2017 Financial & Risk Management Forum: Are you Inspection Ready?

ARE YOU INSPECTION

READY?

Bill Smith EVP Claims And Risk Management

Tyrone Silva Risk Manager/Contract Management

What are we talking about ?

What are we talking about ?• What prompts an OSHA inspection?

Many different circumstances can prompt an OSHA inspection, ranging from a workplace death to mere chance. The following are some of the reasons why OSHA may inspect your facility:• Catastrophes and fatalities• Employee complaints• Referrals, which can come from any entity, including

another government agency• Programmed inspections, in which worksites are randomly

selected, or based on emphasis programs, injury rates or previous citations

• Follow-up inspections

OSHA Penalties !!!

• Increase

• What about the Civil side

We See It Everyday and So Does Everyone Else?

Here Is What They Say and Use Against You ?

Protect Your Company With…• Right Insurance Policy

• Right TPA that will handle your claim and know what you do

• Right Training and documentation

• Right Experts hired that understand the responsibilities of each party

• Right legal representation that knows all the above and how to manage the CHESS GAME that is about to be played

On the Initial Notice of Loss and Investigation

• Who is on the Rapid Response Team?

• Company Safety Director

• Insurer

• Outside Counsel

– Independent Adjuster (IA)

– Experts

Initial Notice of Loss and Investigation

• Outside Counsel’s Role

• Coordinate response and provide early evaluation of liability and exposure

– Engage and direct experts and IA’s

– Marshal and preserve evidence

– Witness interviews

– On-scene investigation

– Interface with government investigators (OSHA)

Spoliation

• What is spoliation?

• Destruction/failure to preserve evidence necessary for contemplated or pending litigation

• Notice of injury ≠ notice of contemplated litigation

• What are the consequences?

• Presumption that evidence would have been harmful

• Range of sanctions

Pay Attention

OSHA Investigation

• How, when, and why OSHA gests involved

• The process

• OSHA's authority (range of potential sanctions)

• Employer's obligations and rights

• Potential impact on civil claims

• Preparing for the OSHA investigation

• Participating in the OSHA investigation

Employer Responsibilities• Under the OSH law, employers have a responsibility to provide a safe workplace.

This is a short summary of key employer responsibilities:• Provide a workplace free from serious recognized hazards and comply with

standards, rules and regulations issued under the OSH Act.• Examine workplace conditions to make sure they conform to applicable OSHA

standards.• Make sure employees have and use safe tools and equipment and properly

maintain this equipment.• Use color codes, posters, labels or signs to warn employees of potential hazards. • Establish or update operating procedures and communicate them so that

employees follow safety and health requirements.• Employers must provide safety training in a language and vocabulary workers can

understand. • Employers with hazardous chemicals in the workplace must develop and

implement a written hazard communication program and train employees on the hazards they are exposed to and proper precautions (and a copy of safety data sheets must be readily available). See the OSHA page on Hazard Communication.

• Provide medical examinations and training when required by OSHA standards. • Post, at a prominent location within the workplace, the OSHA poster (or the state-

plan equivalent) informing employees of their rights and responsibilities.

Employer Responsibilities cont.• Report to the nearest OSHA office all work-related fatalities within 8 hours, and all work-related

inpatient hospitalizations, all amputations and all losses of an eye within 24 hours. Call our toll-free number: 1-800-321-OSHA (6742); TTY 1-877-889-5627. [Employers under federal OSHA's jurisdiction were required to begin reporting by Jan. 1, 2015. Establishments in a state with a state-run OSHA program should contact their state plan for the implementation date].

• Keep records of work-related injuries and illnesses. (Note: Employers with 10 or fewer employees and employers in certain low-hazard industries are exempt from this requirement.

• Provide employees, former employees and their representatives access to the Log of Work-Related Injuries and Illnesses (OSHA Form 300). On February 1, and for three months, covered employers must post the summary of the OSHA log of injuries and illnesses (OSHA Form 300A).

• Provide access to employee medical records and exposure records to employees or their authorized representatives.

• Provide to the OSHA compliance officer the names of authorized employee representatives who may be asked to accompany the compliance officer during an inspection.

• Not discriminate against employees who exercise their rights under the Act. See our "Whistleblower Protection" webpage.

• Post OSHA citations at or near the work area involved. Each citation must remain posted until the violation has been corrected, or for three working days, whichever is longer. Post abatement verification documents or tags.

• Correct cited violations by the deadline set in the OSHA citation and submit required abatement verification documentation.

• OSHA encourages all employers to adopt an Injury and Illness Prevention Program.

General Duty 5 (a) (1)

OSHA Process • Look to a Vertical standard first • The general duty provisions can be used by OSHA only

where there is no standard that applies to the particular hazard and the employer has its own employees exposed to the alleged hazard.

• All the following elements are necessary for OSHA to prove a general duty clause violation:

• 1) The employer fails to keep the workplace free of a hazard to which its employees were exposed.

• 2) The hazard was recognized.• 3) The hazard was causing, or was likely to cause, death or

serious physical harm.• 4) There was a feasible and useful method to correct the

hazard.

OSHA Process

• OSHA sometimes gets it wrong• In many situations, OSHA’s 5(a)(1) citations have incorrectly alleged

that a violation was the failure to implement certain precautions, corrective measures or other abatement steps rather than the failure to prevent or remove a particular hazard.

• The occurrence of an accident does not necessarily mean that an employer has violated Section 5(a)(1), although the accident may be evidence of a hazard. OSHA has instructed its compliance officers that accident facts may be relevant and must be gathered, but a 5(a)(1) citation must address the hazard in the workplace, not the particular facts of an accident.

• Any hazard for which a Section 5(a)(1) violation is issued must be reasonably foreseeable.

• Hire a good OSHA attorney if it’s important for you to fight the citation… NBIS has a good referral in Michael Rubin

OSHA Process

• Employers have the right to an opening conference. This may be the most important stage of the inspection because it is the time when employers can:

• Negotiate to narrow the scope of the inspection.

• Ask questions about the purpose of and probable cause justifying the inspection.

• Try to establish ground rules with OSHA about how the inspection may proceed, from the collection of documents (through written requests only), to interviews (scheduled in advance), and physical access to the facility (only with a management escort).

Employer Rights

The Walkaround

After the opening conference, the inspector, accompanied by management and employee representatives, will check the safety and/or health hazards in the complaint. The inspector may decide to check for other hazards or even to expand the inspection to cover the entire workplace.

Employer Rights The Closing Conference

The inspector is required to have a closing conference, jointly or separately, with company and employee representatives at the end of the inspection. if management wants separate closing conferences, OSHA will hold the employee representative conference first to allow for any more employee input. OSHA will discuss "apparent violations" and ways to correct hazards, deadlines, and possible fines. A second closing conference may be held if needed information, such as sampling results, was not initially available.

Employer Rights The employer must not discriminate against employees for health and safety activity. If the employer contests an OSHA citation, the employees have a right to elect "party status” before the Occupational Safety and Health Review Commission (an independent agency). They must be notified by the employer if the employer files a notice of contest or a petition for modification of an abatement date. They have a right to contest the time OSHA allows the employer for correcting a hazard. (Employees, unlike employers, cannot contest other aspects of the citation before the Review Commission). A contest must be in writing and must be filed within 15 working days after receipt of the citation.

Employer Rights OSHA Citations

OSHA may chose to issue citations and financial penalties to the employer for violating specific OSHA standards or regulations or for violating the "general duty clause" Section 5(A)( I) of the Act OSHA does not cite or fine employees for violation of their responsibilities. OSHA must generally issue any citations within six months of the occurrence of any violations. Citations are supposed to be mailed to employee representatives no later than one day after the citation is sent to the employer. Citations can also be malted to any employee upon request.

Employee Responsibilities Employee Misconduct as a defense:• The employee misconduct defense has several elements, all

of which must apply for the employer to prevail.• As set forth in OSHA’s Field Operations Manual, to prevail

on the affirmative defense of “Unpreventable Employee Misconduct—Isolated Incident,” the employer must show that it:

• Established a work rule adequate to prevent the violation.• Effectively communicated the rule to employees.• Established methods for discovering violations of work

rules, and yet did not know about an isolated violation of the work rules.

• Established effective enforcement of the rule when violations are discovered.

Employee Misconduct Simple Example where an employee was caught not wearing PPE:

• In this case the employer would have sufficient evidence to prove the employee misconduct defense if it can demonstrate that:

• The employer has an established PPE policy that addresses the type of PPE for which the employer was cited.

• Affected employees (including the employee who was found not wearing the PPE) have been trained on the PPE policy.

• The employer conducts regular audits of the workplace to ensure employees are following the PPE policy.

• Employees are disciplined when they are found to be in violation of the PPE policy (or other safety rules).

• Documentation is the key to all of these elements. In OSHA’s mind, if it’s not documented, it didn’t happen.

Employee Misconduct In most cases employers are able to produce a procedure and some training records, but often struggle to present written evidence that they are actively supervising their employees to ensure compliance with safety policies, and struggle even more to demonstrate that they enforce violations through discipline. As such, an employer’s policies should be written and readily accessible. Employers should also maintain written records of training, including dated sign-in sheets, training agendas, test/quizzes, document audits and audit findings, and issue written discipline (even document it when you issue a verbal warning).

Civil Claims While quickly settling an OSHA citation arising out of an accident may seem at the time to be the easiest way to put the matter behind you, making a hasty decision could result in unintended consequences and potential civil liability down the road. Not only can accepted citations form the basis for a future repeat OSHA citation, but accepted citations could be used against the company by the injured individual in a civil action for negligence. Therefore, the employer should only accept citations that are factually and legally accurate.

How do I prepare? The Owner/User Has Critical Responsibilities Immediately Following an Incident• The Crane Owner/User is the most important entity immediately

following an incident.

• Preservation of the evidence is critical in order to accurately identify and determine the cause(s) of an accident.

– Secure the scene-no one touches anything

– Contact your team IMMEDIATELY

– Document the scene and get all witnesses together

– Gather operators manual and have a copy ready

– Copy of any plans and procedures

– Copy of all equipment inspections

– Copy of maintenance records

– Take progressive photos-wide-closer-closest of the scene and particularly what you perceive as important evidence

– Know how to deal with OSHA

Preservation of Critical Data• Locating and preserving evidence is critical

at this point

• Your “team” must be at the site within 24

hours but no more than 48 hours after the

incident in order to do a thorough analysis.

• As time passes, evidence can change or

disappear if the site is not properly secured.

• Workers talk and suddenly they believe

something they didn’t see…..or couldn’t see

Why Do You Need a Team?• Many claims are based on invalid or untrained

experts that profess to know cranes and qualified to make unsubstantiated claims.

• During depositions, the attorney must be knowledgeable to understand and react to incorrect answers from other experts. (B30’s plus manuals plus industry knowledge)

• Use of experts to prepare questions and plans are critical to developing the case. But this requires all members of the team being involved from the beginning

Train the Team• Ensure contracts and tickets are properly

written.Ensure tickets are signed before work starts and when the work is finished.

• Ensure that all members have immediate contact information (cell phones, etc.), as well as any backup personnel.

• Employees have cell phones…..take photos ASAP!

• Make sure your employees know who to contact and what to do and say or not to say

How do I prepare? • Here are some ways you can prepare:

• Know What To Expect. When an OSHA inspector arrives, they should show you their credentials. ...

• Assign Responsibilities

• Perform Hazard Assessments & Safety Trainings

• Keep Good Records

• Know Your Rights

• Copy the Inspector (make notes, photos, etc.)

• Perform Periodic Internal Audits

NBIS

• In understanding the needs of the Association, and our insured, NBIS provides many services in addition to an insurance policy to assist in the preparation of OSHA and Civil liabilities.

• Here are some examples:– RMSS Risk kit– Contract Management and Risk Transfer– Driver Training – Safety & Health Training– Driver behavior monitoring (Preventive)– Driver alerts with aftermarket devices (Preventive) – Camera’s outside the windshield and down both sides of the

Equipment (Reactive)

NBIS

Just when you think you are protected and have done your best to prevent an accident! You may have to look back and think again

ARE YOU INSPECTION READY NOW!!!!

• Think about what we talked about ????

• Think about what you do now????

• Are you Inspection Ready???

THANK YOU