Archive for February, 2016

How to Avoid Having Your Cyber Claim Denied

You no doubt have seen our admonitions about the need for businesses to secure cyber insurance policies that can help defray the costs of an attack on your network or a theft of your employees’ or clients’ personally identifiable information.

Businesses are faced with increasing threats and cyber criminals are constantly working to devise new ways to infiltrate organizations’ databases and extract information or find some way to monetize their hacks.

Cyber insurance can help your business recover from these events, but as with all insurance, there are risks that are covered and those that aren’t – and you often will have a certain amount of time to file a claim once you’ve incurred damage.

Your claim may be denied if you file too late, don’t understand your coverage, don’t understand your exclusions or don’t get the insurance company involved early enough, according to the insurance news website PropertyCasualty 360.

In order to best ensure that your claim gets paid, you should do the following:

 

  1. File your claim on time

Most cyber policies are written on a “claims made” basis, meaning they will only cover claims that are made when the policy is in effect. If someone files a claim against your company after the policy expiration, it would likely be rejected.

Some policies may include language that allows claims to be made for a few months after the policy expires, but not all policies contain this language.

Also, if your organization experiences a cyber event that may eventually lead to a claim, it’s important that you notify your insurer during the policy period. This is really important because if you fail to alert the insurer about it early in the process, they may deny the claim.

You need to communicate to your staff (particularly any information technology personnel) that they need to alert management about any suspicious activity on your networks. Make sure that you create a policy for staff to report all suspicious activity so that it can be investigated further to see if it merits reporting it.

 

  1. Understand the depth of your coverage

Because cyber policies are a relatively new phenomenon and continuously evolving, coverage will often vary from insurer to insurer.

It’s important that when purchasing a policy that you sit down with us to discuss your exposures (such as if you store client credit card information on your servers). This can help us find the right coverage for your organization.

Coverage will vary depending on the type of business you are running, the technology you are using and what data or company intellectual property you want to protect.

Some policies will also require that you have specific protocols and software in place to reduce the chances of your data being hacked. For example, policies will require that the policyholder applies security patches, uses encryption technology and has a secure-socket layer to protect credit card data.

If you fail to have this in place when your policy is in effect, the insurer may reject your claim if your systems are breached.

Other areas that cyber policies will often differ on include:

  • Paying for any potential legal costs after a breach.
  • Paying for tools to remediate any exposure.

 

  1. Understand what’s not covered

All insurance policies have exclusions, and cyber policies are no different. There are many exclusions in cyber policies, but again, they vary from insurer to insurer. Examples of exclusions include:

  • If your data is compromised when sharing it with a vendor, such as a payroll provider.
  • If you have a system pipeline into a client’s network and the network is hacked.
  • Fraudulent entry into certain parts of your network systems.
  • Patent or copyright infringement.

 

Again, it’s crucial that you read your policy before signing and that you evaluate whether any existing or future contracts with vendors or clients fall outside the policy’s coverage area.

 

Two of the major areas of coverage you may want to look for in exclusions are:

  • Will the policy cover data that is stored outside of your network, either on the cloud or on a vendor’s network?
  • Will externally generated data be covered if a breach occurs within your system?

 

  1. Get the insurer involved early

When in doubt, reach out to us or the insurance carrier if you think you’ve had a breach. Even if it’s just asking questions or trying to clear up your uncertainty, it’s better to contact the insurance company so that the event rises to its radar.

It’s better to reach out early because it will give the insurer a chance to investigate the matter and determine if there has been any exposure.

This will give you peace of mind that you will be protected should the matter rise to the level of a genuine claim.

The worst thing you can do is to wait until after you’ve started receiving complaints from customers, vendors or regulators. At that point your insurer will have a much more difficult task on its hands.

Getting the insurer involved early will let it get ahead of the claim, which makes managing it easier – and it can limit the amount of fallout.

Diabetes Wellness Programs Can Boost Productivity, Reduce Expenses

Diabetic patient doing glucose level blood test using ultra mini glucometer and small drop of blood from finger and test strips isolated on a white background. Device shows 115  mg/dL which is normal

Physicians and employee health experts are increasingly recommending that employers include diabetes screening, prevention and management in their company-sponsored wellness programs.

Diabetes – known as the “silent killer” – afflicts more than 29 million Americans, or 9% of the population.

Type 2 diabetes – or “adult-onset diabetes” – accounts for about 90% to 95% of all diagnosed cases of diabetes. Type 2 diabetes is associated with older age, obesity, family history of diabetes, history of gestational diabetes, impaired glucose metabolism, physical inactivity, and race/ethnicity.

The fallout from the disease has a significant impact on businesses as it can lead to stress, depression, and a number of other health problems, including cancer, stroke and heart problems. That in turn leads to lost productivity for you as well as “presenteeism” – or the dilemma of a worker being at work but not being productive.

Medical costs and costs related to time away from work, disability and premature death that were attributable to diabetes totaled $245 billion in 2012, according to the U.S. Centers for Disease Control. Of that total, $69 billion was due to lost productivity.

With these statistics in mind, it’s imperative that employers help their workers manage their diabetes. Helping them get diabetes under control or helping them avoid developing diabetes can keep your productivity strong, reduce your workers’ comp claims and also chip away at your health insurance expenses thanks to lower premiums.

 

Diabetes means decreased productivity

Of the roughly $69 billion that U.S. employers lost in 2012 from decreased productivity due to diabetes:

  • $21.6 billion was from the inability to work as a result of diabetes.
  • $20.8 billion was from presenteeism.
  • $18.5 billion was from lost productive capacity due to early mortality.
  • $5 billion was from missed workdays.
  • $2.7 billion was from reduced productivity for those not in the labor force.

 

What you can do

The Integrated Benefits Institute during its Annual Forum in February held a session on managing diabetes in the workplace and highlighted what some employers are doing to educate their workers, including how to manage diabetes:

  • The San Francisco Municipal Transportation Agency has partnered with the American Diabetes Association to deliver educational seminars on diabetes to its workforce.
  • The agency also offers as part of its diabetes program health risk and orthopedic assessments, glucose and cholesterol screenings, nutritional counseling, exercise classes and a walking club. (Incidentally, since the transport agency’s wellness plan provider initiated the diabetes program, its workers’ comp claims have also fallen.)
  • Caterpillar, Inc., found diabetes to be one of its primary cost drivers, so it now provides incentives for employee risk assessments and care management. For example, half of the employees in its diabetes management program reduced their A1C levels (a measure of diabetes control), while 96% reported measuring these levels regularly and 72% reported meeting recommended activity levels.
  • The City of Asheville, NC, used local pharmacists to coach employees on how to manage diabetes. More than 50% of those in the program experienced improved A1C levels, and the number of employees with diabetes that achieved optimal levels had increased.
  • Vanderbilt University expanded a pilot program of intensive exercise and nutrition that helped employees with diabetes improve cholesterol and blood sugar. About 25% of the employees were able to stop taking all of their medications.
  • The Ohio Police and Fire Pension Fund works with United Healthcare to offer its employees access to diabetes prevention and control programs. Employees voluntarily participate in worksite health screenings. Those who have pre-diabetes can attend YMCA-led diabetes prevention programs either at work or in the community.
    Those with diabetes can participate in offsite programs to help them better control their diabetes. The fund has incorporated these programs into its overall wellness initiative. In the first year of the program, 68% of participants in the program lost 5% or more of their total body weight.

 

If you would like to know more about educating your employees about diabetes and helping those with pre-diabetes or diabetes manage their condition, call us.

 

 

Cumulative Trauma Claims Rising Fast

carpal tunnel

A new and costly trend is affecting workers’ compensation as more cases involve what’s known as “cumulative trauma” – or injuries that develop over an extended period of time from repetitive or continuous motions.

Often these injuries are due to excessive wear and tear on tendons, muscles and sensitive nerve tissue that can leave a worker unable to perform their job due to pain. They can arise in any profession where a worker performs the same motion over and over again.

Interestingly though, many of the new cases are being filed after employees are fired and they are primarily being filed in Southern California.

A report by the Workers’ Compensation Insurance Rating Bureau of California, the “Analysis of Changes in Indemnity Claim Frequency – January 2016 Updated Report,” found that cumulative trauma cases accounted for 18% of indemnity claims in 2014, up from less than 8% in 2005. The percentage has steadily increased over the past decade, the Rating Bureau found.

According to the agency, the growth in cumulative injury claims beginning in 2009 has been concentrated in claims involving more serious injuries and multiple injured body parts.

The WCIRB, in its “Cumulative Injury Claim Survey” in 2015, noted that the median time before a claim is reported is 79 days from the date of injury.

Also, according to the WCIRB, 40% of cumulative trauma claims are filed after a worker is terminated. Of those cases, a whopping 98% are litigated and 90% are in Southern California.

These post-termination cumulative injury claims were much more likely to involve multiple insurers, psychiatric injuries or multiple body parts, according to the Rating Bureau.

The Bureau also noted that insurers denied 63% of cumulative trauma claims as to all issues (multiple body parts, for example), and an additional 9% were denied in part.

Another sobering bit of news is that most cumulative injury claims involve attorney representation or multiple body parts, and these proportions have increased over the last several years, while the proportion involving a specific claim component, psychiatric injury or sleep disorder has declined.

Approximately 10% of claims that involve some time away from work are estimated to be reported late (up to 18 months after an insurance policy inception), compared to less than 2% for 2007. A significant proportion of these late-reported claims are for cumulative injury claims, which are approximately four times as likely to be reported late as non-cumulative injury claims.

According to the study:

  • 30% of cumulative trauma claims involve multiple body parts
  • 7% involve the lower back
  • 2% involve body systems
  • 7% involve the wrist
  • 1% involve a shoulder
  • 9 % involve multiple upper extremities
  • 9% involve the hand
  • 4% percent involve hand and wrist
  • 6% involve knees

 

What you can do

Ergonomics – the science of adjusting the job to fit the body’s needs – can prevent cumulative trauma, also known as repetitive stress injuries (RSIs) in workplace safety parlance.

While in some cases redesigning the workplace is the best way to prevent RSIs, often many simple and inexpensive remedies will eliminate a significant portion of the problem.

For instance, providing knives with curved handles to poultry workers, so they won’t have to unnaturally bend their wrists; taking more frequent short breaks to rest muscles; providing lifting equipment, so nursing home workers won’t strain their backs lifting patients by themselves; or varying tasks to break up the routine of activities.

One large airline’s flight reservation facility, with 650 employees, had 250 cases of RSIs over a two-year period. An alarming 30% of these cases resulted in surgery.

The company took some simple steps to reduce the number of RSIs, including hiring an ergonomist to redesign the workstations, developing work/rest regimens, and eliminating electronic monitoring that included disciplinary action based on productivity, among other actions. Since then, the incidence of RSIs has dropped, underscoring the lesson that ergonomics can prevent RSIs.

A nationally known poultry producer instituted an ergonomics program and after two years its workers’ compensation claims had fallen to $1 million a year, compared to $4 million prior to the program.

In one facility, days missed due to cumulative trauma disorders declined from 552 to 24 per year, and days of restricted work went from 1,717 per year to just 48.

EEOC’s Data Collection Proposal Could Spike Litigation against Employers

equal pay

A new proposal by the U.S. Equal Employment Opportunity Commission to collect pay data from all organizations with more than 100 employees would likely open up employers to further litigation and regulatory actions.

The EEOC says it wants to use this data to identify areas of possible pay discrimination. But this fresh trove of data would likely lead to litigation by employees who feel they are underpaid compared to their colleagues, and to administrative actions, according to employment law attorneys.

The commission already uses so-called EEO-1 reports to collect demographic data about employers’ workers, such as race, ethnicity, sex, and job category of employees. Under the proposal, starting in September 2017 it would also gather data on pay ranges and hours worked.

The EEOC and the Department of Labor would use this data to identify pay disparities across industries and occupations, and strengthen federal efforts to combat pay discrimination.

The agencies would also use the information to assess complaints of discrimination, focus agency investigations, and identify pay disparities that it could probe more deeply.

Under the proposed regulations, employers with more than 100 workers and who file the EEO-1 forms would be require to include on the revised form:

  • Total W-2 earnings.
  • Aggregate W-2 data in 12 pay bands (pay ranges) for the 10 EEO-1 job categories. Employers will count and report the number of employees in each pay band.
  • The total number of hours worked by the employees in each pay band. The EEOC intends to use this data to analyze pay differences while also taking into account the differences in hours worked, as well as accounting for part-time work. (Note: The EEOC made a point of saying it doesn’t want data about specific employees, and that the data will be kept confidential.)

 

EEOC investigators would analyze W-2 pay distribution within single organizations and compare that data to aggregate industry or metropolitan area data.

 

Employers react

Already there has been pushback from employer groups about the administrative burden this would put on businesses. And some have voiced concern that data could be misconstrued as it fails to take into account the subjective factors influencing pay, such as experience and skill.

According to a new report in Bloomberg BNA, the EEOC’s assurance that it will keep employers’ pay data confidential doesn’t necessarily mean it will. It interviewed one labor law attorney who said that the data could be subject to Freedom of Information Act requests.

There are also “serious questions” about relying on the W-2 data, as pay could be influenced by shift differentials, an employee’s willingness to work overtime and other factors, Greg Keating of Boston-based Choate, Hall & Stewart L.L.P. said.

An employee’s W-2 form “doesn’t tell the whole story by any means,” he said, adding that pay differences within pay bands also can occur for many reasons that have nothing to do with gender or race bias.

So, the data on which the EEOC intends to rely is “quite suspect” as an indicator of any unlawful practice, Keating said.

Another attorney, Stanley Pitts, a partner with Honigman Miller Schwartz & Cohn L.L.P. in Detroit, told Business Insurance magazine that the EEOC is most interested in probing higher-paid categories and “trying to look at the ‘glass ceilings’ for gender or pay discrimination.”

 

The takeaway

At this point, it’s unclear how the EEOC might use this data, but employers can nonetheless take some preemptive action.

The law firm of Thompson Coburn LLC in a recent blog recommends that employers with more than 100 workers examine their payrolls to identify any inadvertent pay differences and to compare the pay rates of similarly situated employees when changing workers’ salaries.

The law firm also recommends that employers that currently must submit EEO-1 reports conduct self-audits of their payrolls to identify any areas where they could be vulnerable to litigation for unequal pay practices.

The public has until April 1 to submit comments on the proposed rules.

 

 

How to Avoid Having Your Cyber Claim Denied

cyberattacker

You no doubt have seen our admonitions about the need for businesses to secure cyber insurance policies that can help defray the costs of an attack on your network or a theft of your employees’ or clients’ personally identifiable information.

Businesses are faced with increasing threats and cyber criminals are constantly working to devise new ways to infiltrate organizations’ databases and extract information or find some way to monetize their hacks.

Cyber insurance can help your business recover from these events, but as with all insurance, there are risks that are covered and those that aren’t – and you often will have a certain amount of time to file a claim once you’ve incurred damage.

Your claim may be denied if you file too late, don’t understand your coverage, don’t understand your exclusions or don’t get the insurance company involved early enough, according to the insurance news website PropertyCasualty 360.

In order to best ensure that your claim gets paid, you should do the following:

 

  1. File your claim on time

Most cyber policies are written on a “claims made” basis, meaning they will only cover claims that are made when the policy is in effect. If someone files a claim against your company after the policy expiration, it would likely be rejected.

Some policies may include language that allows claims to be made for a few months after the policy expires, but not all policies contain this language.

Also, if your organization experiences a cyber event that may eventually lead to a claim, it’s important that you notify your insurer during the policy period. This is really important because if you fail to alert the insurer about it early in the process, they may deny the claim.

You need to communicate to your staff (particularly any information technology personnel) that they need to alert management about any suspicious activity on your networks. Make sure that you create a policy for staff to report all suspicious activity so that it can be investigated further to see if it merits reporting it.

 

  1. Understand the depth of your coverage

Because cyber policies are a relatively new phenomenon and continuously evolving, coverage will often vary from insurer to insurer.

It’s important that when purchasing a policy that you sit down with us to discuss your exposures (such as if you store client credit card information on your servers). This can help us find the right coverage for your organization.

Coverage will vary depending on the type of business you are running, the technology you are using and what data or company intellectual property you want to protect.

Some policies will also require that you have specific protocols and software in place to reduce the chances of your data being hacked. For example, policies will require that the policyholder applies security patches, uses encryption technology and has a secure-socket layer to protect credit card data.

If you fail to have this in place when your policy is in effect, the insurer may reject your claim if your systems are breached.

Other areas that cyber policies will often differ on include:

  • Paying for any potential legal costs after a breach.
  • Paying for tools to remediate any exposure.

 

  1. Understand what’s not covered

All insurance policies have exclusions, and cyber policies are no different. There are many exclusions in cyber policies, but again, they vary from insurer to insurer. Examples of exclusions include:

  • If your data is compromised when sharing it with a vendor, such as a payroll provider.
  • If you have a system pipeline into a client’s network and the network is hacked.
  • Fraudulent entry into certain parts of your network systems.
  • Patent or copyright infringement.

 

Again, it’s crucial that you read your policy before signing and that you evaluate whether any existing or future contracts with vendors or clients fall outside the policy’s coverage area.

 

Two of the major areas of coverage you may want to look for in exclusions are:

  • Will the policy cover data that is stored outside of your network, either on the cloud or on a vendor’s network?
  • Will externally generated data be covered if a breach occurs within your system?

 

  1. Get the insurer involved early

When in doubt, reach out to us or the insurance carrier if you think you’ve had a breach. Even if it’s just asking questions or trying to clear up your uncertainty, it’s better to contact the insurance company so that the event rises to its radar.

It’s better to reach out early because it will give the insurer a chance to investigate the matter and determine if there has been any exposure.

This will give you peace of mind that you will be protected should the matter rise to the level of a genuine claim.

The worst thing you can do is to wait until after you’ve started receiving complaints from customers, vendors or regulators. At that point your insurer will have a much more difficult task on its hands.

Getting the insurer involved early will let it get ahead of the claim, which makes managing it easier – and it can limit the amount of fallout.

Business Interruption Claims Grow in Number and Cost

Print

As the world becomes more interconnected and natural disasters increase in frequency, more firms are dealing with costlier and costlier business interruption losses.

Business interruptions were the top risk to organizations cited by risk managers surveyed in the report, “Global Claims Review 2015: Business Interruption In Focus,” from Allianz Global Corporate & Specialty. The study looked at more than 1,800 business interruption claims and found that they resulted in average losses that were greater than the actual property damage.

The report, which looked at claims trends between 2010 and 2014, found that the average cost for a business interruption insurance claim had grown during that period to $2.38 million. That’s 36% higher than the $1.75 million average for the corresponding direct property damage loss.

Incidents such as the port strike in Los Angeles in 2015, the 2011 floods in Thailand (which was the biggest global supply chain disruption in history) and the recent explosions at the Chinese port of Tianjin, had significant impacts on a variety of business sectors, including manufacturers, retailers and wholesalers.

The report should be a wake-up call to businesses of all sorts that it’s not only localized or internal issues (such as machinery breakdowns and fires) that can cause a business to seize up, but also far-afield events.

It’s imperative for businesses to have contingency plans in place for a variety of probable interruptions.

“This growth in BI claims is fueled by increasing interdependencies between companies, the global supply chain and lean production processes,” said Chris Fischer Hirs, CEO of Allianz Global Corporate & Specialty.

“Whereas in the past a large fire or explosion may have only affected one or two companies, today losses increasingly impact a number of companies and can even threaten whole sectors globally,” he added.

 

Top causes of business interruption loss by value (2010-2014)

  1. Fire and explosion
  2. Storm
  3. Machinery breakdown
  4. Faulty design/material/manufacturing
  5. Strike/riot/vandalism
  6. Cast loss (entertainment)
  7. Flood
  8. Collapse
  9. Human error/operating error
  10. Power interruption

 

Destructive example

The Tianjin port explosion destroyed warehouses and production facilities, affected a nearby railway station and residential structures, and destroyed vehicles and shipping containers in the port.

Confirmed insurance industry property losses to date are more than $2 billion, but when business interruption and contingent business interruption losses are finally calculated, Allianz Global estimates another $1 billion will be added to the total. There is usually a delay of up to 18 months for business interruption claims to settle.

 

The newest threat: cyber

While cyber risk has not entered the top 10 causes of loss, cyber insurance claims have produced business interruption claims, including instances where hackers took a French television station off the air and, in another event, hackers grounded 10 planes after launching a denial-of-service attack against a Polish airline.

Cyber events don’t have to be caused by hackers. Often human error is to blame, such as when the New York Stock Exchange shut down for 3.5 hours in early 2015.

“Awareness of the potential for cyber- and technology-related BI claims, in particular, has been increasing and is likely to become a feature of insurance claims in the not-too-distant feature,” the report states.

Cyber attacks are one form of peril that can disrupt business operations without associated physical damage.

“Perils such as a cyber-attack, strikes and industrial action, infectious disease outbreaks, power outages, and even solar storms, could potentially cause large losses for companies without damage to property,” Joachim Hufenreuter, Allianz Global’s property claims specialist, said.

 

What can you do?

While many Fortune 500 companies have business continuity plans and supply chain risk management programs in place, few small and mid-sized businesses have them.

Fortunately, with some effort and time, you can put such contingency plans in place for your organization even if you don’t have a risk manager on the payroll.

The best way to start is to analyze your business processes, examining what’s required during each step of your operations. Start by conducting a detailed risk assessment of your supply chain risks, in order to identify and plan an effective response integrated into the overall business continuity plan.

 

Consider how you would handle all conceivable perils, including:

  • Machinery breakdowns,
  • Fire in your facility,
  • Natural disasters that keep you from receiving products or materials, or keep you from delivering your products,
  • A supplier goes bankrupt or has their own fire,
  • Your computer system crashes or you lose essential data.

 

To identify all of your risks, you need collaboration among different parts of your organization, including purchasing, logistics, product development and finance. The key is to identify all of your key suppliers, as well as alternative suppliers should one not be able to deliver.

 

Also, how would you continue operations if your own facilities were affected by an outage from a fire, machinery breakdown or other event?

 

Insurance

Finally, you should secure business interruption insurance, which can pay for lost revenues that result from an event at your facility. Also, contingent business interruption insurance would cover an event outside of your facility, such as at a supplier or some other supply chain disruption.

Call us today for an analysis of how you can manage your supply chain risks and how business interruption coverage can help your organization.

Identifying Problem Workers’ Comp Claims, Fraud with Predictive Modeling

predictivemodeling

With decades of information in their databases, many insurers have started using those statistics to their advantage to intervene earlier in problem claims and to identify potential fraud.

With years of data to rely on, insurers have identified certain triggers that can indicate that a claim may require additional intervention and more hands-on management. The predictive modeling program will alert a claims adjuster when it identifies certain parameters or events.

This early identification of problem claims is helping employers and insurers achieve better outcomes for injured workers, as well as save money and time. As the trend continues, it should help reduce claims costs by eliminating more fraud and also lower the cost of some claims and reduce the time some injured employees are away from work recovering.

Conventional wisdom in workers’ comp is that 20% of the claims account for 80% of the losses. Efforts such as early claims reporting, medical case management and return to work have long proved essential for reducing claims.

Predictive modeling aims to improve the ability of insurers to identify claims that require early intervention.

Insurance predictive modeling applies statistical techniques and algorithms on insurance and claims data to develop variables that predict the likelihood of a particular situation (like a worker staying off work for longer than average).

While predictive modeling has been successful used for years by automobile insurers, it’s been slower to catch on in workers’ comp, particularly because it requires multiple data sets for which data availability can be scarce.

Predictive modeling begins with the first notice of loss and then continues to monitor for certain trigger points and specific actions during a claim’s lifecycle.

In the case of a potentially fraudulent claim, some of these could include the number of prior injury claims submitted by a claimant and the amount of time that an allegedly injured claimant is out of work.

 

Employer tackles medical costs

Supermarket chain Ahold USA, a self-insured employer, started using predictive modeling in early 2012.

Ahold’s model uses claim characteristics, medical transaction details, and other data sources to identify factors that are predictive of higher claims costs.

Some of the indicators the company uses include multiple visits to doctors and the use of certain prescription drugs.

The model then prioritizes claims that need special handling and medical case management. This helps injured employees receive appropriate medical care to reach maximum medical improvement and return to work sooner.

The company’s predictive modeling can indicate whether a claim has the propensity to develop adversely. It can also be used to evaluate the likelihood that a claim will result in litigation.

It may also provide the ability to identify workers’ compensation claims with a greater likelihood of surgery. Such tools allow adjusters to develop case strategies at first notice and gain control over the claim as it progresses.

The results for Ahold have been positive, resulting in a lower workers’ comp expenditures in “low seven digits.”

 

Insurer birddogs fraud faster

National insurance company Chubb Corp. has been using predictive modeling for both its workers’ comp and automobile claims.

At Chubb, predictive modeling begins with the first notice of loss and then continues to monitor for certain trigger points and specific actions during a claim’s lifecycle, such as the number of prior injury claims submitted by a claimant and the amount of time that an allegedly injured claimant is out of work.

The model flags claims based on patterns that have historically proven fraudulent and patterns that the claims adjuster may not detect.

If a claim is flagged, the adjuster can investigate further and/or monitor the claim. If certain warning signs appear, the claim is referred to Chubb’s insurer’s special investigation unit. At that point the SIU can work with the claims adjuster to investigate further.

Before predictive modeling at Chubb, it could take up to 180 days to spot potentially fraudulent workers’ comp claims and assign them to the SIU. Now that number is down to six days.

Also, predictive modeling has led to a significant increase in accepted referrals to the insurer’s SIU. As a result, the number of investigation days has decreased, and the company has achieved significant cost savings.

 

The Next Wave in Workplace Safety: Wearables

smart cap

As our workplaces and operations continue to evolve, the next frontier is wearable technology for workplace safety.

Some companies have started testing various types of wearable technology to reduce injuries in a number of industries, including oil fields, construction sites, mines, power plants, shipyards, warehouses, manufacturing, aviation and logistics.

Hands-free wearables can be employed to monitor workers’ vitals along with their exposure to harmful elements and chemicals, as well as their proximity to dangerous areas in the workplace.

And new technology is being developed that can collect data on the job site and detect changes in the work environment and the condition of equipment and machinery. The devices are designed to alert workers wearing the gadgets to any problems.

Wearable devices can provide safety alerts and prompts to employees in the field, remind workers of specific safety procedures when conducting different routines, and even enable an injured worker to reach out for help.

In this issue we explore some workplace wearables that are designed to reduce workplace injuries.

 

One-touch SOS alert

Matrix Medical Network, which provides in-home care services, is using wearables to help its 500 employees send out a distress call if they are at risk or threatened.

The company is using a system sold by AlertGPS to provide one-touch SOS alerting. If an employee in the field feels at risk or threatened, a simple touch of a button will instantly alert authorized personnel to the emergency.

Since the system uses GPS, authorized personnel are able to know exactly where the employee in distress is located.

The wearable technology provides additional safety features such as predator alerts, so if a staff member is scheduled to work near the home of a registered sex offender, he or she will be alerted right away.

AlertGPS also lets the company send mass notifications to all of its workers, if needed.

No dunce caps here

Australian mining giant Rio Tinto issues its dump truck drivers a wearable called the SmartCap.

It looks like a baseball cap, but it has a twist: It can conduct regular EEG tests on the wearer to gauge the worker’s alertness.

If it senses that a truck driver’s mind is approaching something called “microsleep” – the feeling you have if you are close to dozing off behind the wheel – the SmartCap will send out an alert.

The product’s applications are not limited to the mining industry, and it can be used in any production environments, trucking and for a company’s fleet drivers.

Fatigue is a major contributor to workplace accidents and deaths, so a device like this would be appropriate for any workplace in which employee alertness is critical to their safety and productivity.

 

The gas detector

Marathon Petroleum teamed up with Accenture in 2011 to develop the Accenture Life Safety Solution, a “wireless-enabled multi-gas detection system” that helps protect workers in potentially hazardous situations.

Employees wear a single, multi-gas detector (within 10 inches of their breathing zone) that is able to detect a number of gases, including:

  • Hydrogen sulfide
  • Carbon monoxide
  • Lower-explosive-limit (LEL) hydrocarbon gases
  • Sulfur dioxide
  • Nitrogen dioxide

 

The device combines Wi-Fi and location-based technologies with gas detectors. The combination enables safety and operations managers to remotely monitor workers.

The company says that because its employees knew their safety was being monitored continuously – no matter their location – they had a greater sense of confidence and security.

In addition, Marathon reported cost savings resulting from its implementation of the wearable tech.