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Risk Management 101September 13, 2017

Presented by:

Venyke Harley, Loss Control Manager

Cindy Martellini, Claims Manager

Leigh Stoner, Underwriting Manager

Risk Management is a Team Effort

Hard market cycles• 1972-1974• 1976-1979• 1984-1988• 2000-2003• 20??-20??

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South Carolina Municipal Insurance Trust

• SCMIT

• Worker’s compensation pool for SouthCarolina municipal employees

• Created in December 1983

• 120 cities, towns and utilities4

South Carolina Municipal Insurance andRisk Financing Fund

• Property and Liability pool for SouthCarolina cities and towns

• Created in October 1, 1990

• 112 cities and towns

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History of Pooling Programs

• Number of public entities in pooling

• It is believed to be in excess of 75,000 orroughly 80% of all public entities

• Annual member pool contributions

• P&C $5 billion to $7 billion

• Benefits $8 billion to $10 billion

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National Public Entity Market (87,849 agencies)

Source: Public Agency Risk Sharing Authority of California

15%

42%

3%

40%

School Districts

Cities/Towns

Counties

Special Districts

Similar to an insurance companybut different:

• Owned and controlled by members• Sole purpose is to cover members’ risks• Focus on coverage and control of members’

risks

SCMIT Board of Trustees

Brian Carter (chair), city administrator, City of West Columbia

Jake Broom (vice chair), administrator, City of Goose Creek

Gary Coleman, administrator, City of Laurens

Caitlin Corbett, assistant administrator, City of Camden

Trey Eubanks, administrator, City of Mauldin

Iris Hill, town administrator, Town of Edisto Beach

Phillip Mishoe, town administrator, Town of Central

Randy Osterman, fire chief, City of Florence

Scott Tanner, administrator, City of Manning

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SCMIRF Board of Trustees

Todd Glover (chair), administrator, City of North Augusta

Dennis Pieper (vice chair), manager, Town of Fort Mill

Robert Garner, councilmember, City of Union

David McCuen IV, assistant city manager, City of Anderson

Carl Ritchie, police chief, Town of Mount Pleasant

Michael Sell, assistant city manager, City of Greer

Rebecca Vance, manager, City of Cayce

Julie Wilkie, assistant city manager, City of Greenwood

Natalie Zeigler, manager, City of Hartsville

SCMIT Financial Update

How SCMIT is funded: Where the money goes:

84%

0%

16%Revenues

Net premiumsearnedOther income

Interest income

76%

5%

6%

3%6%

1% 3% Expenses Total claimsexpenseClaims servicecontractor feesReinsurance andbroker feesSIT & SIF

MASC admin fees

Grants & awards

Other

SCMIRF Financial Update

How SCMIRF is funded: Where the money goes:

93%

0% 7%

Revenues

Net premiumsearnedOther income

Interest income

58%

28%

9%0%

1% 1%3%

ExpensesTotal claims expense

Reinsurance expense

MASC admin fees

Investment and bankfeesSoftware maint, deprand amortization

Other

Departmentalexpense

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possibility of loss or injury

Definition of Risk

Good risk management is goodmanagement.

Risk Management Institute Details

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SCMIT Grants• Soft Body Armor

• Fire Service Equipment

• Public Works Equipment

SCMIRF Grants• Law Enforcement Liability Reduction

Now up to $4,000, includes background checks,psychological testing, and post-offer drug tests

Law Enforcement Selection and Hiring

Law Enforcement Selection and Hiring

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Fundamentals of Loss Control

Definition of Loss Control

Loss control is a risk management technique thatseeks to reduce the frequency and severity of losses.

A loss control program should help cities reduceclaims or losses through safety and risk managementefforts.

Glossary

Total number of claims or claims count

• Counts incidents for which costs are incurred(otherwise, it is a “notice only”)

• Frequency

• Does not directly impact premium

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Glossary

Total incurred cost or “total incurred”

• Measured in $

• Severity

• Impacts premium

• Costs paid and funds set aside to be paid22

Deaths• Lake City (1984)

• Florence (1985)

• Mt. Pleasant (1985)

• Estill (1986)

• Greenwood (1986)

• (2) N. Myrtle Beach (1987)

• Pageland (1987)

• Darlington (1988)

• North Augusta (1989)

• Florence (1989)

• Surfside Beach (1992)

• Georgetown (1992)

• Orangeburg (1993)

• Clinton (1994)

• Georgetown (1994)

• Cheraw (1998)• Orangeburg DPU (1998)• Marion (1999)• Camden (2000)• Newberry (2001)• Surfside Beach (2002)• Laurens (2003)• Orangeburg (2004)• Moncks Corner (2006)• (2) Moncks Corner (2007)• (2) Cheraw (2011)• Aiken (2011)• Aiken (2012)• Forest Acres (2015)• Conway (2016)• Spartanburg (2017)

Overview• Hazards can be physical, environmental , or behavioral

• Look for possible hazards originating with people,equipment, material, or environment

– Consider consequences of miss-use, lack of maintenance,error, etc.

• Evaluate and prioritize

• Take action to eliminate or control

• Document and communicate results

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Value exposed to loss:

• Liability

– Net income

– Personnel

• Property

– Tangibleo Realo Personal

– Intangible

o Reputation

Perils (cause of loss):• Natural• Human• Economic

Emanuel AME ChurchShooting Victims

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Consequences of a LossImpact on common objectives:

• Continuity of operations

• Stable revenues and expenses

• Humanitarian concerns

• Fulfillment of legal requirements

Identifying Loss Exposures• Surveys and questionnaires

• Loss histories– monthly claims reports

– 5 year raw loss

– SCMIT and SMIRF Annual Loss Control Report Cards

• Financial statements

• General records and documents

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Identifying Loss Exposures• Flow charts - succession planning

• Consultation with experts

– Underwriting staff

– Claims staff

– Loss control staff

– Safety training vendors, equipment manufacturers, cityattorney, labor attorney, general liability hotline

Examining Risk Management Options

• Avoidance

• Loss control• Loss prevention

• Loss reduction

• Risk retention

• Risk transfer• Insurance

• Hold harmless / indemnification provisions

Examining Risk Management Options

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Selecting Program

Establish priorities:

• Forecast frequency and severity of losses

• Effects of risk control or risk financing

• Costs of implementation and monitoring

Selecting Program

Also consider:

• Organizational objectives

• Political climate

• Entity’s risk tolerance

• Legal limitations

• Budget

Implementing Program

• Technical decisions - what

• Managerial decisions - how

• Plan the program

• Communicate to various constituencies

• Lead the organization

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IdentifyExposures

ExamineOptions

SelectImplement

Monitor Decision-makingmodel for riskmanagement

program

Loss Control Report Card Visit

Loss Control Risk Self-Assessment Visit

• Started in 1999• Based on common causes of

common claims• Backbone of safety/risk

management programs

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Risk Self-Assessment

Experience Modifier

• Used to adjust the annual premium based on previous lossexperience.

• Three years of loss experience are used to determine theexperience modifier.

• The three years include not the immediate past year, but thethree prior.

• Ranges from 0.5 to 2.5• Yearly change in experience modifier is capped at +/-25%.

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Sunnytown Summary of Losses

Year

Open

Claims

Closed

Claims

Total

Claims

Total

Incurred

Losses

Experience

Modifier

Unmodified

Premium

Modified

Premium

Loss

Ratio

2016 6 8 14 $85,000 0.50 $300,000 $150,000 28.3%

2015 0 9 9 $6,000 0.50 $250,000 $125,000 2.4%

2014 0 9 9 $19,000 0.51 $225,000 $112,500 8.4%

2013 0 2 2 $15,000 0.51 $205,000 $102,500 14.6%

2012 0 7 7 $4,000 0.56 $215,000 $107,500 1.9%

2011 0 15 15 $30,000 0.50 $200,000 $100,000 15.0%

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Employee Injuries by Day of Week

Police have most claims

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Public Utilities have highest claims cost

Employees 26-34 have the most claims

Employees 45-54 have highest claims cost

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Employees 1-3 years have most claims

Employees 1-3 years have highest cost

Property and Liability Claims Summary

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Liability Claims Summary

Hazard Awareness

Hazard

Any condition or practice that has thepotential to cause harm, including injury ordeath to persons and damage to property.

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Awareness/Recognition

• Critical part of any safety program

“can’t fix what you don’t know”

• General Rule of Thumb:

If it looks like it could cause a problem, then itprobably IS a problem.

How to apply corrective action:Hierarchy of Controls

Eliminationor

Substitution

EngineeringControls

Warnings

Training &Procedures

PersonalprotectiveEquipment

Why Conduct a Job Hazard Assessment?

• OSHA requires (at 29 CFR 1910.132(d)) that employersassess the workplace to determine whether the hazards theiremployees face necessitate the use of personal protectiveequipment.

• Each employee not provided with PPE or training isseparate violation

• Reduce absenteeism, increase productivity, increase morale

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Job Hazard Assessment orJob Safety Assessment

• breaks a job into basic steps• identifies the hazards associated with each step• prescribes elimination of or controls for each hazard• identifies training needs

Priority jobs:• highest injury or illness rates• potential to cause severe or disabling injuries or illness• new or changed in process or procedure• complex enough to require written instructions

© BLR®—Business & Legal Resources

Eye and Face Assessment• Acid or caustic liquids

• Gases or vapors

• Light radiation

• Hazardous liquids

• Molten metal

• Airborne dusts or particulates

• Vapors or fumes

• Lack of adequate oxygen

Respiratory Protection Hazard Assessment

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• Identify the specific source(s)

• Review the work processes

• Monitor the exposure

© BLR®—Business & Legal Resources

Respiratory Protection Hazard Assessment

• Falling objects

• Exposed electrical conductors

• Low-hanging obstructions

© BLR®—Business & Legal Resources

Head Hazard Assessment

• Falling, rolling, or sharp objects

• Electrical hazards

• Slippery walking surfaces

• Hazardous materials

• Cold weather conditions

Foot Hazard Assessment

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Hand Hazard Assessment

• Skin absorption of harmful substances

• Severe cuts or lacerations

• Severe abrasions

• Hot or cold materials or objects

• Hazardous materials

• Welding hazards

• Heavy, sharp, or rough materials

• Moving machinery

Clothing Assessment

• Selection

• Orientation

• Ongoing training

• Wear and care

Personal Protective Equipment

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Heinrich’s Incident Ratios

1

29

300

3,000

Disabling injury or fatality

Serious injuries

Minor injuries or near misses

Uncontrolled hazards

Consequences of not Analyzing Incidents

The Tip of the Iceberg

Direct costs – insured (future insurance premium costs)

Indirect costs – uninsured, out of pocket, hidden

• Loss of time for incident analysis• Repair of damage to property, vehicles, equipment• Overhead while work disrupted• Morale, increased absenteeism• Cost of overtime or training for replacement

worker• Poor community relations

Root Cause Analysis

A process that usesexperience and logicalreasoning to determinewhich conditions or eventswhich, if eliminated, wouldhave prevented the incident.

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OSHA General Duty Clause

“…workplace free from recognized hazards.”

So if you have an incident and no analysis ion isdone, could you have a recognized hazard thatyou have not addressed?

Accident Investigation Incident Analysis

Why Analyze Incidents?• Determine the root cause

• Identify corrective actions

• Prevent the incident from happening again

• Document the incident

• Complete OSHA-required reporting

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OSHA Wants to Know

• Employee fatality -- notify OSHA in 8 hours

• Employee hospitalized, amputation, or eye loss --notify OSHA within 24 hours

• Document each injury

• Record injuries on OSHA 300 Log

• Post OSHA 300 Log

OSHA Wants to Know

Incident Analysis Team• Employees trained to

investigate incidents

• Safety committee member

• Supervisor

• Safety manager

• Department head

• Manager/administrator

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“Perhaps the single largest impedimentto successful implementation of risk

management is the traditionalorganizational culture with its entrenched

silos.”

-Associate in Risk Management 54 Text

Analyze All Incidents

• Workplace fatality

• Lost time from the job ordays away from work

• Restricted ability to work

• Medical treatment

• First aid

• Near-miss incidents

When to Analyze?

• Immediately after incident

• Interview witnesses beforememories fade

• Assess the scene before evidenceis moved, scene disturbed

• Finish analysis quickly

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How to Analyze?

• Check the scene beforeanything has been moved

• Assemble evidence

• Interview the witnesses

• Not looking for a criminal;not trying to place blameon anyone

• Find what, why, and how

Incident Occurs

• Employee immediately reports the incident to asupervisor

• Supervisor treats the injury or assesses need for outsidemedical treatment

• Unless 911 emergency, someone from city shouldtransport to medical facility

• Incident scene is left intact

• Supervisor contacts the incident analysis team

• If able, injured employee completes incident form

Why don’t employees report incidents?

• No procedure

• No training

• Fear

• Additional work

• No follow up from superior(s)

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Questions that Need Answers• What happened?

• When did it happen?

• Where did it happen?

• Who was involved?

• How did it happen?

• Why did it happen?

• How can we keep it fromhappening again?

Review Relevant Documents• Safety policies and procedures

• Job safety analysis

• Standard operating procedures

• Training records

• Incident reports

• Near miss reports

Root Causes of incidents

• Unsafe acts

• Unsafe conditions

• Inadequate procedures

• Personal factors

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Unsafe Acts

• Working at unsafe speeds

• Using equipment unsafely

Unsafe Acts

Unsafe Conditions

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Why is this important?

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Resources• OSHA - Standards, general information

– www.osha.gov or 803-896-7665

• SCOSHA - Training, consultation, publications,

reporting

– www.scosha.llronline.com

• National Institute for Occupational Safety and Health

www. cdc.gov.niosh

www.scosha.llronline.com/scovp/PDF/ConsultFORM.pdf

Resources

Ellyn Learn, Customer Service Manager/Training Coordinator

Contact her at (803) 732-6778 or elearn@scnsc.org

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Kindness

How we approach and respond to others

directly impacts our effectiveness in the

workplace, including our influence on the

frequency and severity of our city’s

workers’ compensation and liability claims.

Types of Insurance Coverage

Property and Liability Coverage• First party coverage

• Third party coverage

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First Party CoverageProvides protection for the physical assets of theinsured

First Party Coverage• Property Insurance

– Building

– Contents

• Automobile Insurance

– Comprehensive

– Collision

First Party Coverage• Inland Marine Insurance

– Mobile equipment

– Signs

– Bridges

– Recreation equipment

– Fences

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First Party Coverage• Time Element

– Loss of business and rental income

– Extra expenses associated with a coveredloss to insured property

• Crime

– Loss of money via robbery, burglary, andtheft

– Employee dishonesty

Third Party Coverage

Protects the assets of the insured by providing

coverage for claims brought by third parties

Third Party Coverage• General Liability

– Includes coverage for bodily injury andproperty damage associated with thepremises and operations of an insured.

• Slips and falls on municipal property,sidewalks, etc.

• Property damage associated with sewerbackups.

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Third Party Coverage• Law Enforcement Liability

– Bodily injury

– Property damage

– False arrest

– False imprisonment

– Wrongful death

Third Party Coverage

• Public Officials Liability

– Provides protection for personal injurytype claims associated with the actions ofpublic officials

– Excludes actions of law enforcement

– Land use claims

– Employment practices liability

Third Party Coverage

• Excess liability

• UndergroundStorage Tankliability

• Special EventsCoverage

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Occurrence vs. Claims Made coverage• Occurrence

– Trigger for coverage is that the claim occursduring the time coverage was in effect

– Broadest form of coverage

– Property insurance always written on thisbasis

– Applies to General Liability and LawEnforcement Liability for SCMIRF

Occurrence vs. Claims Made coverage• Claims made coverage

– Two requirements:

• The claim must occur during the timecoverage is in effect

• The claim must be reported during thetime coverage is in effect

– Public Officials Liability tends to be writtenon claims made basis

Occurrence vs. Claims Made coverage• Terminology:

• Retroactive date–Start date of coverage

• Tail coverage–Also referred to as extended reporting

coverage which allows additional timefor the claims to be reported

–Does not extend the coverage forclaims that occurred after the coveragewas cancelled

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Underwriting Issues for Municipalities• Underwriting differs depending upon coverage

• SCMIRF property coverage

• Replacement cost basis

• No coinsurance

• Uses values provided initially at the timeof the quote

Underwriting Issues for Municipalities• SCMIRF property coverage

• If a building is not insured to replacement cost,policy provision that can provide up to 150% ofthe value scheduled

• Property appraisals on buildings meeting certainvalues to better ensure that coverage is providedto full replacement cost

• Trends all building and contents values annuallyto keep up with changes in building costs

Underwriting Issues: CoinsuranceInsured Replacement Cost of Building $500,000

Actual Replacement Cost of Building $1,000,000

Coinsurance % on policy 80%

Amount of Loss to Building $350,000

Amount of coverage required to meet coinsurance

1,000,000 x 80% = $800,000

Coinsurance calculation (amount insured/amount required x loss)

500,000/800,000 x 350,000 = $218,750

before any deductibles are applied

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Underwriting Issues: Coinsurance• Blanket insurance offered by other carriers

– coinsurance requirement of 90%

• Places the responsibility of insuring to valueon the municipality– If not insured to value, can be a penalty on any

loss paid– Exception in SC for total losses to building by

fire or lightning• The total amount of insurance carried will be

paid even if underinsured via coinsurance

Underwriting Issues for Municipalities

• The differences in the coverage provided areimportant to note. Otherwise, any premiumsavings could soon be exhausted in the claimspayment or the exposure could be excludedaltogether.

The Importance of SchedulesSCMIRF provides coverage for assets that arescheduled.

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The Importance of Schedules• It is important to note the following:

– Building and contents must be scheduled atrenewal• Additions acquired after the renewal date are

covered without additional premium as long asthe value is $1,000,000 or less

– Automobile follows the same reporting format asbuilding and contents

– Builder’s risks must be reported for coverage toapply

The Importance of Schedules• Inland Marine items must be reported within 30

days of acquisition for coverage to apply– No additional premium if valued at

$1,000,000 or less– Minimum deductible of $1,000

• Also applies to rented inland marineequipment

• Policy only includes $10,000 underproperty extensions for rented equipment

Certificates of Insurance

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Certificates of Insurance• Workers’ Compensation

– If COI is not obtained from the subcontractor’sagent before the work commences, employer may

• Be responsible for paying WC premium

• Be responsible for any on the job injury ofsubcontractor

• Have experience modifier impacted, resulting in higherpremiums

Certificates of Insurance• Liability

– Obtain for general liability, auto liability,professional liability, etc. depending upon the workbeing done

– Require naming as an additional insured wherepermitted

– Bonds may be required by statute depending uponthe size of the contract

– Have agent include information in the descriptionarea to ensure there is coverage for the particular jobbeing performed

– Always obtain COIs directly from the insuranceagent…never the subcontractor

Special Events

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Special Events• Exposures

– May or may not be covered by SCMIRF oryour insurance carrier

• Transfer the Risk

– Transfer the risk to the entities providing theservices

• Certificates of Insurance

• Require to be named as an additional insured

Special Events and TULIP• What if the special event is being held by

others on your property?– TULIP

• Renting of municipal facilities to privateparties for weddings, etc.

• Providing space for a farmers market• Low cost, efficient means of ensuring that

negligence of the lessor does not fall onthe municipality

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Basic Facts: Workers’Compensation

SCMIT: Who are we?Self-insurance program meeting needs ofmunicipal and governmental entities for stable,affordable Workers’ Compensation coverage

• 120 members• Write over $14 million in premiums• Paid over $212 million in benefits• Processed over 52,000 claims

Why Workers’ Compensation?• Benefits to the injured employee:

• Replaces lost wages if out of work

• Provides quality medical care

• No Fault coverage

• Benefit to the employer:

• Exclusive remedy for covered injuries

• Less litigation sue to tort action protection

• Required for employers with 4+ employees

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The Cast

• The injured employee

• Department/Supervisory management

• Municipal member management

• SCMIT

• SCMIT Subrogation team

• S.C. Workers’ Compensation Commission

Who is covered?• Employee: any person engaged in

employment by appointment,contract of hire, expressed orimplied, oral or written….

• Can include minors, illegal aliens,contractors, volunteers, and inmates

• Can be “statutory employee” asdefined by law

Elements of a Compensable Claim

In an established employer/employee relationshipthere must be:

1. Injury

2. By accident

3. Arising out of employment and

4. In the course and scope of employment

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Medical Treatment100% of all treatment AUTHORIZED by theTRUST is covered:

• physician, physician assistant fees

• hospital, out-patient clinics

• prescription drugs & medical supplies

• medical rehabilitation

• certain travel expenses

• other treatment as reasonably required

Medical Treatment• SCMIT uses physicians

who:

• Are selected to treatoccupational injuries

• Support modified dutyprograms

• Communicate well withemployer and employee

Medical Treatment• SCMIT uses network physicians, facilities,

pharmacies and providers whenever possible

• Specialized treatment must have prior approvaland be monitored by SCMIT claims staff

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Indemnity Payments• Temporary Total Disability (TTD)

- 66 2/3 % of average weekly wage (AWW)subject to minimum and maximum benefitsfor employees who are out of work on theorders of an authorized doctor

• - 7 day waiting period (does not need to beconsecutive) retroactive after 14 days

Modified Duty• Develop a Modified Duty Plan & follow it

• Use “Light” or “Alternate” Duty

• Utilize a Task Bank

• Does NOT need to be in the same departmentwhere the employee ordinarily works

• Encourage physician support by providing jobtask descriptions and analysis to be given totreating doctor at employee appointments

Benefits of Modified Duty• Can provide a rehabilitative transition from full

disability to regular duty

• May be a viable alternative to costly therapyand rehabilitation programs

• If modified duty is refused by employeereleased to such duty, benefits can be suspended

• Provides a productive way to utilize employeesand save premium dollars

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Concluding Claims• Medical only losses - pay medical bills and/or

minimal lost time from work - the claim ends

• Injuries with permanent impairment -permanent loss of use of the injured body part,AMA Guidelines used to provide ratings

• Disability Rating - determined by theCommissioner - can include additional factorssuch as educational level, type of workperformed

Permanent Partial DisabilityTypical Scheduled Injuries

– 300 weeks for the back

– 220 weeks for the arm

– 185 weeks for the hand

– 195 weeks for the leg

No. of weeks x % disability rating x comp rate

WC Commission Proceedings

• Informal ConferenceClaimant, SCMIT representative, employermeet with Commissioner - usually no attorney

• HearingsSCMIT, Member, claimant and attorneys forclaimant and employer meet withcommissioner (usually over disputed issues)to resolve claim - formal procedure

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Permanent and Total Disability

• Maximum compensation is 500 weeksexcept for cases of paraplegia, quadriplegia,or permanent brain damage

– Lifetime benefits

• 2017 maximum weekly comp rate is $806.92for a worker making around $62,908

• Total payable for 500 weeks is $403,461

Responsibilities• Employee - report claim to employer

quickly, treat with employer authorizedprovider, be mindful of two year statute oflimitations

• SCMIT & member - report claim quicklyso SCMIT can submit within 10 days andavoid fines, provide medical care, issue losttime benefits when disability is greater thanseven days

Prompt Claims Reporting

• Prompt/appropriate medical care - directs

treatment to network providers/pharmacies to

ensure treatment is matched to the injury

• Immediate Investigation - gets facts beforestories change and people forget, makes itpossible to determine compensability andsubrogation potential

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Immediate Claims Reporting

• Avoid fines by the Workers’ CompensationCommission for claims not filed within the 10day statutory requirement

• Early investigations mean SCMIT only paysfor those claims that you owe

• Remember…..filing a First Report of Injuryis NOT an admission of compensability orliability

Limiting Litigation• Establish and maintain communication

and trust with employee from the start

• Investigate, don’t intimidate

• Check on employee weekly when possible

• Provide support/communication throughout

• Remember after employee returns to work, casemay still be open

• Communicate! Communicate!

Subrogation• SCMIT may recover funds from a third party

who is responsible for the accident thatresulted in an injury to an employee

• Auto Accidents

• Defective parts and equipment

• Court Ordered restitution

• Property owners’ liability, such as dog bites orpoorly maintained property

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Controlling Cost• Prompt reporting• Modified Duty• Proper medical care• Communicate• Use PPO network• Assist with subrogation efforts• Investigate thoroughly• Be involved/concerned/caring

SCMIT Claims Department

CindyMartellini,

Claims Manager

TonyDesChamps

Sr. Adjuster

Sue Grist

Sr. Adjuster

JacciBarker

Sr.Adjuster

MikeWoodall

Sr.Adjuster

BrendaKeglerAssoc.

Adjuster

JaniceSmith

Admin.Asst.

Sewer Backups:Avoiding the Pitfalls

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Elements of Negligence

• A legal duty owed

• A breach of the duty owed

• A proximate cause

• Actual loss or damage

What is the duty owed?

• To keep sewage out of residents’ homes?

Not necessarily...

• Duty owed - operating and maintainingmunicipal sewer lines properly

Sewer Backups and Negligence• Ownership Liability

• Not automatic “at fault” situations

• No strict liability

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South Carolina Tort Claims Act• Ownership

• Not an automatic conveyance ofliability

• Budgetary constraints

• Strong defense

• Miles and miles of sewer collection lines

• DOT

• Not liable for every accident that occurson state roads

Sewer Backup Response

• Rapid response• IMPORTANT – how

city/town responds justas important as facts ofclaim

• Uninformed staff =possible liability whennone would have existed

• Suggested outline of asewer claim

Outline of a Sewer Claim• No admittance of fault

• Even in face of tremendous pressure, avoid

the temptation; Feel sympathy but do not

agree to “undeliverables”

• Remember: ownership and liability are not one

and the same

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Outline of a Sewer Claim• Role of employee - to determine nature of

problem but not to determine fault

• Claims adjuster (“bad guy”) - role is to

determine fault and assist in resolving damages

if city/town is negligent

Outline of a Sewer Claim

If non-waiver of defense agreementis signed

No speculatingExtraneousremarks to a

minimumCleaning only

Remember 3 Rs:

No renovating,replacing, or

repairing

The Political Realities• Elected representatives sometimes involved

• Can be good or bad - depends on whether or notcity has been proactive in educating councilmembers

• EVERYONE (staff and elected officials) toavoid well-intentioned comments• i.e. “Don’t worry about it - we’ll take care of

it”….• “Created liability”- not covered by SCMIRF

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Avoiding Other Pitfalls

• Animal Claims• Water Service Claims• Slip and Fall Claims• Pot Hole/Utility Cut Claims

Animal Claims

Animal Claims

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Animal Claims• Squirrels and Swans

– Do not provide advance notice to city

– Just electrocute themselves or bite

• City

– No notice

– No invitation extended to chew or bite

CITY - DID NOTHING TO CAUSE, HAD NONOTICE

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Therefore…• City not liable• In order for the city to be liable:

– Prior notice of the problem and failure to doanything about it AND/OR

– City must have created the problem• City workers:

– Respond to complaint, be polite and as helpful aspossible

– Do not make any promises, advise city’sinsurance carrier will be in touch

Water Damage Claims

Do we owe these claims?

Water Damage Claims

• For the city to be liable….

– City must have notice

• City pipe has burst and the city does notrespond

– City must have caused the problem

• City cut the pipe, the city turned water onwhen it should not have, etc.

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Water Damage Claims

• Common water damage claim occurs whenwater service is turned on

• City - procedure should been in place forcutting service on and off, procedure must befollowed

• Document, document, document

• Documentation - maintained and kept in onelocation preferably by one person

Therefore….• City not liable

• In order for the city to be liable:– Prior notice of the problem and failure to do

anything about it AND/OR

– City must have created the problem

• City workers:– Respond to complaint, be polite and as helpful as

possible

– Do not make any promises, instead advise that city’sinsurance carrier will be in touch

Slip and Fall ClaimsDo we owe these claims?

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Slip and Fall Claims• Take pictures

– Close up pictures

– Pictures that give an idea as to the overalllay of the land

• Close up shots - use something in the picturethat will provide some idea as to scale (a coin,a ruler, a hand, etc.)

Slip and Fall Claims• Ownership - can be irrelevant

• Lyman case - imposed liability due to the factthat the location where the loss occurred wasin the city limits

• Whether or not the city had notice and whetheror not they created the problem helps todetermine the liability position

The Lyman CaseVaughan v. Town of Lyman - “The city or towncouncil of any city or town of over onethousand inhabitants shall keep in good repairall the streets, ways and bridges within thelimits of the city or town and for such purposeit is invested with all the powers, rights andprivileges within the limits of such city or townthat are given to the governing bodies of theseveral counties of this State as to the publicroads.”

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Therefore….• Lyman case - can be an issue

• In order for city to be liable:– Prior notice of the problem and failure to do anything

about it AND/OR

– City must have created the problem

• City workers:– Respond to complaint, be polite and as helpful as

possible

– Do not make any promises, instead advise that city’sinsurance carrier will be in touch

Pot Hole/Utility Cut Claims

Do we owe these?

Pot Hole Claims• Pot holes - often occur due to weather

conditions and wear and tear - the city maynot be aware of their existence

• City - no notice, no involvement in causingproblem

• Watch out for constructive notice - should thecity have known (police, public works)

• Lyman case - could complicate matters (publicareas)

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Utility Cuts• If the city makes a utility cut….

• They did create it and….

• Cannot claim lack of notice

• Mark the area with barricades, cones, steelplates, signs, etc.

• Arrange for permanent repair to be made assoon as possible

• Gravel should be checked daily

Remember….• Similar claims/different causes - for

example, while we can deny some types ofelectrical claims we may have to pay others

• Claims - looked at on a case by case basis

• “Will you cover the city if it is sued?” -depends on what the causes of action are

• Claims - denied if the city is not liable butpaid if the city is responsible

Lessons Learned• Crime Claims

• Employee embezzlement

• ALL Law Enforcement Claims –

• No longer primarily restricted to pursuits

• Very unfavorable climate

• Video cameras, body cameras, cell phones, socialmedia

• Public Officials Claims

• Work together and follow policies and procedures

• Not the place for politics

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Lessons Learned• Employment Claims

• Expensive to defend

• Documentation and Records

• The difference in denying or accepting liability

RMS Resource Overview

Website Tipswww.masc.sc

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Website Resources• Model fire service and law enforcement policies• Grant applications• RiskLetter• Risk Management Manual• Training information and registration

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Online Training Center• Partnership with SCMIT, SCMIRF and

LocalGovU• Courses available 24/7/365 from any computer

with Internet access• Free to all employees• Local administrator rights• Easy access from www.masc.sc (keyword:

RMS training)

SCMIRF law enforcement online training• Partnership with the PATC• Available 24/7/365• Video training on constitutional law• Approval from the SCCJA for in-service training• Contact Venyke Harley to request the agency code

for login and a user guide.

SCMIRF General Liability Hotline• 10 free hours per year with the designated

general liability attorney.

• Contract review

• Contact Terri Camp, SCMIRF claims analystat tcamp@masc.sc, 803.933.1272

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SCMIRF Labor Hotline• 10 free hours per year with the designated

labor attorney.

• Handbook review

• Contact Cindy Martellini, claims manager atcmartellini@masc.sc or 803.933.1235

2017 Training Workshops

• Employment Liability• September 26, 27, and 28

• SCMIT and SCMIRF Annual Meeting• November 9

Customized training• Onsite training by RMS staff• Sample topics

• supervisor liability training• incident analysis training• defensive driving• risk management 101• mindfulness

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Assistance• OSHA

– www.osha.gov

– Standards, general information

• SC OSHA– www.scosha.llronline.com

– Training, consultation, publications, reporting

*Take advantage of SC OSHA consultations. Recommenddoing an industrial hygiene survey (inventory of hazardous

materials, review HAZCOM plan, air sampling, noise levels,etc.)

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Questions