis— using loss development and training costs—to determine if they’re spending funds effectively to prevent future claims. Now, analysis can be performed in ways never done before, as it was previously too difficult to collate data manually. In addition, a centralized data platform minimizes the danger that crucial information will be inaccurate, left out or unavailable when making risk management decisions.
Today, an enterprise solution coupled with portal technology empowers effective data collection, communication and relationship management between risk management and the departments it serves. Instead of mailing forms, risk managers simply send an email reminding departments to login and update auto, property and payroll data. For example, a police department may have added more vehicles to its fleet or parks and recreation may have built a new skate park.
Today, there are enterprise solutions specifically for public risk management, but how can organizations navigate the territory between a vendor’s marketing claims and a truly beneficial solution? In today’s complex world of information systems, there are essentially seven common “habits” or traits of a highly effective public risk information system: Habit 1: An enterprise solution to address all public risk management needs. Habit 2: Internet portals streamline data collection and departmental communication. Habit 3: Data reporting and analysis empowers sound risk management decisions. Habit 4: Geo-mapping provides the “meta vision” to see risks in new ways. Habit 5: An ability to go mobile with safety and loss prevention. Habit 6: Identify and leverage opportunities for increased savings and efficiency. Habit 7: “Software as a Service” is a cost-efficient way to benefit from cuttingedge technology.
Habit 4: Geo-mapping provides the “meta vision” to see risks in new ways. Risks occur in time and space. As a result, geo-mapping has become all the rage. These tools enable organizations to alert staff “when” and “where” a loss has occurred on a geographic display. With immediate notification, public risk managers can immediately respond to injuries, manage claims, coordinate care and ultimately, get a better handle on costs. In essence, public risk managers have access to a visual command center or warboard.
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Seven Habits of a Highly Effective Risk Information System
Habit 6: Identify and leverage opportunities for increased savings and efficiency. Today, public entities are squeezed for funding. They can’t afford to do things the way they’ve always done them. An effective risk management information system will enable risk managers to operate smarter and with a greater understanding of the opportunities that exist within their organizations. Overall, public risk managers should look for solutions that manage and leverage data in ways that enable organizations to be more efficient, productive and save more money. In essence, a risk management information system should empower public entities to achieve more with less.
Data points are interactive; if they’re selected, additional details can be displayed regarding the claim, such as who was involved and how the injury happened. Powered by real-time data feeds, warboards can amass hundreds of data points on a display from various departments and obtain a global view of risk. Geo-mapping on a warboard has become both a strategic and tactical tool with many applications and far-reaching benefits in being able to visualize risk. For example, a public entity can map properties or employee density to view risk in relation to a catastrophic event, such as a storm or earthquake.
Habit 5: An ability to go mobile with safety and loss prevention. Safety surveys and onsite inspections are vital to ensuring that departments are following mandated safety protocols. Laws are in place to protect employees, as well as employers. In the past, however, surveys and inspections were a cumbersome process. Safety officers and loss prevention professionals often made visits to inspect buildings or worksites. They typically used forms and recorded results by hand; then they returned to the office to input data, run reports and send results to the departments they had just visited. Today, smartphones and mobile computing have streamlined the process. With a smartphone, site inspectors can bring up an electronic questionnaire and complete a mobile survey. They can take photos to attach to the final report. Survey results and digital images are wirelessly uploaded, so inspection reports can be printed while the auditor is still onsite. Often times, results are graphically displayed, so department managers can easily see where safety improvements need to be made. In summary, sites receive immediate results and have time to consult face-to-face with safety officers.
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Habit 7: “Software as a Service” is a cost-efficient way to benefit from cutting-edge technology. Software as a Service (SaaS) is a cost-efficient model that many public entities are now leveraging. For example, they can pay a small upfront implementation fee—avoiding large capital expenditures—and pay a monthly subscription as part of their operating costs. Since these systems are deployed over the Internet, public entities don’t have to invest in new hardware to support the latest, cutting-edge capabilities. Information is housed on powerful servers and the solution provider maintains a secure data site, complete with backup, redundancy and recovery plans, which many public entities can’t afford to develop on their own. In addition, SaaS vendors continually invest in and update their platforms, so applications have become increasingly more sophisticated and public entities reap the benefit of the latest features, functions and capabilities.
Make These Habits Your Own Public risk managers may have a unique set of system requirements, but today technology has caught up to effectively serve these needs. With the habits outlined in this article, risk managers have the guidelines and a systematic process to distinguish a true solution from marketing claims. If public entities can find a system that fits these seven traits, they’ll not only be able to show departments just why their risk management efforts are needed, but they’ll also provide confirmation through improved savings, reduced risks and enhanced safety—which most public entities need during today’s tough times. Lee Mashore is vice president of information technology at CHSI Technologies (www.chsitechnologies.com).
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Advertiser Index
Advertiser Index ACE USA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 21 Arthur J Gallagher. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 14 Aon Risk Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outside Back Cover CID Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 27 Civic Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 26 Genesis Underwriting Management Company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 2 Midlands Management Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 5 Munich Reinsurance America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 9 One Beacon Government Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover PMA Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 22 Protected Self Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .page 17 Safety National. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 10 States Self-Insurers Risk Retention Group, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover Travelers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . page 15 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!
May/June 2011 | Public Risk
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Member Spotlight
Texas School District Medical Care Panel Saves $1.2 Million Each month, Public Risk features a member who has gone above and beyond
T
he Dallas Independent School District (ISD), like many entities, grappled with rising workers compensation medical costs. In 2008, the district’s workers’ comp costs peaked at $7.2 million, with rising days lost and indemnity and medical costs increasing annually.
in a feature column titled “Member Spotlight.” Do you know someone who deserves recognition, has made a contribution or excelled in their profession? If so, we’d like to hear from
“Workers comp costs were up 58 percent from 2006 to 2009,” said Cheryl Johnson, risk manager. “Something had to be done.” The solution was for Dallas ISD to partner with Dallas County Schools through an interlocal agreement to develop a medial panel to provide workers’ compensation health care to Dallas ISD’s injured workers.
Once the panel was up and running, Dallas ISD saw immediate results. They were able to provide excellent workers’ compensation practitioners to achieve maximum return-to-work results; selection of medical providers is controlled by the member, which resulted in a cost decrease of 17 percent the first year and dispute resolution and review panels were created under the auspices of the interlocal agreement for faster response. “The bottom line is that we saved $1.2 million in one year and our days lost decreased by 48 percent,” said Johnson. “This is so important to the public sector because it saved our taxpayers money, which is better spent on education and other public services.”
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
Dallas ISD was able to partner with Dallas County Schools due to a 2006 ruling by the Texas Department of Insurance, which authorized government entities to contract directly with health care providers to provide medical benefits to injured employees subject to workers’ compensation. The authorization was granted by Section 504.53(b) of the Texas Labor Code.
or 703.253.1267.
“We conducted a viability study of using the 504 program in the Dallas-Fort Worth area,” said Johnson. “We were lucky that Dallas County Schools had the funding to hire a consultant to assist in setting up the model, contract with a company to manage the program and enter a shared services interlocal with us.”
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Public Risk | May/June 2011
Johnson points out that other public entities can create similar programs easily. “The Texas template for approval by boards or city councils has been developed,” she said. “Other states interested in lobbying their legislatures can learn a lot by following the process we used in Texas. We were successful in showing our legislators how the cost of workers’ compensation was taking away funding from the goals of our cities and schools.” Dallas ISD’s program was recently awarded PRIMA’s Achievement Award for programs. For more information, contact Cheryl Johnson at chjohnso@dallasisd.org.
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