2014 mala powerpoint

Assessing and Reducing Liability Risks as a Provider

2014 MALA ConferenceMay 7, 2014Daniel P. Hale, JD, CPCU, CRM, ARM,

CIC, LIC, AAI, AIS, API, AIC, AUVice President

MARSH & McLENNAN AGENCY, LLC • ACQUISITION COMPANY NAME 2April 11, 2023

OBJECTIVES

•Understand the role of risk management in your organization

•Be aware of the main areas that create exposure to loss.

•Identify the primary liability loss exposures and their corresponding risk management techniques.


AGENDA

•The Risk Management Process

Who manages risk? What risk are they managing?

•The Exposure Matrix

How do we handle risk?

•Liability Insurance Issues and Cases– Specific areas of liability exposure and control.


Reference Point

This symbols means that a sample document or reference point is available online at the following website.

Website: http://cambridgeunderwriters.com/mala/ Password: conference

Presenter’s Contact Information:

Daniel P. HaleVice-PresidentMarsh & McLennan Agency LLCE-Mail: [email protected] Direct Phone: 734-525-2429Fax: 734-525-0612Kelly Sparks, Account Manager: 734-525-2452 or [email protected]


The Risk Management Process

•Who?

Consider a fortune 500 company. How would your facility respond?

•What?–What risks are you trying to manage?

•Why?

MARSH & McLENNAN AGENCY, LLC • ACQUISITION COMPANY NAME

EXPOSURE AREAS(the “what”)

PROPERTY INCOME PERSONNEL LIABILITY

Buildings Contracts Owners Civil Lawsuits

Vehicles Funding Agencies Investors Regulatory actions

Equipment Customer Loyalty Key Employees Contracts disputes

Computers Centers of Influence

Specialize Skill

Data Good will Relationships

Furniture Branding

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The Risk Management Process


Sample Risk Management Mission Statement

Identify and evaluate risk and loss exposures to people, property, valued assets and reputation of our organization, its directors, employees, volunteers, consumers and affiliate organizations, in order to efficiently and appropriately control and finance those exposures, maximizing the organization’s overall mission and performance.


Profile: What are your strategies and objectives?

Review Goals: Establish and review goals related to the PREVENT process.

Expose Risk: Dig deep to uncover potential risks and vulnerabilities

Visualize Solution: Design a response to the exposed risk that controls and finances the exposure

Execute Plan: Train employees, document and develop new procedures and implement processes. Conduct Audits

Navigate Change: Monitor changes in the company and the industry and adjust the solution as needed.

Track Progress: Monitor progress through measurable results according to your goals.

Don’t Take Risk. Prevent It.


RISK MANAGEMENT MATRIX

Controls the loss or its causes

Controls payment for the loss


The Liability Loss Exposure


Core Liability Exposures

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Slip and falls, car accidents, slander,

negligence, wrongful death, medication

errors.

Work comp, FLSA, ADA,

COBRA, FMLA

Property leases, funding contracts,

resident agreements, vendor agreements,

independent contractors.


What does a lawsuit look like?

YOUR FACILITY NAME HERE, and

YOUR PERSONAL NAME HERE


Liability Exposure Areas

Some of the Liability Exposure Areas

Premises Liability Cyber Liability Statutory Liability

Operations Liability Regulatory Liability Fiduciary

Lease Liability Internet Liability Directors and Offices

Vicarious Liability Contractual Liability Employee Benefits

Professional Liability Products Liability Employment Practices

Automobile Liability Employers Liability Intentional acts liability


Analysis of Michigan Liability Verdicts


Analysis of Michigan Liability VerdictsMichigan liability verdicts summary by category from 1998 - 2014

17 year history of Michigan verdicts and settlements including verdict amount and summary of the facts in each case (62-pages)

EXAMPLE

McKelvey v Geren $ 4,388,302 In a 2009 lawsuit filed in U.S. District Court, Eastern District of Michigan, plaintiff James N. McKelvey asserted that he was subjected to verbal harassment based upon his disability, having suffered physical impairments in Iraq during active duty with the Army. Co-worker Bud Spaulding initiated the harassment during a lunch outing when he asked McKelvey why he used “crippled parking.” After that, McKelvey was called “cripple” on a regular basis, including by his supervisor, Alan Parks, who denied McKelvey’s requests for accommodations, such as a touch-screen laptop or voice-activated programming for his computer. McKelvey then submitted his resignation in February of 2007. Parks called McKelvey a “worthless, good-for-nothing cripple.” Also, two visiting National Guard officers, when inquiring where McKelvey was, were told by McKelvey’s coworkers, “So you know ‘cripple’ over there?” and, “We’re just waiting on the cripple.”


Leases

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WAIVER OF SUBROGATION

Landlord and Tenant will each look to its own insurance for recovery of any loss resulting from fire or other casualty. Landlord and Tenant release one another from such claims. Landlord and Tenant waive any right of recovery of insured claims by anyone claiming through them, by way of subrogation or otherwise, including their respective insurers. This release and waiver remains effective despite either party’s failure to obtain insurance. If either party fails to obtain insurance, it bears the full risk of its own loss.


Internet and Cyber

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Average per incident notification cost was $194 per record held.

Paper records make up approximately 11% of data breaches

39% of survey responders indicate negligent employees were the root cause of the data breach

85% of breaches took weeks or more to discover

92% of incidents were discovered by a third party


Internet and Cyber

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OCR levies $2 million in HIPAA fines for stolen laptops

“Covered entities and business associates must understand that mobile device security is their obligation. Our message to these organizations is simple: encryption is your best defense against these incidents."

Susan McAndrew, OCR's deputy director of health information privacy, April 23, 2014


Employment Law

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Laws that Govern the Employment Relationship

•The Americans with Disabilities Act

•The Family Medical Leave Act

•The Consolidated Omnibus Budget Reconciliation Act (COBRA)

•The Michigan Eavesdropping Statute

•The Michigan Elliott-Larsen Civil Rights Act

•The Michigan Bullard-Plawecki Employee Right to Know Act

•Title VI of the Civil Rights Act

•Title VII of the Civil Rights Act

•The Age Discrimination in Employment Act

•The Michigan Persons with Disabilities Civil Rights Act

•The Fair Credit Reporting Act

•The Fair Labor Standards Act

•The Older Workers Benefit Protection Act

•The Pregnancy Discrimination Act

•The Employee Polygraph Protection Act

•The Michigan Payment of Wages and Fringe Benefits Act

•The Michigan Driver Privacy Protection Act

•The Vietnam Era Veterans Readjustment Assistance Act of 1974

•The Rehabilitation Act of 1973The Michigan Covenant Not to Compete Statute

•The Minimum Wage Law of 1964

•The Internal Revenue Code

•Affordable Care Act

•The Federal Equal Pay in Employment Act

•The Michigan Crime Victims Right Act The Michigan Workers’ Disability Compensation Act

•The Michigan Occupational Safety and Health Act (MIOSHA)

•The Michigan Whistleblowers Protection Act

•The Michigan Right to Know Law

•The Michigan Youth Employment Standards Act of 1978

•The Michigan Employment Security Act

•The Michigan Sales Representative Act

•The Federal Worker Adjustment and Retraining Notification Act (WARN)

•The Employee Retirement Income Security Act (ERISA)

•The Federal Arbitration Act

•The Michigan Carrying Concealed Weapon Act of 2001

•The Michigan Repeat Offender Law

•The Michigan Disclosure of Employee Information Act

•The Michigan Ownership Liability Statute

•The Michigan Personal Responsibility and Work-Opportunity Act of 1996

•The Immigration Reform Act of 1987


Employment Law – Leased Workers

Sample leased or temporary worker agreement with staffing agency.

Special Report regarding leased workers and the uninsured claim potential.


Employment Law -FLSANumber of FLSA Court Decision 1990-2013


Employment Law - FLSANumber of FLSA Cases filed 1991 - 2012


Employment Law – FLSA2012 FLSA Cases by allegation


•Subcontractor misclassifications

•Fissured industries

•Proposed 2014-15 Budget– 18% proposed increase to Wage & Hour

Division’s budget– Enforcement budget proposed to increase by

$41m– Increase number of investigators by 300

DOL Enforcement Initiatives


•Collective actions have increased by more than 500% since 2002

•90% of all employment class actions are wage and hour cases

•DOL’s investigation budget since 2008 has increased by 50% since 2008– Over 1800 field agents

•DOL estimates that 70% of employers are violating the FLSA in some way

DOL Observations


On your way out to lunch one afternoon, you notice your employee, Gary, sitting in his car smoking something during his lunch break. The employee acts suspicious when they see you approaching. You notice the smell of marijuana in the air. You drive off and come back from lunch 30 minutes later. The employee is already back on their shift. When you ask the employee if they were smoke marijuana, they say yes and then provide you with a copy of their medical marijuana card. The employee tells you its for his glaucoma.

What should you do?

ADA Case Study – My glaucoma


a. Tell Gary he is fired because he was smoking marijuana on company property.

b. Remind Gary that drugs are not permitted on company property but since he is disabled and has a marijuana card, he is entitled to a reasonable accommodation.

c. Send Gary for drug testing.

d. Make an exception for Gary this time because he didn’t know the law, but tell him it wont be allowed in the future.

ADA Case Study – My glaucoma

Would your answer be different if he was not smoking on the property?


•Job Accommodation Network website has a database of possible job accommodations depending on disability http://askjan.org/

•FMLA Forms– http://www.dol.gov/whd/forms/index.htm

FMLA and ADA


You interview three candidates for a direct care position and hire a male applicant named Paul. He has 10 years experience, a degree in nursing, and was highly recommended. Paul reports for his first day of work, on-time. He is wearing a blonde wig, a pink nurses uniform, a small amount of makeup, his nails are painted, and he smells of women’s perfume. His appearance does not technically violate the dress code requirements of your employee handbook. He asked that you refer to him as Peggy and mentioned that he is planning on a permanent sex change operation next year.

What should you do?

EEOC Case Study – Paul and Peggy


a. Tell Paul he is fired because he lied on his job application when he said he was a male.

b. Tell Peggy its nice to meet her and show her where to punch in for her first day of work

c. Tell Paul that it is against company policy for males to dress as females while on work time.

d. Terminate the employee under his at-will employment status.

EEOC Case Study – Paul and Peggy

What if Paul wants to use the women’s restroom?


•Gay, Lesbian, Bisexual and Transgender Employees– Title VII prohibits discrimination based on sexual

stereotyping. EEOC gives priority handling for any claim alleging GLBT

issues.- Macy v Holder EEOC Decision- Veretto v Donahoe EEOC Decision- Castello v Donahoe EEOC Decision- Couch v Chu EEOC Decision- Brooker v Donahoe EEOC Decision

– EEOC Bulletin “Employer Best Practices for Workers with Caregiving Responsibilities”

EEOC Enforcement Initiatives


Sara is one of your direct care workers. She reports to work on time as scheduled but appears confused and lacks balance. Her eyes appear bloodshot and you think there might be a slight smell of alcohol. Based on this information you believe she is under the influence of alcohol or some other substances. When asked, the employee says that she is just really tired because she was up all night painting her new house. Your handbook allows you to send an employee for substance testing if they show signs of being under the influence. What should you do?

Case Study – The drunk employee


a. Ask the employee’s co-workers to keep an eye on her and let you know if she is acting strange.

b. Tell the employee that she should go home, sleep it off and come back after lunch.

c. Tell the employee to go straight to your dedicated drug testing center down the street and submit to a drug and alcohol test.

d. Terminate the employee under the at will status

e. None of the above

Case Study – The drunk employee


ASSISTED LIVING LIABILITY EXPOSURE ASSESSMENTEXAMINES EACH OF THE FOLLOWING CORE AREAS

Administration Activities

Life Safety Staffing

Premises Conditions Care Services

Food Service


ASSISTED LIVING LIABILITY EXPOSURE CONTROLSEXAMINES EACH OF THE FOLLOWING CORE AREAS

Administration: Loss control program, resident agreements, facility rules and policies

Activities: General, supervision, areas and equipment, conduct, physical condition, emergency procedures.

Life Safety: Building design and construction, fire prevention and control, emergency preparedness, emergency communications

Staffing: Employment practices, staffing levels, training, supervision

Premises Conditions: General, Outdoor areas, parking lots, entrances, exits, walking surfaces, changes of level, fighting, furniture, electrical outlets, water temperature, hazardous areas, inclement weather, security.

Care Services: Health status, fall management, wandering and elopement prevention, medication management, abuse prevention, third party caregivers

Food Service: General, supervision, facilities and equipment, suppliers, receiving, storage, food preparation, personal hygiene, food service, food allergies, scalds and burns.


ASSISTED LIVING AUTOMOBILE EXPOSURE ASSESSMENT EXAMINES EACH OF THE FOLLOWING CORE AREAS

Management Accident Reporting, recording and Analysis

Operations Maintenance and Inspection

Driver Qualification, Training, and Supervision


ASSISTED LIVING AUTOMOBILE EXPOSURE CONTROLSEXAMINES EACH OF THE FOLLOWING CORE LIABILITY AREAS

Management: Safety policy, driving, substance abuse, personal use of vehicles.

Vehicle maintenance and inspection: Accountability, recordkeeping, inspection

Operations: Employee vehicles, security Accident Reporting, Recording and Analysis: Preparedness, Accident Reporting, Accident Investigation

Driver qualification, training and supervision: Establishing a policy, driver history, reference checks, driver issues, driver training, documentation, driver supervision.

Other sources for risk management ides can also be found in your insurance applications.


CONCLUSIONS

#1. Safety and risk management must be supported at the highest levels in the organization.

#2. Risk management policy MUST be communicated to all staff on a daily basis in order to be most effective

#3. Self sustaining safety teams are an essential part of an effective risk management process.

#4. Incident and accident tracking must be promoted and rewarded.

#5. Promote continuous employee training on risk and safety issues.


RISK MANAGEMENT ACTION PLAN

Nominate employees and consumers to a safety and risk management team.

Examine incidents and accidents for the past five years in search of trends or gaps in management.

Collect feedback from staff on areas of concern regarding safety and risk.

Continue to meet regularly to strengthen the program.

42April 11, 2023

2014 mala powerpoint

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