Transcript Getting the Management Spotlight on EPL Risk

Getting the
Management
Spotlight on
EPL Risk
Ruth Kilduff, Moderator – Integro Insurance Brokers
Jessica Flinn – Integro Insurance Brokers
Becky Havlish – Banner Health
Paresh Purohit - Trideo
Getting the Management Spotlight on EPL Risk
•
•
•
•
Introductions
Our Agenda
Setting the Stage
Employment Practices Liability is a brewing coverage
storm. Merger and acquisition activity, mingling of 'for
profit' and 'not for profit' entities, rightsizing organizations
and integrating diverse HR practices and diverse
organizational cultures has resulted in significant
increase of frequency and severity of high cost claims.
Healthcare organizations are being forced or electing to
take significant self insured retentions.
THE RISK:
Sampling of EPL Settlements & Verdicts in Excess of $2M (June 2009 – June 2014)
Verdict:
Defendant:
Allegation:
Misc.:
$168,000,000
A Large West Healthcare System
Sexual Harassment and Retaliation
$66 million Punitive & Compensatory
Damages
Verdict:
Defendant:
Allegation:
Misc.:
$15,000,000
A New York Medical Center
Sexual Harassment
$1.5 million in Punitive Damages
Verdict:
$11,441,559
Defendant: A Southern California Medical Group
Allegation: Retaliation and Defamation
Verdict:
Defendant:
Allegation:
Misc.:
$7,600,000
An Illinois Health and Hospital System
Retaliation
$400,000 in Punitive Damages
Settlement: $7,000,000
Defendant: A Massachusetts Academic Medical Center
Allegation: Sex Discrimination and Retaliation
Settlement: $4,650,000
Defendant: A New Jersey Health Sciences Institution
Allegation: Gender Discrimination
Verdict:
$3,600,000
Defendant: A Texas Academic Medical Center
Allegation: National Origin Discrimination & Retaliation
Settlement: $3,100,000
Defendant: A Managed Care Company
Allegation: Whistleblower Retaliation
• Bullet points
enter picture
THE CHALLENGES
• Melting pots
– May create misunderstandings and lead to claims of discrimination
or harassment.
• Demanding and stressful work
– Management preoccupation with other duties may not be present
to receive complaints or monitor disputes.
• Politically charged atmosphere
– May lead to an ‘us versus them’ mentality.
• Highly regulated
– Labyrinth of complex statutes, regulations and guidelines
determine obligations.
• High profile employer
– Public image and prejudice issues.
THE RESULTS
•
•
•
•
•
Higher retentions
Mass/Class retentions
Higher Premiums
Non-renewals
Exclusionary language
Management Liability: Captive-Bound
• Heightens awareness of coverage terms
• Reality of coverage options
– Premium
– Copays, coinsurance, sub-limits
– Exclusions
• Evolution of insurance program
– Philosophy of integrated program
– Desire/need to purchase less insurance
• Risk tolerance of organization
– Develop on other lines of insurance with more defined risk
mitigation strategies
– Evolve retention in captive/reinsurance levels
Management Liability: Excitement about Claims Mitigation
• Frequency and type of claims
• Evolution of risk mitigation strategies
– Common board and/or governance documents
– Common peer review practices
– Robust contract oversight: IT; common contract provisions; required process
for contract review and termination
– HR Infrastructure:
robust HRIS; centralized processes and management;
standardized tools; audit capabilities
• Grants focus on management liability risk mitigation
– Just Culture
– External peer review
– Leadership development
• Collaboration with General Counsel
I Know Nothing
Management Liability: Communication to Sustain Engagement
Do:
• Review of captive meeting messages with key leaders
• Clarify role of board members in the context of claim information
• Create context for claim information with industry claim and
coverage trends
• Be prepared to share information that is both appropriate and
comprehensive on individual claims, anticipate questions, and know
the answers to those questions
Consider:
• Captive meeting should not be first time claim information is
provided to executives/board members
• Relationship between allegations in a specific lawsuit and decisions/
actions of Captive Board members wearing another hat
Data is Key!
Current data challenges:
• Lack of system wide data
• Data stored in organizational silos – H.R./Firms/Carriers
• Lack of historical data – inability to identify trends in
frequency, severity and aggregate exposures
• Data aggregation is cumbersome…if not impossible
Impact to Captives:
• Inability to convey facts through data on frequency, severity
when negotiating retentions with carriers
• Inability to segregate white noise v. material exposures and
trends
• Inability to monitor and inform Boards of emerging trends
Data is Key!
Strategies to overcome data challenges
Ideal: Migrate and manage all claim data on single platform
Do:
• Establish and communicate Top-Down strategy for KPIs that
need to be tracked/reported
• “Tomato v. Tomahto” – establish a consistent nomenclature
• Actively reassess data/metrics needs
• Standardize/”codify” data to compare Apples to Apples
Don’t:
• Take an “All or nothing” approach to data/metrics
• Collect data at the expense of data quality
• Limit yourself to your data
• Stop