WorkBoat Columns

By Dan Bookham 
For WorkBoat Magazine 

Workplace safety is not merely a physical concern but also a complex emotional issue with far-reaching consequences for individuals, teams, and organizations. A comprehensive approach to workplace safety must address emotional factors, otherwise it is doomed to fail. A hearts-and-minds approach to keeping your people safe is always going to pay more dividends than folks dutifully checking boxes without investment in the philosophy behind your safety culture.

Should this all seem a bit too touchy-feely, consider the following. Safety at work is undeniably an emotional issue because the very human drivers of connection and fear underpin the decisions we make every day that could potentially imperil life and limb.

On the individual level, this translates to a basic fear of loss. The fear of injury, illness or even death is inherent to human nature. This fear can be paralyzing or motivating, depending on how it is managed. We also worry about teammates, as employees often form strong bonds with coworkers, creating a sense of family and community. The safety of colleagues becomes a deeply personal matter, driven by love and care. More than anything else, the instinct to protect oneself is primal. When safety is compromised, it triggers strong emotional responses related to survival and well-being which can set off a chain reaction of events that can amplify risks as much as lessen them.

Unsafe work environments can lead to chronic stress and anxiety, affecting employees’ mental health and overall quality of life, and the experience of trauma – for both an injured individual and their colleagues who were present – can have lasting impacts and cause employees to lose trust in their employer and feel a diminished sense of control over their work environment. This in turn can lead to a doom loop of anger and frustration which fuel reckless behavior, increased risk-taking, and reduced attention to safety protocols.

While negative emotions can spread rapidly through a workplace, creating a climate of fear and distrust which can hinder safety efforts, positive emotions are even more contagious and can boost morale, increase engagement, and promote a proactive approach to safety. When a team feels it in their bones a supportive and collaborative safety culture meets their emotional needs in the workplace, we see improved communication, conflict resolution and decision-making, all of which are powerful force-multipliers when it comes to reducing harm.

Emotions are a powerful force that can either enhance or hinder workplace safety. By understanding the impact of emotions, organizations can develop strategies to create a positive and safe work environment. Exploring and developing specific strategies that help you understand, manage and mitigate the impact of emotion on safety culture in partnership with your workers comp, USLH and P&I insurers is a smart way to benefit from the premium dollars you pay for your policies.

By Chris Richmond for WorkBoat  Magazine 

You have had a catastrophic fire loss at your boatyard. Your insurance policy responds to the property loss but how does your business survive while you rebuild? This is where your business income coverage becomes very important.

Like loss of use coverage on a vessel, business income coverage is triggered due to a slow down or suspension of your operations caused by a covered cause of loss to your commercial property. A fire in your shop or a burst water pipe which causes damage are just two examples. Business income coverage applies to the loss suffered during the time required to repair or replace the damaged property. It can also extend to losses suffered after the repairs are completed for a specific number of days.

But how many days will it take to rebuild your business property and how many days does your policy provide? Many policies only provide one year of business income. The time period for this coverage would begin shortly after the date of the loss. How long will it take for any claims adjustors or fire marshals to inspect the loss site? And then how long will it take to have all the debris cleared and the site ready to rebuild? And speaking of rebuilding, how long will it take to get a contractor lined up to start the actual building process? You could be three to five months into your business income policy before the work actually starts.

When looking at business income coverage – also known as business interruption coverage – you should remember to include extra expenses. This is the insurance which pays for additional costs in excess of normal operating expenses – what your business spends to continue operations while your property is being repaired or rebuilt, including, for example, costs you incur to relocate and advertise this new location. Your extra expense coverage begins immediately after your claim occurs. Your actual business income kicks in three days later.

Business income insurance is an essential safeguard for any business. It enables business owners to focus on rebuilding their business without the stress of no actual income coming in. Key to this coverage are adequate limits and timeframes.

Chris Richmond

By Chris Richmond
For WorkBoat Magazine

Today’s shipyard can be an inherently dangerous workplace. Implementing a sound risk management program is an important part of managing your employee workers compensation and USL&H costs (reducing claims and limiting injuries. There’s the added bonus of avoiding possible fines and penalties imposed by safety violations or hazardous waste clean-up. Here are some items to consider.

Implement regular assessments of your safety plan and see if it still reflects your current operations. Your initial plan should be based on a comprehensive risk assessment identifying hazards and the potential for accidents. There are risks everywhere, and they are major and minor: You should keep them all in mind. As your business grows and evolves so should your risk assessment plan. Don’t make the mistake of doing the work to create one leaving it to gather dust.

Conduct period safety training with your employees. Insurance companies and  governmental agencies have material available but don’t be afraid to develop your own manuals outlining specific jobs and procedures. Topics can include emergency response plans, safe work practices and hazard identification. And don’t keep trainings only in the classroom. Real life scenarios and employee involvement, such as demonstrating a proper response to a fire or chemical spill, for example,  can increase the learning potential.

Personal protection equipment should be readily accessible to your employees and its use should be as common as putting on a pair of pants. Steel-toed shoes, hard hats, hearing protection, safety glasses, respiratory masks and gloves are all great examples. And don’t stop with just making this equipment available. Conduct proper fit test for masks –  and make replacement filters available as well.

Have you reviewed procedures for potential pollution threats? Prevention is obviously the best response, so have proper handling procedures in place but in the event of a misfortune have a proper response plan in place. Maintain proper waste management practices and don’t forget about storm runoff. Keeping up with compliance with environmental regulations and standards will not only save you the headache of a pollution claim but can also save you the fines and penalties associated with them.

A risk management program is only as good as the employees who are adhering to it as well as the management team enforcing it. Regular reviews can identify areas of success as well as areas of improvement, but don’t make the mistake of taking the time to create a plan and then having it languish on a shelf in your office. It needs to be used in order for it to be beneficial.

Dan Bookham

By Dan Bookham 
For WorkBoat Magazine 

Legal system abuse, the exploitation of the legal system for personal gain or to create unfair advantages, has become a significant concern across various sectors, particularly the insurance industry. For this month’s “Insurance Watch” I’m going to delve into the nature of legal system abuse, its far-reaching consequences, and the strategies being employed to combat it.

Legal system abuse manifests in various forms, including fraudulent claims, exaggerated damages, frivolous lawsuits, abuse of the discovery process and third-party litigation funding. These practices not only burden the legal system but also have profound economic and social implications.

The insurance industry bears the brunt of legal system abuse. The fraudulent claims, exaggerated damages and frivolous or drawn-out lawsuits inflate costs, leading to higher premiums for policyholders. The complex legal environment fostered by abusive practices further burdens insurers with increased legal fees and reputational damage.

I’ve heard it argued that because insurances companies are the ones dealing with the front lines of this issue this is somehow a victimless crime. Setting aside the troubling implication that it is somehow OK to defraud an entire sector of the economy, it is important to remember that the insurance industry is underpinned by what we pay for our coverage, so if costs climb so do our premiums. When it comes to legal system abuse, we are all suffering.

Additionally, the repercussions of legal system abuse extend far beyond the insurance industry. Legal system abuse distorts the economy, leading to higher prices, reduced economic growth and job losses. The legal system itself suffers from eroded public trust, overburdened courts, and weakened deterrence. Moreover, individuals and businesses face increased anxiety, reduced access to justice and a diversion of resources from critical social needs.

A relatively new – and currently entirely legal –phenomenon driving expenses and claims in addition to more fraudulent practices is third-party litigation funding, where outside investors finance lawsuits in exchange for a share of potential awards.

To give some context, the largest third-party litigation fund in the U.S., funded in by both private equity and overseas sovereign wealth funds among others, has a $6 billion war chest to help push lawsuits to as expensive a conclusion as possible. In essence, there’s a massive thumb on the scale against businesses facing lawsuits and claims.

Addressing legal system abuse requires a multifaceted approach. Legislative and regulatory reforms, such as tort reform, stricter fraud penalties and increased transparency are essential. Judicial reforms, including stricter case management, sanctions for abusive litigation and promoting alternative dispute resolution are also crucial.

While the challenges posed by legal system abuse are substantial, a collaborative effort involving insurers, legislators, lawyers, courts, industry stakeholders and the public is essential to create a legal landscape that is fair, efficient and just for all. It’s going to take all of us working together to fix this increasingly serious problem.

By Chris Richmond, CIC, AAI, CMIP 
For WorkBoat Magazine, April 2024

At a recent conference I was speaking to a new owner of a commercial passenger vessel.  He had stayed with the former owner’s insurance company and after reviewing coverages with the agent realized there were multiple gaps. While this was a beneficial meeting for the new owner, it revealed serious gaps in coverage for the previous. Here’s a short list:

• Changes in operation. When the original policy was written, the vessel operations consisted of just day cruises. As the business grew so did the operations. Multi-day overnight cruises were now standard.  However, the policy warranties expressed day cruises and not overnight.
• Changes in navigation. While the vessel’s normal cruising area had not changed, one thing that had changed was that the vessel was traveling to a festival in a city outside of its warranted navigational territory. Had there been a claim while en route to or while at this port, coverage would have been denied due to a breach of navigational warranty.
• Propulsion When the original policy was written, the owner had additional coverage for the small boat that he used in conjunction with his larger boat.  The policy had a stated value and a description of both the tender as well as the outboard.  When it was time to replace the tired old outboard with a brand new unit, the owner failed to pass this information along to his agent.  While the tender was still insured it did not reflect the increased value of the new motor.
• Extra crew. The operator’s policy has coverage for a stated number of crew. When the owner took the vessel on longer trips, he increased his crew count to better man the boat.  What he didn’t do was update his crew coverage on his policy.  Had there been a crew claim and it was determined that there were more crew on the vessel than stated in the policy, he could have faced a penalty based on the percentage he under reported.

Insurance is one of the larger expenses that you have with your vessel and operation.  You want to do all you can before a claim occurs to ensure that you get paid in the event of an accident.   Insurance claims should not be a roll of the dice: Take the time to review with your agent what you currently have and make sure to keep him or her up to date with any changes.