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Risk Link Roundup

Here are a few articles that caught my attention this week, highlighting some relevant issues impacting the world of risk and insurance. They include a look behind the recent toxic chemical spill into the Animas River in Colorado, how Bumble Bee’s outdated ovens caused a workers death, the DOJ’s expectations with compliance programs and the U.S. government’s appeal of the ruling on the AIG bailout.

What the Gold Mine Disaster Tells Us

The New York Times: The General Mining Law of 1872 is among the last surviving statutes of the boisterous era of westward expansion. Signed by Ulysses S. Grant, it establishes the basic rules for mining hard-rock minerals like gold, copper and uranium on public lands.

Bumble Bee Foods to Pay $6 million in Death of Worker in Pressure Cooker

Los Angeles Times: On one of his early morning shifts, Jose Melena stepped into a 35-foot-long cylinder-shaped oven at the Bumble Bee Foods plant in Santa Fe Springs. The 62-year-old father of six needed to make a quick repair inside the massive industrial pressure cooker, which is used to sterilize thousands of cans of tuna at a time.

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What the DOJ Expects of ‘Effective’ Compliance Programs

National Law Review: If you have been keeping up with current U.S. Department of Justice (DOJ) antitrust investigations, you have no doubt noticed the hefty criminal fines that have been paid by violators of U.S. antitrust laws. In recent years, the United States government has literally collected billions of dollars in criminal fines.

U.S. Government Appeals Judge’s Ruling Over 2008 AIG Bailout

Reuters: The United States filed an appeal on Wednesday against a U.S. judge’s ruling in June that sided with former American International Group chief executive Maurice “Hank” Greenberg on a legal claim over the company’s 2008 bailout.

Cultivating a Reporting Culture

While many organizations view whistleblowers as disgruntled employees looking for revenge and monetary rewards from the SEC, this is generally not the case, according to a recent study.

According to “Embracing Whistleblowers: Understand the Real Risk and Cultivate a Culture of Reporting,” by The Network, whistleblowers most often turn to the U.S. Securities and Exchange Commission only after they have tried reporting internally, or if they are concerned about retaliation by their company. In fact, only 20% ever reported to someone outside their company.

Organizations can do much to protect themselves, while also looking after employees. Since the majority of employees go to the company first with their concerns, organizations have an opportunity to address issues before regulatory involvement.

According to the report:

The fact that whistleblowers may prefer to keep things in the company doesn’t mean they won’t turn to the government or media if they think it necessary. Sixty-five percent of surveyed employees would be willing to report externally, “if my company didn’t do anything with my internal report.” An even higher percentage would report externally, “if keeping quiet would cause possible harm to people” or “if it was a big enough crime.”

How can companies manage this risk? By encouraging a strong “reporting culture,” they can learn about, and take care of potential problems through quality hotline reporting programs, The Network said.

Hotline programs have been around for years, but are more important than ever in today’s regulatory and business environment. Compliance teams should stop thinking of hotlines as purely telephonic; they’ve grown to include mobile and Web-based reporting solutions that give employees and others a safe and reliable way to raise their concerns internally via whichever method is most comfortable for them. They also give the compliance team important insight into what is going on inside the company.

 

Risk Link Roundup

These topical articles highlight some interesting and relevant issues in the world of risk and insurance; from how Uber could impact the insurance industry, to Deepwater Horizon lessons-learned, to supporting workers with chronic conditions to board integrity.

What Will Be the Uber of Insurance?

From Insurance Thought Leadership: Insurance is ripe for disruption, and, given the conservative nature of the reigning carriers and large brokers, it is a fair guess that a lot of innovation will come from outside the industry. There are a few of candidates that might be in the winner’s circle when the dust settles.

Gard: Six Takeaways from Deepwater Horizon

From Marine Log: P&I club Gard estimates that BP’s claims and costs from the Deepwater Horizon disaster are more than $70 billion. Gard lists six important lessons emerging from the 2010 incident and the ensuing litigation during the past five years.

Employers Urged to Accommodate Workers’ Chronic Conditions

From Business Insurance: When it comes to workers with chronic conditions, employers should focus on providing accommodations and support rather than managing a disease, an expert said during the Disability Management Employer Coalition’s 2015 conference in San Francisco.

Integrity? The Buck Stops at the Board

From Listed Magazine: Companies are quick to blame “rogue employees” when they experience an ethical failure within. But employees merely reflect a company’s true and actual culture, internal controls and practices—all of which point right back to the board

Should Your Company Install an Office Surveillance System?

There are plenty of compelling reasons to install a surveillance system in your office, but there are also a number of reasons not to. Cameras are becoming more and more common in our daily lives, and choosing whether or not to embrace them in your own workplace can be a challenging decision.

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There are advantages and disadvantages to consider before installing cameras and phone/Internet monitoring. Here are a few of them:

Pro: Cameras prevent theft

There is no denying that a camera monitoring system is going to drastically reduce incidents of employee theft. Studies have shown time and time again that areas that are clearly monitored by camera systems have significantly less crime than places that suggest anonymity. If you have a problem with items going missing around the office, installing cameras can be a way of showing that you are aware of the problem without directly confronting a potentially innocent employee. Cameras are a highly effective deterrent that can quickly nip a theft problem in the bud.

Con: Cameras may offer a false sense of security

If you have a particularly devious employee, cameras may actually work against you. If an employee really wants to steal from the office, he or she will probably find a way to do so regardless of the cameras. You may feel like you do not need to do anything else once cameras are installed, which can cause you to let your guard down. For this reason, cameras should be used as an addition to your current loss prevention plan, rather than being used as the primary deterrent.

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Pro: Cameras provide evidence

If an unforeseen incident occurs on your company’s property, you may have to deal with a lawsuit. Having cameras installed ensures that you have indisputable evidence to back up your story. If you suspect an employee of misconduct, you can simply check the camera to make sure your worries are not misguided. You never want to have to depend on your cameras, but it is certainly nice to know that they are there when you do.

Con: Employees may feel stifled

Any office manager knows that keeping morale up is essential to keep productivity high. Although you may mean well, installing cameras can sometimes be viewed as an invasion of privacy. It is important to form a bond of trust with your employees, and cameras or phone/Internet monitoring can undo the work you have done to establish meaningful relationships. However, explaining your stance on the issue and approaching it head-on may help to alleviate any concerns your staff may have.

Pro: Monitoring employees provides valuable training materials

Sometimes explaining how to handle a situation just isn’t as effective as being able to show a trainee a video or recording of a similar situation. Or, if an accident occurs, having video or audio recordings allows you to see what went wrong and prevent problems next time. Often words do not carry nearly as much impact as a recording of a real-life situation, so in-office surveillance can make your employees better at their jobs and more equipped to handle tough situations.

Con: The cost

Although today’s surveillance cameras are surprisingly budget-friendly, you still have to consider the cost of hiring employees to monitor them. You may also need to have them repaired if something goes wrong. Depending on the size of your office, buying multiple cameras and monitors can get quite pricy. The cameras often pay for themselves in the long run, however, by reducing theft and increasing productivity.

Choose based on your situation

Every office is different, and what works for one may not be ideal for another. Cameras can be absolutely essential in some situations, or you may be able to operate just fine without them. You may want to start with just a camera or two to see how your employees react, and then add more if necessary. Making the right choice for your office can be challenging, but in-office surveillance can be a valuable way to protect your livelihood and improve employee conduct.