Any company who understands the thin margins of the commodities market, should also understand the value in reviewing your insurance policy and seeking out value-added items in your risk management package that help keep your waste business competitive and thriving.
Ross Fields
Operations in the waste industry are anything but boring. Both literally and figuratively there are a lot of moving parts. From the most sophisticated to the most mundane of operations, there are always opportunities for new revenue streams, fierce competition, interaction with the public and the chance of accidents and injury. Business success in the waste industry hinges on adaptation and agility, both in terms of steering the business as well as the culture and workforce. A key piece of this puzzle is a strong risk management approach. From the simple to the complex, understanding risk and how it may affect your business is crucial. Too often, businesses in the waste stream look at risk management as the transactional piece of buying insurance. This falls well short of what is available and what is necessary to maintain a long-term growth plan. This is intended to be a broad overview of value-added items in your risk management package that help keep a waste business competitive and thriving. It is a good idea to partner with someone who knows your business because the little things can make a big difference. A risk management professional who specializes in the waste stream should have a game plan to discuss, 聽explain and implement the types of programs and ideas briefly described in this article.
The Renewal Period
For individuals who work on and in their waste business, the aforementioned transaction of buying insurance gets its due attention usually only once a year. People have daily priorities that require a lot of time and effort to keep the business running. Rightly so, then, that the expenditure of insurance is not high on the priority list until it needs to be. The renewal is when the rates are shopped, the losses are factored into cost and checks have to be written. There is a strong argument to be made, however, that this period is the least important time in the risk management program. In a poorly managed risk program, the renewal period gets all the attention and then the insurance is placed in a drawer with the hopes that it never has to be called upon. Or, at best, if it is needed, it will be there to save the day. So with that attitude toward the expenditure, what is a business buying? A stack of papers that they hope they never have to use? Certificates of insurance so they can complete jobs and maintain contracts? In some scenarios, they are not just buying an insurance policy. Rather, what they are buying is sound risk management advice, procedures and tools to help their business. It is simply funded by way of insurance policy purchases. What are some of these value-added tools to be had? To which areas of operations do they apply?
Monitoring Driver Safety
Most waste operations have a fleet of vehicles. Whether big or small, residential or commercial haul-away or otherwise, operations can often benefit from the same innovations. Businesses can participate in a 鈥減ull program鈥� from their state鈥檚 department of motor vehicles in order to better monitor their driver鈥檚 license status and safety records. Daily driver safety checklists can help drivers get into the routine of evaluating their safety and the roadworthiness of their autos everyday. Simple rules like making sure their hands are empty when entering and exiting vehicles seems like common sense, but seeing it in writing everyday and having the idea instilled will help adherence to the rule. In-cab cameras can help with not only the safety of the driver, but also the well-being of the business. The footage can often shine light on actual events, precluding another motorist from falsely accusing drivers of reckless actions. GPS is handy in route efficiency, but it can also aid in risk mitigation. Drivers tend to behave more properly when they know their whereabouts and actions inside the vehicle can easily be discovered. Often, insurance companies grant rate discounts for such technologies.
Inspections and Assessments
Risk engineering surveys can be very helpful in understanding a company鈥檚 exposures to risk. Frequently, an insurance company will require these as part of the offer of insurance, but not always; sometimes a line item fee is charged for the inspection. A strong partner in risk management will have these resources鈥攖eams who are dedicated to inspections and assessments regarding liability as well as property. These inspections provide free insight into how a business can avoid loss of property or causing injury to others. These generally include a physical inspection, so the risk advisors can see the condition of the structures and nature of housekeeping. They can make recommendations to protect a business from simple storage ideas to larger undertakings like upgrade to fire suppression systems. Hand in hand with these professionals comes a claims management team. They can help navigate the claims process after there is a property loss or a liability claim filed against the waste company. These individuals should be part of the risk management team and work for a brokerage; they service the waste company free of charge as part of the overall package. This way, a waste company is not beholden to one insurance company in order to get these services. They can choose their insurance needs based truly on coverage, pricing and etc. They need not worry about losing services should they feel it best to move in another direction.
Worker Compensation
Worker鈥檚 compensation and safety is an obvious area where the help of a well-versed risk management team is necessary. Again, the rate structure and the cost are transactional; the real work begins after coverage is placed. As with the general liability and property above, claims management professionals are key. A good brokerage is going to include this service for their clients. They can assign individuals to monitor the outstanding claims process. These individuals should have an intimate understanding of how the claims process works in specific states. They can then handle the follow-ups, as well as communicate with the injured worker, the medical providers and the insurance carrier. Claims managers can ensure that claims are handled appropriately, priced accurately and closed quickly. They can do this while keeping the employer informed every step of the way, without the employer having to do the legwork themselves. Loss control evaluations and a clear service and safety schedule should be implemented so there is a vision for success and accountability on all sides. Semi-annual observations and recommendations on procedures and safety can go a long way in terms of controlling losses. From there, training is crucial. A sophisticated risk management program should have an extensive training library. Training, tracking and log documentation should be done on an automated and electronic basis. This way, it is easy to track training completion by location, subject, department, individual, etc. Again, this should stem from the brokerage level, so a company is free to move policies between insurers.
Other Considerations
Others areas that may not get much thought but should be addressed within a risk management program include: HR/ERISA issues, Department of Labor (DOL) audits, contractual review and tracking subcontractors certificates of insurance to make sure downstream vendors are not putting a business at risk. DOL audits are on the rise as part of the Affordable Care Act. The audits look for specifics in the maintenance of documents and records, reporting and disclosure and compliance with mandates. The experience can be overwhelming and a strong benefits program should have a step-by-step checklist for what should be readily available and how to prepare for these audits. Risk management teams should be part of the contractual review just as a lawyer should. This can help in avoiding unnecessary insurance burdens—and the costs associated with them—in new contracts. Tracking certificates of insurance is important because of the nature of joint and several liability in the waste stream. If subcontractors are used, making sure their insurance is adequate is crucial because subs mistakes can hurt those with whom they do business.. If their insurance does not respond, one or more of their partners in business may be responsible. A brokerage should bring all of this to the table and be able to bring individuals in such as ERISA (Employee Retirement Income Security Act) attorneys to advise on the businesses compliance, employment practices and improvement to the workplace culture. Many waste entities are also governmental entities and they mistakenly believe they do not have to comply with any of the ERISA requirements. The reality is that many of the benefit plan compliance requirements that are in ERISA are also in the Public Health Service Act (PHSA), which does apply to governmental entities.聽Additionally, many requirements in the Internal Revenue Code聽 apply to specific types of plans and to employees in those plans, regardless of whether or not the plan sponsor is a governmental entity.
A Risk Management Team
These specialist individuals, from attorneys to loss control should be part of a risk management team and should be made available to the clients of top-tier insurance professionals. A business in the waste stream, regardless of their level of sophistication, has a unique set of exposures. That business is losing an opportunity to engage a variety of resources should it not seek out risk professionals who specialize in there industry. The often concentrated on transactional piece of buying insurance should be a formality and the real concentration should be turned to the interworking of the waste business itself. The risk management program should have a number of specialist team members to participate in the development and execution of the program. Anything less is not providing the most value for a waste business鈥� insurance expenditures. Any company, who understands the thin margins of the commodities market, should also understand this concept of value in insurance and seek it out sooner rather than later.
Ross Fields is Producer for Leavitt Insurance Group (San Diego, CA). He has more than seven years of experience providing insurance and risk management solutions for clients. During this time, Ross has dedicated his career to helping medium and large-sized businesses with unique and complex risks. His concentrations include workers compensation, general liability, and environmental risk. Ross manages a waste industry specialty insurance program from Leavitt Group鈥檚 San Diego office specializing in recyclers, waste haulers, landfills, and MRFs . He works in an advisory role with SERI (Sustainable Electronics Recycling International) on insurance and closure issues. He also sits on the Technical Advisory Committee (TAC) for the R2 Standard. Ross is a respected expert and has published several articles on the insurance needs of the waste industry. He can be reached at (858) 519-3207, via e-mail at [email protected] or visit /sandiego