"Your utility should not be focused on doing anything just to provide a defense for claims or lawsuits or to satisfy the insurance companies."

By Dean B. Wisecarver

I would like to clear up some apparent misunderstanding about a variety of activities or actions by co-ops we frequently discuss or recommend during our loss control consultations. Let me start by stating that your utility should not be focused on doing anything just to provide a defense for claims or lawsuits or to satisfy the insurance companies. That's a bold and, most likely, provocative statement, but I believe it is absolutely true. Your objective in all areas of what we traditionally call "safety," whether it be public safety or employee safety, should be to sustain quality electric power delivery to your member-consumers and to do so as efficiently and reliably as possible. In fact, that last sentence may well reflect your operating mission statement.

Let me use some common examples to make this point clear.

Case management, the term we use to describe how an employer deals with employees who are injured on the job and are unable to return to their normal duties immediately, involves things like regular follow-up by management on medical treatment, regular contact with the injured employee, and light or restricted duty intended to get injured employees back to productive activity as soon as possible. Many REC managers believe these activities are aimed at reducing the impact such injuries have on the cost of workers' compensation claims and, thus, on the co-op's insurance premiums. Not true! There may be spin-off benefits that hold loss costs and premiums down, but the primary aim of case management activities is to preserve your valued employees and help them heal quickly and come back to full work activity as fast as possible. That's just good operational management! For example, why should someone from management frequently call an injured or ill employee regularly? It is because employees who feel valued by the employer are much more motivated to do a good job at work and, if off work for illness or injury, to return as soon as they are able. Employees who feel they are not missed at work are far less motivated to return to fully productive work. Why should a co-op have light or restricted duty opportunities for still-recovering injured employees? It is because we have known through research for some 40 years that people who get back to a productive routine heal twice as fast, on average, as those who stay home and sit around waiting to heal. Your goal is to get your productive employees back to the very duties they were hired to do in the first place. That's what case management is all about. Reducing insurance costs is purely secondary, just a spin-off benefit of doing the right things for the right reason.

Another example is documenting line patrol activities, pole inspections, and sub-station inspections. Presumably, your co-op does these inspections because they help you find and fix things that need attention, or at least allow you to schedule fixes at times that are more efficient and productive than letting a problem go until it rears its ugly head at a very inopportune time - like in the midst of a storm-related outage! And let's face it, if the problem may cause injury or damage to one of your member-consumers, the time spent dealing with the damaged party and the unexpected devotion of resources needed to make immediate fixes almost always results in greater expenditures of time and resources than if you had found and fixed the problem before it caused damages. Thus, carefully designed self-inspection activities are simply good operating practices and documenting things helps your management team effectively administer these activities. The documentation is primarily an administrative issue, not a legal or defense issue. Good, simple documentation helps you make sure things are identified and repaired/resolved as efficiently and cost effectively as possible. The fact that some documentation may prove beneficial in defending a claim or lawsuit is just a spin-off benefit, not the primary reason you do it.

I could go on with many other examples, but suffice it to say that everything you do should be focused on managing your core business very, very well. If you decide to do something just to enable a defense of claims or lawsuits, or to satisfy an insurance company, you should stop and look closely at your decision. I honestly can not think of anything more likely to help you attain the benefits of good defenses, good safety records, and even lower insurance costs than being exceptionally good at managing all aspects of the very business you are in!

I hope you will keep the above points in mind as you read the other two article is this issue of RE-marks. If you have questions or views you would like to express on this issue, please feel free to contact me via e-mail at dean@synebar.com. I welcome your response.