Monday, February 20, 2017

Clarity Is Everything

Keys to Timely & Effective Claims Reporting


Recently, I received an email from one of our operators with a question he believed might be useful in my blog. The question addressed a situation that can happen at any wash with employees. In this situation, an employee took it upon himself, against company policy, to drop off a cash deposit on his way home. After leaving the bank, he was involved in a serious auto accident. The question: Would this be covered by workers’ compensation?

The debate on the answer to this question could go in a multitude of directions and would ultimately be decided by the workers compensation board. However, the situation itself raises more important issues than whether or not workers’ comp. would cover this incident. The following are some considerations that this scenario should provoke in response.

How should you proceed with a claim that is questionable? When an incident occurs it is imperative that it be reported as soon as PRACTICAL.  This applies to employee injuries that may fall under workers’ compensation, as well as customer injuries that may create medical or liability issues.  The legal climate and mandatory coverage provided vary greatly by State and there is often no universal answer to whether or not the Insurance Company should be responsible for payment and/or legal defense. This all can be open to interpretation and, too often, can contradict what you believe to be common sense reasoning. Making assumptions about how a claim will be resolved may put your company and assets at risk.

Here are a few points to keep in mind regarding timely and effective claims reporting:

  • In an effective safety management plan it is best to report and file all claims. An incident may turn out to be an early indicator of an underlying condition that could lead to more serious injuries.
  • Preserving evidence and gathering witness statements is most effective in the early stages of an incident. Not reporting these events may prejudice the rights of the insurance company and possibly negate coverage that might otherwise have been available.
  • It is possible for a claim to involve fraud. Without knowledge of the incident, the company may be denied the opportunity to initiate specific procedures that are normally used to successfully fight these cases i.e. setting up surveillance or interviewing associates.
  • In the case of a claim that might be considered a workers compensation loss, there are often severe penalties and/or fines associated with reporting a claim late. As mentioned earlier, this depends on your State.
  • Insurance companies generally have a specialist that can work with an injured employee or customer and help mitigate the size of the claim. The sooner they are involved, the greater the potential impact.
  • The insurance provider is often more qualified to do what is necessary to keep injuries from escalating into more serious conditions. For instance, a loss that starts out as a minor cut might turn into an infection that creates a larger complication, especially if the person is a diabetic.

This blog is not intended to suggest that the operator that approached me with this idea did anything inappropriate. It did cause me to pause and assess the circumstances beyond the specific example I was given.  The bottom line is that you pay a lot of money to buy insurance protection for your company. Using as many of their services and expertise as you can is just good business sense. I know that many owners and operators are concerned that too many reported claims will either jeopardize their renewal or significantly increase the cost. Sometimes there are better alternatives to managing claims than electing to accept responsibility with regard to what is covered by insurance by paying or denying a loss. For instance, it might be a better decision to participate in the costs of the loss by taking a larger deductible. Become actively involved with your insurance carriers loss prevention department and provide as much guidance as possible to the claims department specialists, keeping in mind that they often don’t know your business as well as you or your employees do. I believe, in the end, you will be better served by making these choices.

Remember: A Safe Wash Protects People and Profits!


Wednesday, October 19, 2016

OSHA Inspections - What You Should Know!

In most cases, an inspection by OSHA is unscheduled. The first thing to do when an inspector arrives unannounced is confirm their credentials. Be sure to copy their badge and call the local OSHA office to confirm. You even have the right to request that the OSHA compliance officer obtain an inspection warrant in order to perform the survey. However, it is possible that requesting a warrant can create an adversarial situation that can lead to a more stringent review process and cause more headaches for you and your employees.

Inspections can occur for the following reasons:
  • Random selection
  • Targeting specific industries where they suspect hazardous workplace conditions
  • After a severe injury occurred on premise
  • Worker allegations of hazardous conditions or violations
  • Follow-up inspections to confirm hazardous conditions/violations have been abated
  • Referral (Police, Fire Department, etc.)
The first part of the inspection is an opening consultation. They will review why they selected the workplace, how they are going to conduct the survey and what paperwork they will need to review. You should assign two employees of your wash to accompany the officer. One person should be intimately familiar with all facility operations and safety procedures, while the other should be an employee that can take notes and pictures of everything that the inspector points out. Consider using someone other than management. This might be a good method of giving non-management personnel a feeling of being an integral part of the safety protocols at the wash.

The next phase of the inspection is the walk around. Make sure that your employee assigned to the officer takes detailed notes in order to have as much information as possible when reviewing any violations written up. These details could help mitigate fines associated with violations.

The last aspect of the inspection is the closing conference. During this session, the compliance officer will outline his findings and discuss any citations and proposed penalties. This is your opportunity to provide any explanations or documentation to offset their findings. If there is evidence of OSHA Standards violations or if serious hazards are identified, they may issue citations and fines.
OSHA is required to send a written violation report, "Citation and Notification of Penalty", within six (6) months of the visit. The report will describe the following:
  • The alleged OSHA Standard(s) violated (categorized as Willful, Serious, Other than Serious, Failure to Abate, or Repeated)
  • Proposed penalties
  • Deadline for correcting alleged hazards/violations

This Citation and Notification of Penalty Report MUST BE POSTED in a conspicuous area of the wash at all locations.
For violations categorized as ‘Serious’, OSHA has a practice of reducing penalties that pertain to small employers and those acting in good faith. This, however, would not apply to alleged ‘Willful’ violations.

The employer has the right to appeal. This appeal must be submitted within 15 working days, after receipt of the officer’s written citation report and submitted to the OSHA Area Director in writing.  Please note that this is the ONLY timeframe that you have to appeal. Once this timeframe elapses, you lose that right completely and your written citation becomes your final order.

Your penalty payment is also due within 15 working days after receipt of the officer’s written citation report.
Some of the most common violations that occur are:
  • No written Hazard Communication Plan in place
  • Lack of or improper use of PPE (Personal Protection Equipment)
  • No written procedures for Lock Out Tag Out
  • Insufficient eyewash stations
  • Electrical (particularly in the equipment rooms)
Make sure to stay up to date on all OSHA regulations, not only for the safety of your employees, but for the efficiency and effectiveness of your business.

Refer to www.OSHA.gov for a list of required OSHA Standards.


Remember: A Safe Wash Protects People and Profits!