A Question and Answer with OVD Insurance

As many businesses have begun going through the process of bringing people back into their places of employment, we recognize that there are many different angles that need to be considered and risks that need to be understood and managed properly. We spoke with Josh Van Vels from Olivier-VanDyk Insurance and asked him to share his expertise in the areas of insurance and risk mitigation as it relates to the reopening process specifically.

• What are some areas of increased or potentially overlooked liabilities associated with reopening post-Covid?

The obvious concerns are going to be positive tests and workers’ compensation liability related to the transmission of the virus within your workplace and compliance with ever-evolving Executive Orders and OSHA/CDC guidelines. One overlooked exposure that many employers are creating is overselling what you’re doing as a business to respond to COVID. Organizations that create detailed policies, signage, and communication pieces that don’t align with actual practices are potentially creating issues for themselves, especially given the reluctance of a certain subset of the employee population that is looking for ways to stay on unemployment and not return to work. You’ve got to be careful when you’re saying what you do that you are doing what you say. As evidence of this exposure: many insurers offering Employment Practices Liability programs are on an underwriting freeze for new business due to this general concern (as well as the potential for large reductions in employment).

• What are the main risk mitigation steps that a business should be taking when reopening?

The steps should look like this:

1) develop a COVID response team or designate those responsible for developing the return to work procedures and guidelines;

2) Communicate the steps you are taking as well as those required of employees upon return to work;

3) Those responsible for risk management and insurance should have in-depth understanding of the insurance implications as well as the areas where insurance will not respond to this new exposure;

4) Train and document all employees on the new program;

5) Make sure leaders and managers are focused on diligence and responsiveness, not fear. Many employees are fearful of coming back to work, and leadership needs to help them feel comfortable knowing that their safety has been priority number one and that the team has a response plan for whatever may come next.

• How can your insurance agency be a partner in the reopening process?   What does your agency do to help clients?

If your insurance relationship wasn’t actively involved in your response starting in March, it might be time to evaluate either a) the service capabilities of your relationship or b) your relationship entirely.

It’s nearly impossible for most businesses to sort through the day to day changes from the CDC, state OSHA departments, and multiple state EO’s. Your Risk Management partner should be feeding that information as it evolves. Most insurance agents/brokers will have a bucket of “tools” that you should be tapping into, such as Learning Management Systems, Risk Management Information Systems (RMIS), training resources, etc. – the quality and depth of which will vary. The issue with most insurance relationships is that these tools are available only to those who ask – they should be brought to you, especially in a time like this.

Our agency has several Risk Solutions Consultants that have been involved with hundreds of clients from day one of the pandemic. Our Learning Management System has several hundred active users, our proprietary RMIS system has been critical for large clients in assessing the incident and exposure changes that impact their insurance spend in real-time, and our consultants have been all over the place helping employers adapt their workspaces for employees to return and in developing COVID response programs.

Times like these really expose firms focused on just selling insurance vs. providing a true risk strategy that insurance is just a part of.

• What should business owners be thinking about during the reopening process?

Every crisis is an opportunity. As business owners and operators put in the hard work of reopening and getting back on their feet, it’s a good time to put serious consideration into the depth and quality of their team and their vendors. For instance: if you’ve been going through a three agent RFP or “bidding” your insurance, you’re probably with a low-cost provider, and the odds of deep response resources will be low.

If your team has gone through the motions on Environmental Health and Safety, you’re probably much more exposed through this than the business that values operational efficiency built off of a safe and healthy culture. Your employees will be slower to return if they don’t think you’re taking it seriously.

All situations like this are an opportunity for leaders to step back and assess whether they’ve built a quality organization with a good depth of leadership or a revenue-generating mechanism that’s missing the big picture.

• Are there new coverages business owners should be thinking about or existing coverages that you should be reviewing?

With all of the discussions we’ve had on business interruption or Loss of Business Income and Extra Expense coverage, it’s more evident than ever that our role as insurance advisors is to educate first and foremost on what is available to businesses from the insurance market and what it does. So often the insurance agents/brokers act like insurance gophers – we’ll take your information on what is in place right now, go back to our office with it, and then come back with a slightly lower price on the same coverages. Are you being educated?

The goal of any insurance advisor should be that uncovered losses are not a surprise, but were an economic decision you made based on the cost of the products available. Buying less insurance is our goal, and you can only do that if you feel comfortable in your assessment of the risk or exposure to your business relative to the cost of insuring that risk. As we like to say, everything is insurable; it’s just not always affordable.

• Are there any rebates or premium reductions that companies should be looking for?

Beyond the reduction in exposure (sales, payroll, vehicles placed on layup schedules, etc.) there is not much that can be done without reducing coverage at this time. Many businesses are strategically assessing their coverages, of course, but one overlooked item is pay plans. An example: we wrote a large auto manufacturer with roughly $400,000 in workers’ compensation premiums effective 4/1, and we were able to place them on a “pay as you go” plan that coordinates with actual payroll period numbers. Because this business was shut down with the Tier 1 auto manufacturers, they were able to essentially forego payments on their workers’ compensation for two-plus months until they reopened. In the end, this really didn’t swing their spend, but it dramatically eased the pressure on cash flow. The insurance programs we develop are full of small opportunities like this, but you have to be working with a broker that thinks like a business person, not a salesperson.