The News You Need for April 28
We get heat safety news, subrogation analysis, and CEU opportunity
Climate & Comp: Calif. Moves to Protect Workers from Indoor Heat
Sacramento, CA (WorkersCompensation.com ) – For five years, workers have been waiting for California officials to address heat protection for indoor workers during extreme heat, and now officials seem poised to act.
The California Division of Occupational Safety and Health, or Cal/OSHA, announced on April 18 that it plans to revise proposed indoor heat rules for all workers statewide, except in correctional facilities. The proposed rule will require that employers either try to cool workplaces that get hotter than 87 degrees inside, or take action to reduce the risk of heat illness for workers. Those action can include slowing down production, shifting schedules or mandating more breaks, officials said.
Cal/OSHA had previously been scheduled to approve the new rule in March. However, the rule was pulled from the Occupational Safety and Health Standards Boards’ agenda by state officials in March when Gov. Gavin Newsom’s administration withdrew its approval of the rule. Officials said the rule would cost the state’s prisons more than expected.
Approved regulations cannot become law in California without getting approval from the Department of Finance, officials said. On the Wednesday night before the board meeting, the department withdrew its approval of the proposed rule, saying that in a late estimate, the California Department of Corrections and Rehabilitation estimated that the cost was billions more than workplace safety agencies had predicted.
The new proposed rule would resolve those cost concerns and allow the rule to be formally approved this summer. The rule will most likely affect workers inside businesses without air conditioning like warehouses, restaurants and manufacturing facilities.
California is one of five states with heat illness prevention rules for outdoor workers, and once the proposed rule is finalized, one of only three states that has indoor heat standards.
In 2021, the RAND Corp did an economic impact report found that the indoor heat rule would have an estimated $215 million impact on employers across the state for the first year, and about $88 million every year after that. Those costs would be mostly for employers to install air conditioning or fans, or to provide cool-down areas, the report said. However, the report said the rule would save money because it would cut workplace heat injuries by 40 percent by 2030.
The standards board estimated in 2021 that the California Department of Corrections would need to pay less than $1 million in the first year after the rule’s finalization, and less than $500,000 each year thereafter. Officials with the Department of Industrial Relations said at the time that about half of the state’s 1,500 correctional facilities are either already climate controlled or in cooler areas of the state that would not get hot enough to trigger the heat rule. When finance officials told corrections officials they had underestimated prison costs, the corrections department said its updated analysis determined there were more costs the state would incur.
Corrections spokesperson Albert Lundeen told CalMatters that the rule would require “immediate infrastructure investments in CDCR facilities across the state and would require the department to immediately request the Legislature to appropriate billions of dollars for extensive capital improvements.”
Lundeen said workplace injuries from extreme heat have been growing for years, and that the Corrections department is addressing them. Several of the department’s prisons are in desert towns, and many state prisons are mostly cooled using evaporative coolers or fans, he said.
A recent project that would install evaporative cooling units to cool the California Institution for Men in Chino, Cal., is estimated to cost the state $18 million for planning and construction. Another project to replace an old cooling system with HVAC at the Ironwood State Prison in Blythe, Cal. has been under construction since 2018 and is projected to cost $187 million.
Eric Berg, a Cal/OSHA deputy chief, said the agency will work to propose a separate rule to address heat for jail and prison workers. That process, he said, will likely require additional cost analyses and public hearings and could take anywhere from a few months to a few years.
According to the U.S. Occupational Safety and Health Administration, only two other states, Minnesota and Oregon, have rules for indoor workers. Nationally, legislation has stalled in Congress. President Joe Biden has directed OSHA to establish national heat standards for outdoor and indoor work, but the rules can take up to 10 years to finalize, officials said.
Subrogation Savoir-Faire: What You Don’t Know Can Hurt You
Oh, that it wasn’t so, but today’s world of insurance claims adjusting, subrogation, and civil litigation rewards the ability of one party to take advantage of what the other party doesn’t know. A civil trial is known as an “adversary proceeding” because it pits two or more opponents against one another with regard to a legal conflict, contest, or dispute. The American system of civil justice becomes a factual search for the truth and the application of law to that truth. If one party is unaware of the law, including each and every legal claim, defense, exception, argument, loophole, and opportunity available, they are at a distinct disadvantage. The real tragedy is that the loser in this battle of knowledge often remains ignorantly unaware why they lost.
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In the world of claims handling and insurance subrogation, knowledge is power. We often see the aftermath of clients waiving significant subrogation interests or paying on claims that, had the law or issues been fully recognized and understood, would have turned out much differently. Failing to recognize that the subrogation law of a state other than the one in which a matter is being litigated might apply is a very expensive and oft-repeated phenomenon. Taking at face value a third-party liability carrier’s erroneous assertion that you cannot recover PIP benefits in a particular state until a threshold is reached is an expensive way of placing your trust in the opinions of an adversary. Not realizing that a waiver of subrogation endorsement is not applicable to a large workers’ compensation lien is an expensive reoccurrence that happens with alarming frequency. Failing to understand when a subrogated carrier can initiate a third-party action on its own; missing notice deadlines involving responsible municipalities and government entities; accepting claims that an insured is not “made whole” and waiving subrogation without challenge; not understanding the interplay between workers’ compensation and automobile no-fault laws. Combined, these and many other similarly-repeated mistakes cost the insurance industry staggering amounts of subrogation dollars. What you don’t know can hurt you.
Information is the most valuable commodity our industry possesses, and it is free for the taking. All that is required is a minor investment of time and a willingness to learn.
Training and education have other unspoken benefits. They are not just the filling of a pail; but the lighting of a fire. They engender passion and a love for what one does for a living. They instill pride and satisfaction that comes with developing a distinguishing expertise within an industry or profession. The well-trained employee becomes more valuable, more efficient, and more profitable. The claims professional experiences an exponential growth in professional and personal dignity, which leads to longer employment tenure and higher job satisfaction. Low employee turnover means a growth in experience, which compliments training and often magnifies its benefits. Just as important as understanding the legal nuances of a claim or defense is the ability to determine if your adversary knows what they are talking about.
In addition to being the name of a food-stealing mouse character in the 1960’s cartoon, “Klondike Kat”, savoir-faire is a French noun that literally means “the knowledge to do” or “the know-how to be able.” It connotes a sophisticated level of understanding in a nuanced and little-understood area. It is the ability to be adaptable, adroit, and able to know what to do in areas that are not well-understood. Subrogation is such an area, and subrogation savoir-faire can translate into millions of subrogation dollars that would remain unrealized without it. The only ways to acquire it are training and experience; but even the latter often involves learning things wrong and repeating expensive mistakes.
In the world of claims, I would submit—at the risk of ruffling the feathers of many experienced claims and subrogation professionals—that education and training are far more important than experience. Having “knowledge” of something is not the same thing as being “correct.” Even the most experienced of claims professionals sometimes “know” things that simply aren’t so. For example, the vast majority of the insurance industry uses the term “claimant ” to describe a culpable third-party tortfeasor responsible for causing a loss, while the term literally refers to “a person who makes a claim.” The mistake is repeated so often that even printed forms within the industry perpetuate the misnomer. Even the experienced will repeat a mistake until they analyze their patterns, recognize the mistake, and break free from it. That can only come from education. As Oscar Wilde famously said, “Experience is simply the name we give our mistakes.”
Insurance claims and subrogation training is ubiquitous and free for the taking. You can’t go on the internet without coming across a webinar, YouTube training session, or online PowerPoint discussing both subrogation basics and minutia fundamental to a fully-functional claims or subrogation program. Hundreds of claims and/or subrogation trade associations have sprung up, featuring inexpensive memberships and free insurance/subrogation training. Several associations feature quality subrogation training, including Claims and Litigation Management (CLM), Property Loss Research Bureau (PLRB), Property Casualty Insurers Association of America (PCI), Association of Claims Professionals (ACP), National Association of Independent Insurance Adjusters (NAIIA), American Insurance Association (AIA), American Educational Institute (AEI), International Association of Claims Professionals (IACP), Society of Claim Law Associates (SCLA), and many others. Law firms also offer training to clients and potential clients alike. Matthiesen, Wickert & Lehrer, S.C. features dozens of online webinars on every insurance subrogation subject imaginable—free to the public. Interactive legal/subrogation maps detailing the laws of all 50 states and 50-state subrogation reference charts right at our fingertips. YouTube seminars are only a mouse click away. The lack of available training sources is no longer the excuse it once was.
The repeating of mistakes in the world of insurance claims and subrogation is echoed in a Claims Journal article entitled “Ten Subrogation Mistakes Insurance Companies Keep Making.” Of the ten mistakes discussed in the article, several of them are repeated despite - and in some cases directly as a result of - a wealth of experience. They are repeated as a result of a chronic lack of knowledge on a set of particular esoteric legal issues, nuances, or beliefs.
To err is human, to be sure. Yet many people continue to make the same mistakes over and over. A series of experiments published in 2016 in the Journal of Consumer Psychology reveal how our brains often fail to learn from our past mistakes to the extent we might think they do. In fact, the studies reveal that thinking about past mistakes often causes us to repeat them. When we make a mistake, our brains typically slow down the decision-making process the next time the same situation arises, through a phenomenon known as “post-error slowing.” With each decision, studies show that test subjects consistently used weaker and weaker information to make their decisions. The explanation for this bizarre result is that “the brain gets involved in a quest to understand why the error took place.” It tries to determine why a mistake was made whether there is something wrong with the individual. This negative feedback triggers a cascade of computations which distract from the decision at hand. It is simultaneously a testament to the infinite complexity of the human mind and its frailty. An example is the “tip of the tongue” phenomenon in which a name or word is on the tip of your tongue, but you just can’t quite remember it. Once you recall it, it is such a relief that you can’t imagine ever forgetting it again. But you do.
A lack of subrogation and claims education is a mistake that flows from the top down. Many decision-makers within our industry have never been responsible for recognizing and taking prompt action on subrogation potential. As a result, they have very little empathy or appreciation for what is needed to improve the only area of the industry other than the receipt of insurance premiums where money flows in not out. Being good at the former seems every bit as important as the latter. Good judgment comes from experience, and experience comes from bad judgment. Effective subrogation requires an investment of time and resources and it all starts with education. Anything less and we are deluding ourselves about how well we are performing as an industry.
If you should have any questions regarding this article, subrogation training, or subrogation in general, please contact Gary Wickert at [email protected] .
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