CRM - Risk Control

TCOR is used as a Key Risk Management Tool to:

1) assist with making effective risk management decisions 2) Measure progress toward risk management objectives 3) Focus and promote safety and loss control 4) provide management and employee incentives 5) assist with accurate pricing of products and services 6) assist with effective management of financial budgets

Hazard

A condition or circumstance that may give rise to a loss from a given peril; physical, moral, or morale characteristics that make the likelihood of a loss from a given peril greater

Claims management definition of Loss

A reduction in the value of assets

Loss

A reduction in value

Hold Harmless or Indemnification Agreement

Affirmative assumption of the financial consequences for liabilities of another through a contract. - Indemnitee - the one who is owed the obligation from another - Indemnitor- the one who owes the obligation to another

Probable Maximum Loss (PML)

Amount of loss expected from a specific peril given some level of impairment or delay in protection

Maximum Possible Loss (MPL)

Amount subject to loss

Occurrence

An accident with the limitation of time removed (an "accident" that is extended over a period of time rather than a single observable happening.)

Incident

An event that disrupts normal activities and may become a loss, claim or business interruption

Accident

An unplanned event definite as to time and place that results in injury or damage to a person or property.

Definition of Risk Control

Any conscious action or inaction to minimize, at the optimal cost, the probability, frequency, severity, or unpredictability of loss. Focus should be on solutions that will prevent or reduce actual harm or the cost of loss, not providing for funds to be paid in compensation. This is a People Process- individuals must be involved in all aspects of an effect of risk control program.

Risk Analysis

Assessment of the potential impact of various exposures on an organization. Qualitative Analysis ("what" analysis- Language) - Risk Assessment - Financial Assessment - Loss Data Assessment Quantitative Analysis (Number) - Loss projections or forecasts - Cash discounting and NPV calculations - Cost-benefit analysis - Cost of risk calculations and analysis

Role of claims management

Assist the risk manager in: using claim data to improve business performance, reducing total cost of risk, adding value to the risk management program and Assuring claims management team members, internal or Extertal, are providing an appropriate level of service and following best practices.

Key Property Exposure Terms & hazard controls related

COPE - C(onstruction) - materials - O(ccupancy) - occupancy or operations - P(rotection) - Safe guards - E(xposure) - Sources of potential damage external to the building

Computer workstations: risk factors and control measures

Common workstation injuries include: eyestrain employed fishing, headaches, fatigue, stress on hands shoulders neck back and legs, cumulative trauma disorders. Computer workstation factors include: repetitive activity, Acworth posture, static loading (upper extremities/lower back), pressure on tissues on sharp edges (wrists, legs), personal factors (individual physiology and stress, outside activities and lack of awareness of factors) Computer workstation physical risk measures include: adjustable workstations, ergonomic chairs, workspace organization, adequate lighting and glare control, noise control, computer mouse)

Selecting defense counsel for organization

Considerations: management profile, workloads, size of firm, firms client base, experience level/education and training, reputation and fee structure.

Four Types of Contractual Transfer (1 of the 5 Techniques of Risk Control)

Contractual Transfer- assumption or limiting exposures of certain liabilities relating to another party. 4 Types: Hold Harmless or Indemnification agreement Exculpatory agreement or clause Waiver of Subrogation Limit of Liability or liquidated damages clause

Approaches to Risk Control

Financial Approach (okay for Property) - measures the net cost benefit and recovery of the investment in loss control programs. Systems Approach - organizations systems cause accidents, even though individuals do what they are told to do with the tools and equipment provided. - Risk identification and classification, training, equipment maintenance - Tracking risk exposures on a flowchart - Hazard Evaluation Idex Practical Approach ("Common Sense" Approach) - Grass roots support - Top mgmt support - Incentive and reward program - Accountability for risk control initiatives - Budgeting for safety - Willingness of all to compromise and cooperate Challenges of approaches to Loss Control -Need to Compromise -Finding funding for safety initiatives -Supervisor involvement and support

Claims management definition of Resolution

Full or negotiated settlement, denial, litigation/alternative dispute resolution, subrogation

Exposures to Loss

Human Perils - those caused by human activity Economic Perils - those caused by general economic activity Natural Perils - those caused by natural forces Factors affecting exposure to loss: Geographic, building & equipment maintenance, storage practice and special hazards.

Sources of crisis

Human hazard: accidental, organized or deliberate. Difficult to avoid and very expensive to mitigate. Environmental or natural hazards: can be challenging or impossible to control. Can be widespread and far reaching. Industrial or technological disasters: can run the gamut from a loose connection to a field system. Can be mitigated, reduce or avoided by redundancy. Far less expensive for preventative maintenance. Biologic or pandemic disasters: may be natural in origin or intentional. Subject to cry Wolf scenarios. Global scope. Can evolve on your own. Infrastructure breakdowns Transportation breakdowns

3 Principle Element of Hold Harmless Agreements

Limited (mine) - assumes responsibility for indemnitee's liab for the indemnitor's negligence only. INDEMNITOR PAYS ONLY FOR ITS NEGLIGENCE. *Intermediate form (mine and yours). MOST COMMON. Limited + responsibility for full indemnification of the Indemnitee if there is ANY negligence on the indemnitor's part or if the indemnitor is partially negligent, he/she pays 100%; this classification applies to agreements requiring indemnification for ALL occurrences arising out of the indemnitor's operations, excluding only the liability arising from the indemnitee's SOLE negligence. Broad form (yours, mine and ours) - Limited + Intermediate + indemnitor agrees to be responsible for indemnitee's sole negligence; can include other parties neglience.

Components of a crisis management kit

Operational Physical components Communication systems Media

Exculpatory Agreement or Clause

Pre-event exoneration of the flat of one party that results in any loss or specified loss to another

Risk Identification

Process of identifying and examining exposures of an organization. MOST IMPORTANT STEP of the process.

General ergonomic risk factors

Repetitive tasks (use automation when feasible) Excessive force (use mechanical aids possible) Awkward or deviated pastor including reaching (design workspace with worker in mind) Static loading (use fixtures for holding instead of hands, design work place for proper posture, avoid bending and reaching) Personal risk factors Environmental risk factors

Post loss goals of crisis management

Restore and or maintain operations, sustain profits and stable Ernie, work towards growth, maintain a positive public image. Effectively and economically minimize the operational and financial impact of crisis.

5 Steps of the Risk Mgmt Process

Risk Identification Risk Analysis Risk Control Risk Financing Risk Administration

Role of Risk Control

Role: identification of exposures (10 methods), Incident Analysis and Cost-Benefit Analysis

Essential components of the preparation step to crisis management

Safeguarding, training, identification, communication, inspections, purchasing, procedures, evacuation and education

Peril

The Cause of a Loss

Risk Financing

The acquisition of internal and external funds to pay losses at the most favorable cost. - Retention: internal funds used to pay losses - Active (planned) - Passive (unplanned) - Transfer: external funds used to pay losses - Non-insurance contractual transfer of control or responsibility for an exposure. (Outsourcing) - Non-insurance contractual indemnification or financial responsibility (Hold harmless) - Insurance

Frequency

The number of losses occurring in a given time period

Claim management definition of Prompt

The primary goal of claims management is to resolve claim matters perfectly and efficiently

Definition of Risk Mgmt Picture of 5 Steps

The process of managing uncertainty of exposures that affect an organizations assets and financial statements using 5 steps: Identification, Analysis, Control, Financing and Administration. Process is 2 fold: - Protect the assets of the organization (physical and human resources) - Protect the financial statements of the organization

Definition of claims management

The prompt resolution of organizations losses subject to insurance or an active retention program including claims by other entity to which it may be legal or ethically bound. Subject to insurance or an active retention program - many types of organizational losses are not part of state licensing limitations. Ethically bound - Ex gratia payments or compensation without regard to legal fault or responsibility

What are the Root Causes of Accidents and injuries

Unsafe acts or behaviors Unsafe conditions Uncontrollable events

General Theories of Risk Control

- Human Approach -people cause accidents - Engineering Approach - things & pent-up energy cause accidents - Systems Approach - Systemic failures or weaknesses cause accidents

Creating a risk Control Program for Contractual review

- Identify what contracts or agreements will be reviewed - Determine who will be responsible or reviewing which types of contacts - Ensure access to and review all appropriate contracts, incoming and outgoing - Monitor, evaluate and suggest revisions in contractual language to be consistent and compatible with risk mgmt programs and to be in compliance with changes in the law

5 Techniques of Risk Control

5 Techniques of Risk Control: (P.A.R.T.S) Prevention- Goal is to reduce the frequency of types of claims that cannot be eliminated. (Reduces Frequency) Avoidance- complete elimination of an exposure to avoid the chance of a loss. Eliminate both positive and negative outcomes. Difficult sale to mgmt. (not always practical) Reduction (pre-loss and post-loss)- Goal is to reduce the severity or financial impact from losses that are not prevented. Reduction of activities can be both before (pre) and after (post) a loss. (Reduces Severity) Transfer (contractual, physical or both)- Goal is to reduce risk to the organization by transferring some or all of the risk to another party. Can be a physical or contractual transfer. (Includes separation or duplication) Segregation/separation/duplication- Goal is to reduce the overall severity. Segregation - isolate exposure. Separation- spread the exposure. Duplication- use back-ups for critical systems or operations. (Can be physical transfer or contractural transfer)

Claims management definition of Claim

A demand for payment or obligation to pay as a result of a loss; claims are made by either of the following: Second party - employee in the course and scope of employment Third-party - any entity other than the organization itself or a second party

Claim

A demand or obligation for payment as a result of a loss

Cyber liability third-party

A different exposures created if the data stored and organizations computer fits the definition of personal data. Personal data is defined by various federal and state statutes as: first and last name in combination with any one or more of the following: -so security number, drivers license or state ID, or Financial account number or credit card with or without the security code, that would permit access to a residence financial account. Cyber liability can come from a variety of resources: breach of personal data, unintended transmission of malicious code/virus, copyright violations, personal injury(liable, defamation, etc. ), contractual performance failure, on authorize actions of employees and compliance failures. Cyber liability includes breach of duty exposures for in adequate security of data including: an authorized disclosure of customer personal data, failure to provide secure transactions, failure to prevent or react on authorized intrusions, failure to protect web based storage, failure to exhibit due diligence in development and implementation of patients systems and procedures, courts are reluctant to limit liability for a client if they feel to provide adequate security controls.

Exposures

A situation, practice, or condition that may lead to an adverse financial consequence: an activity or resource; people and assets

Four Broad definitions of "risk" used in risk management

A) Chance or probability of Loss B) Uncertainty concerning Loss C) Possibility of a variation of outcomes from a given set of circumstances D) Difference between expected losses and actual losses

Consideration when selecting a TPA

Accessibility Risk management information system (RMIS) - revenue codes, divisions, departments and locations, a special client specific Cody, supports statutory reporting, captures needed fields like NCCI codes, NAICS codes and OSHA. Ability to convert existing claims that up to TPA system. Experience with current format and timeline. Ease of extracting data Internet access. Ad hoc reporting, chill down and capabilities, claims notes and financials, firewall levels, monthly reporting, monthly upload and download reporting four minutes. Flexibility in account handling- large lost notices to risk manager, reserve and payment authority limitations and preferred vendors Qualifications of staff- bios, turnover, years of experience, licensing, professionalism, workloads Best practices and quality control Industry experience and reputation Unbundled services Pricing and value added services

Reserving evaluation

Accurate reserving ensures the organization will have sufficient funds to pay its current and future contractual obligation's. Reserves must include both anticipated lost payments and lost adjusting expenses Critical to the organizations bottom line in financial solvency Setting reserves to local result in insolvency in bankruptcy, problems with industry rating in problems of the regulators Setting reserves to her I can result in understating and organizations assets, the organization mistakenly believe me it doesn't have financial resources in creating problems with tax reporting in stockholders. IBNR (incurred but not reported)- accurate information crucial to organizations that worksheet. Casualty exposures have greater IBNR them first party property exposures. Review of loss runs - loss runs contain credibility, still reserves, late reporting indicators, reserved versus paid, trends buy locations/type/date in repeat offenders.

Role of a TPA during the claims process

Adjusts and resolves claims within organizations self-insured retention using internal funds Reports to carrier On high value claims (50% of retention or any red flags) Request reimbursement from carrier of funds expended in excess of the retention and reimbursement policies TPA represent the organization. Usually does not interpret coverage. TPA has a fiduciary duty to the carrier which can create potential conflicts.

Cyber risk first party

An organizations store data has value, records, research and development, pricing strategies or strategic plans Cost to collect, manage, analyze and store data, and respond to unauthorized breach of data security. Data is intangible asset in may not be covered by conventual property insurance Requires sound of risk control procedures Risk associated with first party include: breach or loss of data, breach both loss of proprietary information, trademark infringement and on authorized use of IT resources.

Manual material handling and lifting risk factors and control measures

Both cumulative trauma disorder and injuries from single events arise from material handling and lifting. (Low back strains, soldier strains, knee and ankle strains, elbow and wrist strains). Factors include: frequency of lift or move, though to wait, awkward Pastor, in proper lifting technique's and personal risk factors. Measures include: plan before move or left, Limit frequency of move or lift and range of motion, recommended maximum weight limits, use mechanical aids, job redesign, and consider risk control techniques - illumination, engineering, administration, substitution and training Components of lifting (NIOSH)- "recommended weight limit (RWL)= load constant x horizontal distance x vertical distance x travel distance x asymmetry x frequency x coupling strength Administrative measures: reduce size and weight of containers, job rotation, replace a lighter material, and outsourced logistics in material handling operations

Scope of a claims audit

Duplicate payments, overpayments, frivolous payments, poor reserving, failure to document, failure to obtain releases, failure to pursue subrogation, failure to watch aggregates, failure to seek contribution from excess and re-insurance carriers, evidence that phone calls emails are not being returned promptly, complains about adjusters from insurance brokers,increased litigation, and proper application of statutes

10 Methods of Exposure Identification (1 of the 3 Roles of Risk Control)

Checklist and Survey - identifies physical hazard - identifies admin. Processes and procedures - identifies good or best practices for industry Flowchart - Graphically and sequentially identifies concentration in values and process bottlenecks Insurance Policy Review - identify uninsured exposures and address - provides an understanding of the organizations Philosophy of risk tolerance Physical Inspections - informational visits to critical sites to discover unknown or hidden exposure, perils, hazards, and special problems, or problems not identified by other methods. - provides educational opportunities for staff related to risk control objectives and mgmt's commitment to safety and loss control Compliance Review - identifies exposures created from non- compliance with regulations and laws Procedures and Policies Review - identifies exposures due to an adequate or ineffective internal policies and procedures Non-Insurance Contract Review (large amount of times and reviewing) - identifies obligations and compliance assumed by the organization in non-insurance contracts - identifies risks that have been or may be transferred to others Experts - use 3rd party firms to help identify exposures Financial Statement Analysis - sources of org. Revenue - sources of org. Cash flow (seasonal?) - business and financial partners - asset/income protection needs Loss Data Analysis (clients don't understand) - identifies frequency of incidence and frequency/severity trends of losses and claims - identifies casual factors affecting frequency And severity - provides opportunities to identify integrity issues related to loss data - identifies anomalies, e.g. Time of day, day of week, time of year, etc.

Types of damages in tort

Common-law the damages: economic (wage, medical, lost earning past and future). Non-economic (pain and suffering) Statutory damages - attorneys fees, fines and penalties under consumer protection Punitive or exemplary damages

Principles of affective crisis management

Comprehensive, consider and take into account all hazards, all phases all stockholders and all impacts relevant to disasters Progressive - anticipate future disasters in formulate preventative and preparatory measures to build disaster resistant in resilient plans and operations. Risk driven- use sound risk management principles to sign priorities and resources Integrated - ensure unity of effort among all levels Collaborative - create and sustain provinces urination ships among individuals and organizations to encourage trust, advocate a team atmosphere, build consensus and facilitate communication Coordinate - synchronize the activities of relevant stock orders to achieve a common purpose Flexible - is creative and innovative approaches to solve this after challenges Professional - value a science - and knowledge based approach based on education, training, experience, ethical practice in continuous improvement

Cyber risk business interruption

Denial of service attacks in system corruption, loss of revenue, impact to brand, credibility, trustworthiness and hardware taken out of service by law-enforcement

For essential steps of the crisis management process

Disaster planning - first and most important step. Establish planning team include all areas of operation. Define authority and limits. That was a reasonable time schedule and budget to define training requirements and exercise is to report progress to management. - consider characteristics of perils: source - natural, human, etc. Timing - length of warning, seasonality, business peaks Impact - human, property, operations, public image, customers Probability of occurrence - always expect the unexpected Controls/medication - pre-loss and post loss Identify: external resources in their emergency plans, internal resources and near capabilities, resource requirements. Develop a plan and understand the obstacles. Prioritize the activities. Right and distribute the plan. Implement the plan. Evaluate and update the plan. Preparation- crisis management team must generate countermeasures for both loss prevention and lost production for each identified payroll or crisis during the planning stage Response- protecting human life always comes first Recovery- A combination of policies, procedures in restoring operations critical to the organizations re-Sumption of ordinary business activities after a disaster occurs.

Various definitions of crisis

Disaster, catastrophe, critical incident, emergency. Any critical incident that threatens or causes injury to people or disruption of a normal business operations. An event that occurs with an impact that exceeds the normal response come Capacity of the affected organization.

Potential impact of a crisis

Disruption in operations, shutdown or possible bankruptcy Serious personal injury to customers come employees are other persons Create potentially damaging media affecting public opinion

Administrative of controls to the ergonomic risks

Education Job Rotation Job Enlargement Work breaks Stretching and strengthening exercises Monitor working Environment Stress reduction measures Early entry intervention Execution and reinforcement

6 General Classes of Risk

Economic - risks arising from operations, economy, financial marketplace or entrepreneurial activities. Legal- risks inherent in compliance or arising from statutory liab Political- risk arising from changes in the law, govt reinterpretations, changes in govt policy or chgs in the political environment. Social - risks arising from public relations, loss of reputation, damage to brand, cultural issues Physical - risks arising from property, people or information Juridical - risks arising from a jury or judge's decision or from court or jury attitudes.

Pre-loss goals of Crisis management

Economy of operations, the gallery of operations, maintain positive public image. Obtain full management support and commitment to the crisis management program.

What are the 6 basic steps of Accident prevention

Elimination of the hazard - (similar to "Avoidance") Substitution of a less hazardous substance or process Engineering controls- physical modifications designed to reduce the potential for injury. Admin Controls - rules/procedures that mgmt takes to reduce the degree of or the potential for injury (safety meetings, job rotation, supervision, or safety rules) Personal Protective Equipment Training

Cost-Benefit Analysis (1 of the 3 Roles of Risk Control)

Financial decision making tool Comparison of costs (cash flows) with benefits (reduction in losses and other cash inflows) over time to measure rate of return Losses, probabilities, interest rates, and cash flows require assumptions that may not be valid over time or achievable Treatment options with the best rate of return may not be in accordance to regulations or compatible with philosophy or goals of mgmt. *Can be construed as placing a monetary value on safety or the late of a human life

How risk managers use claims management process

Gather data - incident/accident reports, contractual obligation's, verification of loss/claim amounts, other aspects of investigation Enforced contractual obligation's - insurance policy, hold harmless, additional insured Mitigate damages after a loss event - actions taken to minimize severity Promote equitable compromise of claims - settling for lowest, reasonable dollar amount Identify and combat fraud - internal, external, and systematic fraud Lost forecasting - Setting accurate reserves, performing trend analysis (inflation and lost development) Advise and consult with insured and internal departments - legal, underwriting, operations, lost control, and ministration, sales, product development

Risk control measures for cyber risk and liability

Identification measures: cyber risk assessment should be conducted characterize the nature of the organizations risk exposure and potential perils that threaten the security. Management should be advised of scope of organizations cyber exposure Policies and protocols should be adapted to ensure organizations compliance (using audits in corrective actions) Existing and new applications, systems, data management plans should be evaluated for proper security controls during planning, implementation and operations. Controls: Avoidance(don't store personal data if not necessary) Establish protocols for collection, storage, access, dissemination and protection of electronically stored information - don't use public Wi-Fi for sensitive information. Implement strong password policies. Do not allow sharing of computer user accounts. Require all downloads be scanned for viruses. Use layered access levels. Require computers we turned off or log out when not in use. Perform regular backups. Limit administrator access privileges. Responses to data breach: Treat data breach like other emergency cleaning: assign roles, identify resources and develop protocols in advance Isolate source of the breach and remove from the affected system. Determine the scope of the breach and the sacked type of data involved Maintain compromised hardware for law-enforcement Determine if nature and scope of the breach triggers any statutory notification requirements Initiate required notifications and any additional mitigation steps Ensure security changes are implemented to prevent reoccurrence

Risk Administration

Implementation and Monitoring Administration of a risk control program requires prioritization, implementation, coordination, follow-up, and communication throughout the organization.

3 principal types of claims management plans

Insured plan Third-party administered plan Self administered plan

Key steps in claims management process

Investigate- reporting, responding (within 24 hours) , gathering information (prompt and thorough investigation is critical! Facts- who, where, what, when and how ) and documentation Evaluation- coverage, liability, damage, reserving and documentation. Resolving coverage issues - non waiver agreement is a better alternative then a reservation of rights letter. Non-waiver agreement permits continue processing of the claim wall preserving the insurers right to disclaim coverage. Theories of liability: Contractual liability - failure to perform as agreed, breach of contract. Tort liability - wrongful act giving rise to legal liability, majority of third-party claims. Tort Liability: Strict liability - imposed by statute regardless of fault. Intentional torts - damage or injury intended like libel or slander. Unintentional acts- failure to act or negligence Fault versus causation: intervening causation or allocation of fault Negligence per se: statutory violations and order criminal violations

Key elements of reputation management

Key corporate and strategic asset Crisis management and communication (Mclee and accurately. Build network of advocates) First 24 hours is critical (they won the crisis story, day two companies response. Set tone for the narrative and show leadership.) The art of crisis communication (speaker must maintain credibility in control of the dialogue. Did not blame her shift responsibility.) Fact driven story delivered quickly (for bonus is forgiven, lies will not. Demonstrate empathy) Message discipline(acknowledge responsibility if exists. The spots must be proportionate crisis) Restoring a damaged reputation (except responsibility for the role, help immediately, take long term corrective action)

Insured plan (bundled insurance program)

Loss sensitivity - usually low includes guaranteed cost, dividend, small deductible or self-insured retention and retro plans. Deductible - ensure provides all policy services from first hour and bills insured post payment Self-insured retention - no obligation by insurer and tell the satisfaction of self-insured retention amount by insured is paid Loss runs - online access an ad hoc reporting as allowed by insurer Loss reserves - insured has little or nor input regarding reserving philosophy or case reserves Staffing - capabilities of adjusters very widely, geographic operations of the insured may not coincide with carriers claims presents Settlement - ensure has control with self-insured retention's claim reviews, not frequently performed if at all. Claims audit's - home office will require multiple annual audits, auditors will visit claims office is in review random selected files, audit results are seldom shared with and ensure Litigation management: carrier creates and leads litigation Gijik plan, utilizes in-house or staff counsel for routine medication, it sure has little or no influence with an sure when suddenly litigation. Bundling versus unbundling: bundling - the following services are bundled into the traditional/standard insurance contract: State filings, lost control, claim services, policy issuance and statistical filing Unbundling- bundling is removing lost control and or claims administration services from the insurance contract, leaving only the risk financing function of the insurance contract. Willingness of the insured to assume a larger portion of risk. Annual premium must be large enough to justify the expense of the assumption of risk. It sure must have a greater risk tolerance because of retained losses, frictional costs, in management cost. Insured's financial ability must support anticipated cost of risk

Self Administered plan

Lost sensitivity - extremely high Loss runs - organization assumes responsibility for data management, including cost of risk management information system acquisition, set up, maintenance and operations. Loss reserves - provides incentives to be accurate to maintain appropriate internal funding and or credibility with insurers. Tendency is to keep reserves low requiring careful monitoring as part of an auditing process Staffing - ultimate control Settlement - ultimate control Claim reviews - internal review was conducted with broker and on staff adjuster or internal team chosen by senior management. Claims audit - internal audits for a supervisor are critical Litigation management - generally more willing to litigate to promote a tough reputation

Third party Administered Plan(unbundled insurance transaction)

Lost sensitivity - moderate: includes larger deductible or larger self-insured retention Loss runs - loss information may be available in real time in previous is only, or on a regular schedule Loss reserves - reflect TPAs reserving practices in May very widely office to office. Notification to ensure may be required when reserve is likely to exceed a certain amount. Risk management resources required to record a monitor and or audit Staffing - greater insured control drink EPA selection process. Most TPAs are responsive to staffing request and preferences of the insured. Settlement - payments determined by both primary layer of insurance and insured's self insured retention policy. Payments with SIR are administered by TPAs. Approval/authorization of insurer required prior to payment on larger cases Claim review - formal reviews are typically performed quarterly Claim audits - internal audits are infrequent and excess insurance will infrequently audit, internal audit results are really shared with insured unless very good Litigation management - will be more responsive to the insureds settlement/litigation philosophy. Retain outside counsel based on experience in college. Other advantages: and bundling is viable substitute for self insurance, provides control of claims management function without administrative burden of complying with state self insurance applications in reporting requirements. Good alternative for self insurance. May avoid problems associated with run off situations created when changing insurers - insured can change insurers without changing TPAs; thereby, maintaining continuity of the claims function

Three types of alternative dispute resolutions

Mediation- informal process, no evidence, neutral third-party facilitates, mediator has no power to impose a decision. Arbitration - semi formal process, summary/documentarian evidence only, a neutral third-party or panel with neutral empires oversight and arbitrator's decision usually final. Many trials/summary jury trials - was a judicial for back, abbreviated testimony in or evidence, factfinder will be many jury or magistrate, mini trial results are generally final summary jury trials are not finding if not agreed to by parties prior to summary jury trial.

Identify the elements of a safety and health program and understand how they work together to control risk

Mgmt Leadership - written policy, goals, objectives. Define responsibilities and accountability of all levels, provide all resources to fulfill responsibilities. Integrate into business practices. Accountability, responsibility, and authority - types of goals (activity oriented or results oriented), safety goals and objectives addressed in performance reviews, individual acct. for actions, behaviors and conditions. Employee participation - Safety committees, ee involvement in safety inspections, regular ee communication, reporting unsafe conditions, actions, etc w/o fear of recrimination. Hazard assessment and control - reasons why ee work unsafely: - unaware, never told, no reg reminders, unsafe behavior encouraged, rewards/punishments favor unsafe behavior, unsafe work is faster, rarely results in injury. - Accidents and injuries will eventually occur with continued unsafe behavior - Reward vs. Discipline - Existence of unsafe behavior and conditions may lead to an accdt - Systematic identification and assessment of the workplace hazards: audits, inspections, Job Safety Analysis, Behavior-based safety results identify unsafe acts, incident reporting, documentation of activity, exposures, and corrective actions Employee information and training - Safety and health program - Specific training for each exposure - When to train - information and training resources Accident reporting, investigation and analysis Post-injury mgmt - Benefits - Written policy - Return to work program - EE training - Prompt reporting procedures to claim admin. - Claim mgmt Evaluation of program effectiveness - Formal process to affirm the program is effective/appropriate - measurements (ins info, exp mods, loss rates, frequ/severity) OSHA - Injury & Illness Incidence rate = # of cases of injuries & illnesses x 200,000/ee hours worked - Accident and injury trends Frequency trends, severity trends and use of regression to compare relative measures. Trend analysis and benchmarking, OSHA fines and citations, behavioral observations.

Objective of Risk Manager

Minimize the TCOR by identifying those factors from each component that can be more effectively controlled.

Claims Resolution (5 non-mutually exclusive possibilities)

Payment in full (documented liability and damages) Negotiated settlement Steps of The negotiation process: -preparation, exploration, exchanges of offers, closure in settlement, structured settlement can provide substantial advantages to both claimant and responsible party. Denial /Declination (unpleasant for both, requires higher investigation, timing and method, importance of good communication, keep open mind and litigation) Litigation/alternative dispute resolution (is the collaboration between risk manager, claims personnel, legal counsel to accomplish shared purpose. It is the risk manager's responsibility, not the attorneys - the organizations money, corporate reputation, and a risk managers job is on the line) Subrogation/recovery- effect of subrogation or recovery is three who's the effect of the loss and premiums in retained losses and therefore reduce the total cost of risk. Subrogation the legal right one who has paid and others obligation to collect from the party originally only obligation. Recovery - third-party claims. Obtaining funds from another who bears responsibility or who has coverage for the clean before the claim is settled. Examples: identification agreements, hold harmless agreements and joint venture agreements.

Characteristics of a crisis

Potential to significantly damage reputation or can be entirely self-contained. Affects one or more asset classes; people, property, income Interrupts operations Made the image or strength and consumer, shareholder in employee confidence May involve multiple audiences or affects only a few. Maybe you need an entirely unpredictable or maybe largely anticipated.

Limit of Liability or Liquidated Damages Clause

Pre-event limitation of the amount, type, or method of calculation of damages available by one or both parties to an agreement

Waiver of Subrogation

Pre-event relinquishment of the right of one or both parties's insurers to seek recovery from a culpable party's insurance carrier for loss payments made to the insured.

5 Primary Risk Control Techniques

Prevention (reduce frequency) Avoidance (Total elimination of an exposure.) Reduction (reduce severity of loss). Pre-loss/Post Loss-claim admin Transfer (move risk to someone else. Physical-shift functions or exposure to outside source. Contractual- shifts responsibility to another party. OR both) Separation/Segregation/Duplication (reduce severity. Isolate exposure/spread exposure/back up systems)

Expected Losses

Projection of the frequency or severity of losses based on loss history, probability distributions, and statistics; the expected loss projection is commonly called a "loss pie" or "loss pick"

4 Logical Classifications of Exposures

Property Human resources Liability Net Income

Types of Risk

Pure - chance of loss or no loss, no chance of gain (Traditional) TRM Speculative - Chance of loss or gain, often referred to as a "business risk" (enterprise) ERM

Definition of crisis management

The act or process of managing a crisis Verivent the occurrence of a catastrophic loss, if possible, and reduce the impact of catastrophic losses to the organization, including its reputation and brand.

Employment practices exposures: common sources and risk controls used

Scope of employment practices issues include: discrimination in hiring promotion this charge it wage or pay issues, workplace harassment, wrongful termination and retaliation Sources of liability (agencies that investigate, evaluate and adjudication complaints): US equal employment opportunity commission, US Department of Labor, fair employment practices agency, court systems. Common sources of employment practices complaints: discrimination-(Americans With Disabilities Act of 1990), Sexual Harassment (quid pro quo- this for that, submission to a rejection of unwelcome sexual conduct), hostile or offensive work environment (unwelcome sexual kind of has a purpose or effect of reasonably interfering with individuals work and can create intimidating, hostile or offensive working environment) Unwelcome sexual conduct is measured by a dual test: subjective (was the person allegedly affected by the kind that actually offended?) AND Objective (but a reasonable person under the same circumstances be offended?). Viewed from the perspective of the victim without regard to the intent of the harasser. Wrongful discharge- employee at will does not apply if an impermissible or discriminatory motive for discharge to be established. President outweighs written policy and consistency matters. Retaliation - the fourth most frequent source employment practices allegations. Settlements are more costly than the original EPLI allegation Risk control measures include sound policies and procedures. They must be: established to address all applicable laws, communicated all personnel in clearly understood and universally applied. Not adhering to the policy is worse than not having one. Should be reviewed regularly.

Substance abuse risk control measures and benefits for a program in the workplace

Scope of substance abuse includes: drugs (illegal and legal), alcohol, former abuse and misuse. To compound the problem, medical privacy concerns me lead risk managers to include they cannot address the problems created by legal an over-the-counter drugs in the workplace. However there is no federal law that states employer cannot alert employees to hazards of legal drug induced impairments and to use common sense and performing their work well under treatment of such. Benefits of a workspace substance abuse program include: increased productivity, improve attendance, you were accidents, decreased employee turnover, less employee related crimes, reduced work comp costs, lower healthcare cost, compliance with federal contract requirements, compliance electrician, and insurance credits. Risk control measures include: clearly stated policies and procedures, clearly stated drug and alcohol testing protocols, substance-abuse program training for managers and supervisors, employee education and employee assistance programs. Possible legal problems with substance-abuse programs include: inconsistent procedures, in adequate chain of custody of specimens or results of testing, discrimination and testing or application provisions, slander and defamation, great company and she Auty, breach of privacy, failure to act, in adequate record keeping, and legal procedures. * American disabilities act considers drug addiction and disability, but provides to production time players and other employees in the attic to the worker.

Workplace violence - risk factors and control measures used to prevent or reduce

Sources of workplace violence include: internal and Extertal Possible exposures include: contact republic, exchange of money, delivery of goods or services, working with unstable or violent person's, working alone, working in high crime areas, working late at night, working in areas with poor visibility or poor lighting Employee respecter's include: gaps in employment, false or incomplete application, unfavorable or false references, drug or alcohol use, fixation with weapons, frequent or graphic taco violence, insubordination or violent acts and instability. Risk control measures the workplace violence: physical controls, hiring practices, administrative measures, training and program evaluations

Total Cost of Risk (TCOR)

Sum of all costs and expenses associated with the risk management function of an organization. TCOR= insurance costs + retained losses + risk management dept costs + outside services fees + quantified indirect costs.

Definition of ergonomics

The applied science of equipment and workspace design intended to maximize productivity by reducing operator fatigue and discomfort. Fitting the work environment to the person rather than expecting the person to adapt to the physical work environment.

Severity

The dollar amount of a given loss or the aggregate dollar amount of all losses for a given period

Pretty lost a post lost phases of a crisis

Threat - likely probability of occurrence but the event has not yet occurred Warning - when the occurrence is imminent Event - something that occurs at a time, time., And place with potential he adverse effects Impact - effects of the event

Components of TCOR

Total Cost of Risk = Insurance Cost + Retained Losses (passive or active) and assoc. adjustment expenses + Risk Mgmt Dept Costs (Salaries, EE benefits, Mgmt overhead, risk mgmt info system, etc) + Outside Services Fees (Risk mgmt consultants, Loss control, Legal, Actuarial, 3rd party admin) + Indirect Costs: can't be precisely measured. (Disruption in Sales, overtime costs, opportunity costs, mgmt time spent on loss-related activities, hiring and training replacement costs, social costs)

Incident Analysis (1 of the 3 Roles of Risk Control)

Tracking incidents without read to subsequent accidents, losses, occurrences or claim. Reporting procedures, tracking, and review specific to organization Having an effective Risk Mgmt Info System can improve the incident analysis process.

Cyber exposures

Transactions involving the transmission of electronic data, providing authorize entry to organizations network, providing both public and private information to other organizations via Internet, providing website for use by others for communication purposes, creation of A shared private computer network that is connected to the Internet, electronic publishing, electronic purchasing using electronic bank transfers and credit cards, collection of patient data, virtual servers i.e. the cloud, e-commerce.

Risk

Uncertainty that may be either positive or negative arising out of a given set of circumstances.