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Foundation Insurance Group 803 West Broad Street Suite 500 Falls Church, VA 22046 703-988-3750 (phone) 800-203-2811 (toll free) www.foundationinsurancegroup.com info@figva.com
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 When Apologies Aren't Enough: Insuring Against Celebrity Endorser Screw-Ups
In the wake of an infidelity scandal, Tiger Woods apologized to his family, his fans - and the companies he endorsed. Collectively, the companies that used the golf great in their marketing lost an estimated $12 billion when his brand turned sour. With a loss that big, it's no surprise that there would be insurance coverage against celebrity endorser disgrace.
AIG recently launched a policy with small and midsize companies in mind called Celebrity Product RecallResponse, one of the newest - but by no means the first - coverage plans for when celebrity endorsers go bad. It's applicable to situations where there's significant media coverage of the celebrity committing or allegedly committing a crime "or [displaying] other distasteful conduct," and covers the costs of removing products and packaging from stores, and getting rid of marketing and advertising materials featuring the former endorser.
Other coverages provided by similar plans include reimbursement for what the celebrity was paid to secure the endorsement in the first place, and the cost of hiring a replacement celebrity and re-shooting ads. And it's sometimes packaged with insurance against the death of said celebrity during the ad campaign.
Tiger Woods' multiple affairs came to light (and kept coming to light) back in 2009, at a time when celebrity disgrace insurance was starting to see higher demand - remember the Michael Phelps bong rip photo that made his endorsement deals with AT&T, Rosetta Stone, and Kellogg's go up in smoke? Or when Chris Brown pled guilty to assaulting Rihanna, and the "Got Milk?" campaign decided his face was the wrong place for a wholesome milk mustache?
On the other hand, sometimes companies want celebrities with slightly naughtier personae to represent their brand. Seeing the relaxed view many Americans have toward marijuana, Paramount Farms pistachios launched an ad featuring Snoop Lion (né Dogg) tapping a nut out of a medicine bottle, with the voiceover "Snoop does it habitually." Censors limited the ad to cable and the internet, but that didn't stop it from getting more views than any other celebrity-featuring ad in the campaign - such 21st century juggernauts as Snooki, Khloe Kardashian, and, of course, the honey badger. Paramount Farms sold a lot of nuts with the help of some stoner charm - but as the ad shows, Snoop does have a prescription.
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For Spotting Fraud, Facebook is Your Friend
Since the 1899 founding of our nation's first Department of Insurance Investigations, insurers, along with big business, have sent out investigators when a workers' compensation claim seemed fishy. But in the last decade, social media has taken off, and we share our lives on the Internet. That means employers can easily catch fraud by going online.
A worker with a "sprained" ankle might post Facebook photos from a ski trip. Someone claiming a shoulder injury might tweet about bowling a perfect game, or upload a video to her band's YouTube channel, showing her whaling on the drums. A supposed whiplash sufferer might Instagram a selfie that plainly shows his neck bending painlessly. With a time stamp and location, the evidence couldn't be clearer - and even without that, anything posted outside of Throwback Thursday is probably from after the "injury."
Because social media activity is usually public (very few people bother or know how to manage their privacy settings ), this kind of sleuthing is perfectly legal. The only thing you can't do is pose as someone else to get the information.
Using social media to look into potential fraud is quick and easy - a helpful glimpse into what's really going on behind the neck brace. Here are some red flags common to work comp fraud: back and neck injuries are the most commonly faked, and injuries that happen on Monday mornings are also suspicious - they may have really happened over the weekend, away from work. Injuries without witnesses might be suspicious if your workers rarely work alone. Claims by new employees, or employees with poor attendance or disciplinary histories might also be off.
Social media is a valuable new tool, but old methods of catching fraud are also still useful. Businesses should have a specific, step-by-step method for filing claims - no matter how small your company - to discourage casual exaggeration. It's also important that employees have a good way to report potential fraud anonymously, and that the business supports a culture where workers are comfortable sharing information with management. Fraud is often discovered when a casual comment or some unfortunate bragging to a coworker finds its way back to management.
Workers' comp fraud is a serious problem that costs businesses, insurers, and taxpayers an estimated $5-7 billion annually, according to the National Insurance Crime Bureau (NICB). Precise statistics may vary somewhat, but there's no question that the cost of work comp fraud adds up to big money. Strenuous efforts from many fronts are made to mitigate that cost, and that Vine of an "injured" employee riding a mechanical bull is one more clue to turn the tables on perpetrators.
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Fixing the Age Gaps in the Rebounding Construction Industry
Construction was the single worst-hit sector in the Great Recession, accounting for about a third of all jobs lost in the US. Now the industry has made a full recovery, but there's just one problem: over two million workers left construction work for other industries back when demand was low, and, now that there's work to be done again, companies are facing a skilled labor shortage. That means more construction workers are either inexperienced or older - two groups that are at considerably higher risk for injuries and fatalities.
Fostering a culture of safety is important to one of the country's higher-risk industries: cautionary steps need to be taken at every level, channels of communication need to stay open, and safety needs to be brought up regularly. There are also plenty of resources available online: for example, with falls accounting for 80 percent of construction deaths, the National Association of Home Builders provides the Fall Protection Toolkit, which includes both OSHA regulations and clear teaching materials.
Older workers are also a concern. According to the U.S. Bureau of Labor Statistics, almost half of all construction workers were over forty-five years old in 2012. There's good news there: older workers bring decades of experience and caution. They're less likely to suffer injuries, according to research by Engineering News-Record. However, older workers may take longer to recover from injuries - and are more likely to die in an accident than younger workers.
Luckily, there are steps you can take to protect those experienced older workers.
- Make raising concerns okay: Any culture of safety needs open channels of communication, where workers can point out worrying or risky situations and practices, and suggest solutions. But older construction workers can be hesitant when it comes to raising concerns about their own safety, and often hide or ignore injuries for fear of being considered "too old" or "not tough enough" for the job. In construction, a culture of safety means everyone feels that acknowledging an issue is the right thing to do, and deserves more respect than trying to tough it out. A small injury caught in time is much better than one that stays hidden until it's too bad to hide - or causes a more serious injury.
-Understand issues that come with aging: Older workers start to lose some strength and endurance, making tasks involving grip force or repetitive motion harder. Their eyes have a tough time adjusting to dim light, and their hearing declines. Cognitive processes can also slow down, causing longer reaction times, a little less dexterity and coordination, and more difficulty learning a new task. And if managers and supervisors understand the challenges that come with aging, then they can...
-Accommodate: For every disadvantage an older worker has, there are simple solutions. To make up for reduced strength and endurance, let the tools do more of the work. Eliminate the difficulty and risk of bending and kneeling by having older workers do more in the "middle zone," either by focusing on tasks at the torso level or providing equipment (like long-handled trowels) that keep workers upright. For diminished vision, make sure the work site is well-lit, and keep workers with spottier hearing out of situations where they won't hear a shouted warning. You can also limit tasks that require quicker reaction times or more dexterity, and give older workers more time to practice a new skill.
As demand rebounds and the construction workforce continues to regrow, don't forget to take into account the risks of both new, inexperienced workers and older workers alike, and create an environment - from cultural attitudes about raising concerns, to equipment and strategies that accommodate the effects of aging - where workers' safety is the priority.
And of course, if you have concerns about work comp coverage or risk exposures, we're here to advise and help you take care of your employees - they're more valuable now than ever.
    
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All content © 2015 Professional Marketing Associates, Inc. This newsletter is not intended to provide specific legal or insurance advice. Please consult your individual agent for further information on the topics covered.
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