by Ed Schirick
Managing risk is a year-round, 24/7 challenge for most businesses. As
we have indicated in the past, the primary goal of risk management
is preserving the assets of your organization. The process of identifying,
evaluating, controlling, transferring, and monitoring the risk factors
that threaten your business is hopefully becoming familiar to camp
directors. Camps spend a lot of time and money modifying facilities
and educating staff, trying to prevent injuries and damage to property
before the campers even set foot on the premises.
Unfortunately, no matter how committed you are to controlling risk
in your camp environment and no matter how diligent your training efforts
and safety initiatives, incidents occur during camp that damage property
or cause injury to campers. Does this mean your risk management efforts
are a failure? Certainly not! Does risk management end when property
is damaged or someone is injured? Definitely not!
Some risk management professionals prefer to divide their risk management
planning and organizing into two phases. The first part is sometimes referred
to as pre-incident (injury) and the second as post-incident (injury) planning.
This separation emphasizes the continuous nature of the risk management
process and underscores the fact that risk management doesn’t stop
after an unexpected or unplanned situation results in injury or damage.
The concept of post-incident risk management is not new. But, some camp
professionals may be seeing the term for the first time. Most camps already
have some elements of a comprehensive post-incident risk management plan
in place through the use of emergency action plans and crisis response
plans.
Pre-Incident Versus Post-Incident Risk Management
From my perspective, the main difference is the focus of the activity.
In pre-incident risk management the focus is prevention. In post-incident
risk management the focus shifts to risk and loss reduction.
An excellent example of pre-incident risk management is the training
and information directors share with staff during orientation. Directors
discuss many things including such prevention issues as following the
rules for various activities, and the importance of using personal
protective equipment (Personal Flotation Devices while boating, helmets
while horseback riding, etc.). An example of post-incident risk management
is having systems and procedures in place to allow injured workers
who have lost time from work to return to work early in a different
capacity.
Cost Reduction is the Goal
The practice of allowing injured employees to return to work earlier
than they might have otherwise, doing a different job than the one they
did previously, is widely used and accepted as cost effective. In addition,
insurance industry experience with workers’ compensation claims has
demonstrated that the earlier the claim is reported to the insurance company
the more cost effectively it is managed. This is a desirable outcome especially
if your workers’ compensation is experience rated.
The following incident is a case in point. A camp had a maintenance man
who was using a gas-powered, grass trimmer with a brush blade attachment
to cut thicker grass and weeds at camp. The tool was designed in a way,
which prevented, or so they thought, a person from putting their hand near
the blade while also keeping pressure on the trigger handle. The flaw in
the design was the failure to anticipate that a very tall person, six-foot
six, or seven, might be able to keep the trigger depressed, bend over,
and put their hand near the blade.
This is in fact what happened. The incident occurred in a split second.
The injury was severe. The employee nearly severed his hand at the wrist.
Fortunately, he received immediate first aid and through the efforts of
the camp director had surgery performed to repair the damage to nerves,
blood vessels, muscles, and tendons by one of the finest surgeons in the
area. But, he was out of work, undergoing physical therapy, and receiving
lost wages payments from the camp’s workers’ compensation insurer.
Needless to say, this was a very expensive claim. However, the cost was
reduced through an early return-to-work program, which allowed the employee
to come back to camp before he was ready to resume maintenance duties and
perform other duties. This was done with the approval of his doctors. This
approach had a very positive impact on the employee’s attitude. Exactly
how much money was saved was not quantified, but the insurance company
claim department was certain of the benefit to the employee, and other
staff, not to mention the camp’s loss ratio as a result of this post-incident
risk management technique.
Blind Spots Cause Ineffective Risk Management
This leads to another principle of post-incident risk management. Know
and understand your post-incident duties and obligations. These obligations
may be imposed upon you by contract (your insurance policy; enrollment
agreements, lease agreements, hold harmless and indemnification agreements,
etc.), by law, or by your business customs and practices.
Insurance policies are contracts. They impose very specific duties and
responsibilities on the policyholder. If you don’t know what your
obligations are to report incidents, occurrences, accidents, or offenses,
take some time this winter to review them with your insurance advisors.
The obligations are different for each policy. Knowing your duties and
responsibilities and staying involved helps avoid surprises and reduces
the risk of taking actions or failing to take actions that might affect
insurance coverage or the positive outcome of the situation.
I’ve spoken to some directors about this issue and have been told
they simply rely on their insurance agents and insurance companies to tell
them what to do. While this may be convenient, lack of a comprehensive
post-incident risk management plan actually poses additional risk for your
organization. Post-incident risk management requires the same amount of
time, effort, and attention owners and directors give to pre-incident risk
management. This means avoiding the temptation to let your insurance agent
and insurance company take care of the matter. This means staying involved
until the incident or accident is resolved.
Why Is This Important?
Turning over an incident to your insurance company and expecting them
to do the right thing is a little naïve. Most insurance company claim
departments are quite expert and capable. However, sometimes the interests
of the insurance company and the policyholder differ and unfortunately,
every once in a while an insurance company claim department may take some
action, such as settle a claim involving no liability, which adversely
affects the interests of the policyholder.
A hypothetical case in point is the incident, which is reported to the
insurance company for Records Only. Upon receipt in the claim department,
a claim is mistakenly established, and without any notice to the policyholder,
a settlement is agreed upon with the injured party. In incidents reported
for Records Only, an investigation from the (insured’s) camp’s
point of view would have been appropriate. Contact beyond that with the
parents of the injured camper may actually invite a claim. Contact with
the parents would have been inappropriate in this example, since no demand
had been made for damages. Incidents become claims when there is some demand
made for compensation such as a refund of tuition or payment of medical
expenses or upon receipt of a letter of representation from an attorney.
You should be aware that when an incident actually becomes a claim, especially
when an attorney becomes involved, your involvement will change. Under
these circumstances, you must be careful not to interfere with the insurance
company’s claim department efforts. This doesn’t mean that
your interest in the claim ends. It should not. It is reasonable to continue
asking for regular updates. You may speak directly with the claim department
or work through your insurance agent or broker until the matter is concluded.
If the claim involves a lawsuit then the insurance company will assign
defense counsel, which changes the dynamic again.
In summary, take some time to review your post-incident risk management
plans and practices. If your risk management plan doesn’t include
this focus, reconsider your approach. Determine your duties and obligations
imposed by contract, law, and business practice. Consider the risks. Coordinate
your planned activity with your insurance agent and insurance company.
Cooperate with your insurance company and their representatives handling
your camp’s incidents, accidents, and claims until they are concluded.
Avoid surprises. You can make a difference. Good luck, and keep up the
good work!
Originally published in the 2004 November/December
issue of Camping Magazine.
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