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The Risk Taker Roundup Welcome Mike Hay Director of Risk Assessment and Loss Prevention / Information Resources, State Office of Risk Management.

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Presentation on theme: "The Risk Taker Roundup Welcome Mike Hay Director of Risk Assessment and Loss Prevention / Information Resources, State Office of Risk Management."— Presentation transcript:

1

2 The Risk Taker Roundup

3 Welcome Mike Hay Director of Risk Assessment and Loss Prevention / Information Resources, State Office of Risk Management

4 Opening Remarks Jonathan D. Bow Executive Director and State Risk Manager State Office of Risk Management

5 Introductions Mike Hay Director of Risk Assessment and Loss Prevention / Information Resources, State Office of Risk Management Kallman Consulting Services

6 The Risk Taker Roundup Conference Discussion on Employment Practices Liability Hosted by the Texas State Office of Risk Management Phil Norton President Gallagher Strategic Risk Solutions May 25, 2006 May 25, 2006

7 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Employment Practices Liability: The Exposure and its Trends Legal and Legislative Developments Class Action EPL Claims D&O Derivative Actions Following EPL Claims Trends toward Catastrophic Loss EPL Insurance Coverage Trends

8 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Factors Influencing EPL Losses 1. The Older Workers Benefit Protection Act of 1990 and The Age of Discrimination in Employment Act of 1967 2.The Civil Rights Act of 1991 3.The American with Disabilities Act of 1990 (effective 1992) 4.The Family and Medical Leave Act (1993) 5.The U.S. Supreme Court decision in Harris versus Forklift Systems, Inc. (November 3, 1993) 6.Class Action EPL Claims 7.Market Capitalization Drop 8.Derivative Action Possibilities 9.Typical Claims Costs are Significant 10. Catastrophic Claims are Becoming More Likely

9 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. EPL Perils to consider Wrongful Termination (actual and constructive) Breach of Employment Contract Discrimination Harassment (sexual and workplace) Failure to Employ/Promote Wrongful Discipline or Wrongful Demotion Failure to Grant Tenure Negligent Evaluation Invasion of Privacy and False Imprisonment Employment Related Misrepresentation Defamation or Employment Related Libel/Slander Wrongful Infliction of Emotional Distress Retaliation (including whistleblower)

10 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Tracking EEOC Charge Filings

11 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. The Gallagher Database on EPL Claims Research on Public Information - not client data Focus on Large Losses - $1MM or more –Approaching $5 Billion of Claim Costs in database All Losses are Post-1991 [Civil Rights Act] Mixture of Settlements and Verdicts Jurisdiction: half State Courts; half Federal

12 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Large EPL Claims By Industry

13 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Large EPL Claims by Type of Claim

14 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Top 10 States for Large EPL Claims Note: numbers are percentages

15 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Punitive Damages & EPL Claims About one-third of top $2.5 BL in large losses are due to punitive damages Of largest 150 claims, about half have punitive damages assigned Average percentage of full award that is punitive is about 35% for all large losses, but closer to 70%, if a punitive award is present!

16 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Statutes & Law Supporting EPL Claims Title VII Age Discrimination in Employment Act Americans with Disabilities Act Pregnancy Discrimination Act Equal Pay Act Family and Medical Leave Act Title IX State Fair Employment Practice Statutes Whistleblower Laws Municipal Statutes and Regulations Breach of Contract Wrongful Termination Negligent and Intentional Infliction of Emotional Distress Defamation Invasion of Privacy Tortious Interference with Contract Harassment Assault and Battery Negligent Hiring/Supervision Fraud and Misrepresentation StatutoryCommon Law

17 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Some EPL Cases of Significance Voice of America CALPERS Coca Cola Texaco State Farm Interstate Brands Lucky Stores Shoneys Publix Home Depot Microsoft Farmers Insurance Dennys Miller Brewing Triton Energy Proctor & Gamble Mitsubishi Baker & McKenzie Tishman Construction General Dynamics Hughes Aircraft UPS AT&T Alabama DOT

18 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Trends in EPL Insurance The EPL exposure, including potential for catastrophic loss, has increased significantly since 1991 Pricing started high (1992/1993) then declined (1997), rose again (2001-2003) and is now declining again Meanwhile, EPL coverage has been greatly improved: –sometimes packaged with Loss Control consulting –punitive damages covered –no downsizing exclusion –bilateral discovery offered –no intentional acts exclusion –simpler reporting requirements often available –flexible selection of defense firms may be possible –third-party claim coverage

19 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. The EPL Marketplace Today Cycle of Capacity starting to turn up –1992 to 1997, 1998 to 2003, 2004 - 2009… Until recently, Loss Ratios historically > 100% Carriers took action in 2003 with: –Increased deductibles! –Premium adjustments –Coverage fine-tuning Risk Management, Insurance and Loss Control are more important than ever!

20 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Responsibility for EP Compliance

21 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Risk Evaluation and Loss Control –comprehensive auditing systems may be available –Prevention versus Reduction: Insurance is still key! To prevent EPL claims, you should review your: * Hiring Processes * Employee Procedures * Training Programs * Performance Evaluations * Termination Policies * HR Operations To reduce claims costs, you should review your: * Insurance and Risk Transfers * Claims Investigation * Claim File Management * Defense Controls * Timely Notification * Return to Work Programs

22 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Appendix Additional Information on EPL Risks

23 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. The EPL Insurance Policy Who is covered? –Directors & Officers –All Full-time Employees –Temporary Employees and Volunteers –Independent Contractors –The Corporate Entity and Subsidiaries – Students in a limited capacity

24 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Who can bring covered claims? Employees Students Applicants for hire EEOC State Agencies Directors Other individuals/entities acting on behalf

25 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Potential Exclusions Strikes, Lockouts Downsizing Willful or Malicious Intent Willful failure to comply with law M/A activity Bankruptcy Class Actions Deliberate Fraud W. A. R. N. Benefits Due Written or Express Employment Contract Workers Comp. Claims OSHA Securities Violations

26 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Coverages to Request Punitive Damages Back Pay Front Pay Pre/Post Judgment Interest Nonmonetary or Injunctive Relief

27 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Coverage Triggers Written Demand for Monetary Damages Civil Proceeding Arbitration Proceeding Administrative Proceeding

28 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Defense and Settlement Considerations Duty to Defend? Panel Counsel? Claims reporting threshold Right to Settle (esp. Hammer Clause) Reporting – When and How

29 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Rating EPL - The Exposure Base Number of Employees –U.S. versus Foreign –Full-time versus Part-time –Leased Employees –By state (especially CA, TX, and MI)

30 Phil Norton – Arthur J. Gallagher & Co. Phil Norton – Arthur J. Gallagher & Co. Other EPL Underwriting Factors The nature of the operations EEO-1 report Turnover Percentage of highly paid employees The quality of employment manuals and handbooks; the stated positions on the key practices and procedures Financial Condition M&A Activity Policy Wording Considerations Approach to Risk Management Litigation/Loss History - Claims experience is essential!

31 Break

32 Public Officials Coverage / Cyber Risk Jean Moreau AIG

33 Security & Privacy Liability Nick Economidis Vice President Professional Liability Division AIG/National Union 215-255-6028 Nicholas.Economidis@aig.com Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

34 Security & Privacy Liability Agenda Security & Privacy Exposures Traditional Policy Forms Security & Privacy Insurance Overview Questions Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

35 In the News… 2005 Disclosures of Data: disclosed incidents in the United States potentially affect more than 57 million individuals Source: Identity Theft Resource Center http://www.IDtheftcenter.org Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

36 Identity Theft In the News… Data Breach Computer Hacking Lost Backup tapes Stolen Laptop Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

37 The online trade in stolen financial data is thriving. Countless Dens of Uncatchable Thieves April 3, 2006 New York Times Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting. In the News…

38 Typical Disclosure Incidents Bank data theft: 700,000 exposed Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

39 Typical Disclosure Incidents Major retailer: $16.5 million charge for losses due to a breach of computer security Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

40 Typical Disclosure Incidents Theft of laptop containing employee records Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

41 Typical Disclosure Incidents Social Security Numbers disclosed on mailing labels Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

42 Typical Disclosure Incidents Website allows access to restricted information Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

43 Typical Disclosure Incidents Financial information obtained from discarded records Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

44 Key Exposures… Credit card information Healthcare information Personally identifiable information - customers - employees Business information of others - Trade secrets Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

45 Covered by Insurance? Commercial General Liability Bodily Injury and Property Damage Personal and Advertising Injury Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

46 Covered by Insurance? Professional Liability In the performance of professional services? Personal injury exclusion? Dishonest acts exclusion? Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

47 Security & Privacy Insurance! Negligent handling of private or confidential information Legal Liability - Pay on Behalf of basis - Duty to defend - Defense within limits - Defense cost coverage for certain regulatory actions (Subject to insurers consent) Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

48 Security & Privacy Insurance! Wrongful Act -- Failure of the insureds (computer) security Wrongful disclosure by an insured of private information An insureds failure to protect private information Vicarious liability of an insured for a failure to protect personal information by vendors Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

49 Security & Privacy Insurance! Key exclusions -- Dishonest Acts - Officers or directors - Employees (if officers/directors had knowledge) Misappropriation of trade secrets by an insured Contractual Liability - Exception: obligation under a NDA Agreement Special Class Action Retention Greater of $100,000 or 200% of the standard retention Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

50 Security & Privacy Insurance! Policy Limits Limits: up to $15 million available Retentions: start at $25,000 Minimum Premium: $3,500 Submission requirements AIG netAdvantage application Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

51 Security & Privacy Insurance! Policy application and materials http://www.aignationalunion.com Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

52 Security & Privacy Insurance! Who needs this? Financial Institutions Healthcare Providers Retailers Payment Processors Data Processors & Information Services anyone handling credit card information! anyone with employees! Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

53 Security & Privacy Insurance! A Perfect Fit for Every Company! Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting.

54 Questions? http://www.aignationalunion.com

55 Thank you! Policy application and materials http://www.aignationalunion.com Please drive safely on your way home!!! Insurance underwritten by member companies of American International Group, Inc. Any description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverages and exclusions. Coverage may not be available in all jurisdictions. Issuance of coverage is subject to underwriting. Nick Economidis Nicholas.Economidis@aig.com 215-255-6028 Nicholas.Economidis@aig.com

56 Lunch

57 Thank You to Our Sponsors

58 Risk Assessment & Loss Prevention Mike Hay Sam Arant Sally Becker Lisa Bell Joe Deering

59 Risk Assessment & Loss Prevention Cherie Hughes Lester Taylor Benny Vanden Avond Mary Loza Sam Stone

60 SORMs Insurance Program Directors and Officers Liability (Public Official Liability) Statewide Program Short-Term Special Event General Liability Program Statewide Automobile Insurance Volunteer Insurance Program Statewide Property Insurance

61 Thank You to Our Sponsors

62 RALPs Services Accident/Incident Review and Analysis Emergency Evacuation Program Development Traffic Safety Programs Education and Training Programs Identification of Hazards and Employee Accident Exposures Job Safety Analysis Safety Inspection Programs Back Injury Protection Training Ergonomic Assessment and Training First-Aid Program (Certification provided) Hazard Communication Program (HAZCOM) Hazardous Materials Management Program (HAZMAT) Personal Protective Equipment Assessments Industrial Hygiene Services

63 RALP Assists Agencies By: Identifying, evaluating, and reducing potential liability exposures and liability losses Reviewing risk management programs used by state agencies Assisting state agencies to implement effective risk management programs

64 RALP Accomplishes These Services By: Providing risk management guidelines Administering on-site risk management program reviews Administering safety evaluations, consultations, and training Analyzing annual reports from state agencies on loss information, existing and potential exposure to loss, and estimates of category of risk of losses incurred but not reported Providing agency outreach and training

65 Thank You to Our Sponsors

66 SORM 200 The SORM 200 is the sole source for collecting statewide information from state agencies regarding their expenditures for risk management activities, insurance purchases and non-workers compensation claims made or settled against the agency. The intent of the SORM 200 is to capture costs associated with agency Risk Management Programs, and to compile information necessary for SORM to include the administrative costs of risk in the Offices biennial report to the Legislature.

67 REPS The Risk Evaluation and Planning System (REPS) is a data collection and analysis tool intended to assist state agencies in identifying exposures to loss in various operational areas. REPS is comprised of three major sections. The Risk Evaluation Survey portion is intended to lead client agencies through a series of questions intended to identify exposures that could result in financial or operational losses. The Frequency and Severity Analysis portion of the survey calculates the probability and potential impact of exposures identified in the first section. The Apply Mitigating Strategies portion recommends mitigating strategies to reduce or eliminate losses from identified exposures.

68 Risk Management User Group The next meeting of the Risk Management User Group is June 20, 2006, in the William B. Travis Building from 8:30 a.m.-12:30 p.m. Agenda items include: –Emergency Responders Workers Compensation Consequences –Lessons Learned from Hurricane Rita –REPS Enhancements –Exposure Claims –How Insurance Works –Avian Flu For more information, contact Cherie Hughes at (512) 936-1483.

69 Thank You to Our Sponsors

70 Agency Outreach & Training SORMs Agency Outreach & Training section offers a variety of safety, health, risk management, and workers compensation training for state agencies. Popular courses include: –Additional Duty Safety Officer (ADSO) Orientation –Adjuster Prelicensing Training –Confined Space Entry –Defensive Driving –Training for Claims Coordinators – Level 1 Find out more by clicking on the Outreach & Training tab at www.sorm.state.tx.us.

71 Risk-Tex Newsletter SORMs quarterly newsletter keeps State of Texas agencies up-to-date on topics relating to risk management, workers compensation, and training. To subscribe, send an email to Risk-Tex Editor Sam Lawrence at samuel.lawrence@sorm.state.tx.us.

72 Basic Fleet Risk Management for Public Entities

73 The purpose of this document and any activities to its creation ("The St. Paul Travelers Activities") was to develop current underwriting information and/or to assist you with your legal responsibility to maintain safe premises, practices, operations and equipment. The St. Paul Travelers Activities do not cover all possible hazardous conditions or unsafe acts that may exist, are not legal advice, are not for the benefit of any other party and do not amend, or otherwise affect the terms, conditions or coverages of any insurance policy issued by The St. Paul Travelers. Implementation of any practices suggested by this document is at your sole discretion. The St. Paul Travelers disclaims all warranties, express or implied and assumes no liability to any party for any damages arising out of or in connection with The St. Paul Travelers activities.

74 The Exposure Number ONE Cause of occupational fatalities 3,000-4,000 workers die each year A leading cause of work related injury 200,000 are disabled Costs average 3 X other injuries One of the most frequent accident causes One of the leading causes of third-party liability claims

75 Selection Placement Training Accountability Monitoring Components Of The Auto Exposure DriversVehiclesPoliciesTransfer

76 Selection and Placement Requirements – CDL Class? Experience counts 50% of accidents happen to employees with 1 year or less experience in a specific job Dont hire bad drivers Background and MVR checks Physically and psychologically suited Drug testing Vision / hearing requirements Subject to ADA restrictions

77 Hiring a driver without conducting a background investigation Using a driver whose license is suspended or revoked Using a driver with a poor motor vehicle record Forcing (or allowing) a fatigued driver to operate a vehicle Failing to address known alcohol or drug related problems. Selection and Placement Negligent Entrustment

78 Selection and Placement MVR checks Who? All Drivers How? State DMV/American Background What? Criteria Where? Personnel Office When? Hire/Continually/Annually Why?You Are Responsible

79 Selection and Placement MVR Grading Criteria Minor violations Stop sign / traffic signal offenses Speeding (not more than 20 mph over posted limit) Improper turn, failure to signal Seat belt violation Illegal passing Major violations DUI alcohol / drugs Leaving scene of an accident Reckless driving Falsifying an accident report Vehicular homicide or assault Attempt to elude an officer

80 Grading Criteria (Three Years) ViolationsGrading Criteria 0 –1 Minor ViolationClear 2 Minor ViolationsBorderline 3 Minor Violations *Poor 4 Minor ViolationsUnsatisfactory Any Major ViolationUnsatisfactory * Trigger for remedial training

81 Selection and Placement Physical & Psychological Law enforcement psychological assessments NFPA driver / operator recommended practices ADA issues Local Physical Requirements Vision/Hearing Test Doctors note

82 Selection and Placement Drug Testing Pre-employment For cause Post accident Random Safety sensitive employees Security Sensitive D.O.T. requirements Union Contract Substance Criteria Prescription Non-Prescription Alcohol Illegal

83 Selection and Placement Driver Test Does a valid drivers license mean they can operate the vehicle or equipment? Do you let law enforcement officers carry weapons before they qualify? Require applicants demonstrate competence before you let them operate a vehicle or piece of equipment.

84 Driver Training Orientation training Specialized training Police cars Fire apparatus Ambulances Construction equipment 15 passenger vans Defensive driving FLI Coaching series Driver meetings 98% of accidents are caused by human behavior.

85 Accountability Accident investigation Reporting & documentation Determine preventability Accident review committee Consequences and rewards Charge-back (cost allocation) system. Retain Physical Damage by department

86 Driver Deductibles At fault accidents require driver to pay a set deductible Must be acknowledged by driver IN ADVANCE and IN WRITING May not reduce pay below minimum wage Discuss this one with your attorney

87 Employee (Driver) File Application Background checks Medical records (confidential) Drug and alcohol test results Physical exams Road test (check ride) MVR Photocopy of license Training records Disciplinary records.

88 Components Of The Auto Exposure DriversVehiclesPoliciesTransfer Standardize The Fleet Performance and design specifications Maintenance

89 Inventory Dont pay for vehicles you dont own ! Ensure that all of your vehicles are covered ! Keep your inventory up-to- date.

90 Maintenance Scheduled preventive maintenance Based on manufacturers recommendations Vehicle history folder Shop inspection reports Repair orders Shop software Vehicle condition reports Headlights, brake lights, warning equipment Fluid levels, tire air pressure, etc

91 Vehicle File Document: Purchase Date/Cost Driver Inspections Mechanics Inspections Defect Reports Manufacturers Defect Reports Annual Inspections Maintenance Costs ALL MAINTENANCE

92 Government employees / due process Licensing requirement Driver qualifications Motor Vehicle Records criteria Personal use Components Of The Auto Exposure DriversVehiclesPoliciesTransfer

93 Maintenance Personal vehicle use on city / county business Accidents & thefts General driver responsibilities Preventable accidents Components Of The Auto Exposure DriversVehiclesPoliciesTransfer

94 Hired & non-owned Contractors Volunteers Certificates of Insurance Components Of The Auto Exposure DriversVehiclesPoliciesTransfer

95 Break

96 25 May 2006© Dr. James Kallman, ARM95 The Risk Taker Roundup State Office of Risk Management May 25, 2006

97 25 May 2006© Dr. James Kallman, ARM96 Disaster Planning & Recovery Dr. James Kallman, ARM Kallman Consulting Services 700 Furlong Dr Austin, TX 78746-4127 631-748-0853 kcserm@earthlink.net www.kcserm.com kcserm@earthlink.net

98 25 May 2006© Dr. James Kallman, ARM97 Benefits of Disaster Planning & Recovery Save lives Minimize asset losses Contain recovery costs Minimize lost revenues Increase productivity Reduce regulatory problems Get back to business faster

99 25 May 2006© Dr. James Kallman, ARM98 Components of Disaster Planning & Recovery Before: DPP – Disaster Preparation Plans During: ERP – Emergency Response Plans After: BCP – Business Continuity Plans

100 25 May 2006© Dr. James Kallman, ARM99 DPP – Disaster Preparation Plans 1.Articulate your goals 2.Assess hazards 3.Assess current plans 4.Develop/revise ERP & BCP 5.Test the plans

101 25 May 2006© Dr. James Kallman, ARM100 DPP – Disaster Preparation Plans 1.Articulate your goals What do want to happen after the event? Is this a SMART goal?

102 25 May 2006© Dr. James Kallman, ARM101 DPP – Disaster Preparation Plans 2.Assess the Hazards a.Define hazard b.Define exposures c.Define perils

103 25 May 2006© Dr. James Kallman, ARM102 DPP – Disaster Preparation Plans 2.Assess the Hazards d. Assess impacts e. Assess likelihood f. Assess timing g. Describe the risk time E(X)1 E(X)2 E(X)3 Expected values P(x)

104 25 May 2006© Dr. James Kallman, ARM103 DPP – Disaster Preparation Plans 3. Assess Current Plans a.Use the FEMA checklists b.How well are you prepared? c.How often to review your plans? FEMA – Emergency Management Guide for Business & Industry

105 25 May 2006© Dr. James Kallman, ARM104 DPP – Disaster Preparation Plans 4. Prepare/revise Plans a.Direction and Control b.Communications c.Life Safety d.Asset Management

106 25 May 2006© Dr. James Kallman, ARM105 DPP – Disaster Preparation Plans 4. Prepare/revise Plans a. Direction and Control 1)Set up Emergency Operations Center 2)Appoint Incident Commander

107 25 May 2006© Dr. James Kallman, ARM106 DPP – Disaster Preparation Plans 4. Prepare/revise Plans b. Communications 1) Lists of key ER personnel 2) Set up teams 3) Create IT systems & back-ups (power too!) 4) Install warning systems 5) Appoint public relations spokesperson 6) Assemble hazardous materials information

108 25 May 2006© Dr. James Kallman, ARM107 DPP – Disaster Preparation Plans 4. Prepare/revise Plans c. Life Safety 1) Establish evacuation plan & assembly points 2) Create Search & Rescue plans 3) Arrange for security 4) Secure water, food, shelter 5) Prepare first aid stations & crews 6) Establish medical care & transportation 7) Obtain sanitation

109 25 May 2006© Dr. James Kallman, ARM108 DPP – Disaster Preparation Plans 4. Prepare/revise Plans d. Asset Management 1) Prepare budgets 2) Arrange for cash 3) Obtain security 4) Get back up power (test) and supplies (paper) 5) Prepare shut down schedules 6) Secure relocation sites 7) Contract for salvage / restoration services

110 25 May 2006© Dr. James Kallman, ARM109 DPP – Disaster Preparation Plans 5. Test your plans a. Tabletop exercises b. Simulations c. Full interruption tests

111 25 May 2006© Dr. James Kallman, ARM110 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 1.Direction & Control 2.Communications 3.Life Safety 4.Asset Management

112 25 May 2006© Dr. James Kallman, ARM111 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 1.Direction & Control Activate Emergency Operations Center Distribute vital information packets to key teams

113 25 May 2006© Dr. James Kallman, ARM112 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 2. Communications a. Distribute Plan b. Contact team leaders c. Activate IT systems (check back up systems)

114 25 May 2006© Dr. James Kallman, ARM113 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 2. Communications d. Activate warning system e. Initiate public relations f. Distribute HazMat data

115 25 May 2006© Dr. James Kallman, ARM114 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 3. Life Safety a. Site evacuation & assembly b. Search and Rescue – employees and visitors c. Provide first aid d. Premises security (lock-out, tag-out)

116 25 May 2006© Dr. James Kallman, ARM115 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 3. Life Safety e. Distribute water, food, shelter (families) f. Follow up on medical care & transportation g. Arrange for sanitation

117 25 May 2006© Dr. James Kallman, ARM116 ERP – Emergency Response Plans What will you do if the emergency occurs? Activate ERP 4. Asset Management a. Get Cash b. Provide security c. Implement back up power d. Shut down / lockout / tagout e. Obtain other supplies

118 25 May 2006© Dr. James Kallman, ARM117 BCP – Business Continuity Plans Lets get back to normal Issues: a. What functions will you restore first? b. How will you restore them? c. What resources will you need? d. How long will it take? e. Who will do what?

119 25 May 2006© Dr. James Kallman, ARM118 BCP – Business Continuity Plans BCP Process: 1.Articulate goals 2.Activate BCP teams 3.Distribute schedules & assignments 4.Obtain cash (Insurance / retention) 5.Set up temporary facilities

120 25 May 2006© Dr. James Kallman, ARM119 BCP – Business Continuity Plans BCP Process: 6. Get workers (families) 7.Contact external stakeholders 8. Employee rehabilitation 9. Initiate salvage operations 10. Initiate restoration activities

121 25 May 2006© Dr. James Kallman, ARM120 Disaster Planning & Recovery Summary Before: DPP – Disaster Preparation Plans During: ERP – Emergency Response Plans After: BCP – Business Continuity Plans Parting words of wisdom: Test your plans!

122 25 May 2006© Dr. James Kallman, ARM121 Disaster Planning & Recovery Thank You! Dr. James Kallman, ARM

123 Thank You


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