OSHA proposed penalties totaling nearly $1.4 million against two Illinois companies for violations of safety standards that led to the deaths of three workers last summer in grain elevators. Haasbach LLC received 24 violations, including 12 classified as willful, for failing to take steps to workers from engulfed 30 feet deep in corn. Alex Pacas, 19, and Wyatt Whitebread, 14, died at Haasbach’s Mt. Carroll site on July 28. Two other young workers escaped, but one of them suffered serious injuries. In addition to the OSHA proposed penalty of $550,000, Haasbach was also fined $68,125 from the Labor Department for child labor violations; it was illegal for under-age Wyatt Whitebread to be working inside the grain silo.
The other Illinois firm, Hillsdale Elevator received 22 citations, including 17 classified as willful, for safety violations at its facilities in Geneseo and Annawan. Mr. Raymond Nowland, 49, was killed on August 27 at the Geneseo site when he was engulfed in corn. OSHA proposed a $345,000 penalty for violations related to Mr. Nowland’s death, and another $384,000 in fines for violations at the Annawan site.
The litany of deadly practices found at these grain storage sites is alarming:
- Failing to train the workers on the hazards of moving grain
- Failing to ensure that all mechanical equipment was shut down before the workers entered the bin
- Directing workers to walk on the grain to make it flow
- Failing to de-energize equipment
- Failing to provide personal protective equipment
- Failing to plan for emergencies and have rescue equipment
OSHA’s new release provides more details about the agency’s investigations. It also describes the agency’s efforts in the last year to crack down on grain industry employers who show such disregard for workers’ lives.
OSHA also took the unusual step of naming the insurance carriers who hold the workers’ compensation policies for these two employers. An OSHA fact sheet accompanying the agency’s news release notes:
“The workers’ compensation carrier insuring Haasbach is Grinnell Mutual Reinsurance Co.”
“The workers’ compensation carrier insuring Hillsdale Elevator. is Westfield Insurance Co.”
Both companies appear to have a broad range of insurance products and loss-prevention services for agricultural operations and small employers. The Grinnell Mutual Reinsurance Co. website offers a variety of safety manuals, posters and brochures, including a two-page tipsheet on grain storage bins. It says: “Safe work practices in grain handling facilities can save lives” with these stern instructions: “Where workers enter storage bins, employers must:
**De-energize (turn off) and disconnect, lockout and tag, or block off all mechanical, electrical, hydraulic and pneumatic equipment that presents a danger, particularly grain-moving equipment.
**Grain must not be emptied or moved into or out of the bin while workers are inside because it creates a suction that can pull the worker into the grain in seconds.
**Prohibit walking down grain and similar practices where a worker walks on grain to make it flow.
**Prohibit entry onto or below a bridging condition, or where grain is built up on the side of the bin.”
When I noticed OSHA’s mention of the workers’ compensation carriers for these two grain elevator firms, it made me wonder about the role of insurance companies in advancing worker safety and health. Grinnell obviously recognizes the key safety practices needed to avoid a disastrous suffocation in a grain silo.
Would an insurer void a work comp policies with an employer who shows blatant disregard for safety regulations? I presume the policy does not provide for paying the substantial OSHA penalty or legal fees to challenge it. So what is the actual cost of the claim for the insurer? In the Haabach incident, the 19- and 14-year old young victims didn’t have spouses or dependents who would be eligible for survivor benefits. Is the key payout for the work comp carrier the $8,000 maximum burial allowance under Illinois State Workers’ Comp law? Would other potential costs be incurred by the insurer under a separate liability policy, not workers’ comp?
I can’t recall the last time OSHA mentioned an employer’s workers comp carrier in a news release announcing citations and penalties. I’m curious to hear your thoughts on why OSHA did so and what it might accomplish.