The most common types of claims include workers’ compensation claims, employment related claims, construction defect and personal injury claims, and most recently cyber and data breach. Here are some examples of these types of claims and trends.
Employers are constantly faced with workplace claims, which have significantly increased over the past few years as a result of increased focus on the Me Too movement, racial justice, gender pay gap, LBGTQ rights, and impact of the pandemic. In a study by Advisen, companies with 100 employees can expect to receive an employment claim once every three years, with 56% of the trials resulting in plaintiff’s verdict and a median award of $317,000. We anticipate this number has increased since the study was completed several years ago.
To manage this evolving business risk, employers must create a proper training and document management system. Employers can also provide workplace training and require mangers to document all complaints and procedures in place. In addition, employers can establish clear reporting mechanism and revisit training, provide periodic training to all employees, and written guidance to managers on harassment and retaliation issues. It is important to have a clear and succinct handbook with consistent terms and procedures. All termination meeting should be properly conducted.
However, even the most diligent companies are still at risk. As a result, every company should be talking with their broker/agent about Employment Practices Liability Insurance (EPLI). EPLI may cover claims made by employees alleging discrimination, wrongful termination, harassment, and failure to promote.
Another group of common claims, and ones we have discussed with this industry on many occasions, are slip-and-fall and construction defect claims. Typically, a plaintiff will allege negligence of the employee or sub-contractor and/or claim poor quality of work, however, much of the headaches revolve around lack of written documentation to prove the obligations and service performed.
To protect and defend against such claims, following ANSI Industry Standards are a must. This should include maintaining industry certifications and training documents; clear and fair contract language; preseason site inspection records; in-event and post-event service documentation; photographs; and maintain all communications between entities involved in the services performed.
Further, contractors should maintain a heightened focus on their commercial general liability coverage and that of their service providers. Endorsements and exclusion abound and can significantly impact coverage. Josh will address this issue during his summit presentation in August.
Cyber and data breach claims are increasingly more common against all manner of business. There are federal data security and privacy laws that protect against cyber and data breach claims, including data breach notification law, HIPAA, Fair Credit Reporting Act, and SEC Guidelines. There is cyber liability insurance for loss prevention services, ransomware, third party claims, and response costs. Given the increase in filed claims, solid internal policies and practices help both protect and defend against the most common types of claims. These include: cyber security training; documentation; data breach response plan; and adequate insurance policies.
All of the above highlights why we call snow and ice professionals “risk managers.” Understanding the types of claims filed against a business and insurance coverage available places a business owner in the best position to be proactive about managing those risks.