When OSHA proposed penalties in January 2011 totaling nearly $1.4 million against two Illinois grain handling companies, I noticed the agency’s news release mentioned the employers’ workers compensation insurance carrier. It was the first time that I’d see this in an OSHA news release, and I wondered if it was the start of something new. Apparently, not.
I reviewed the 280+ news releases on enforcement cases issued by OSHA between February 2011 and August 24, and only identified two in which the agency mentioned the employers’ work comp insurance carrier.
One appeared in an April 2011 release about another grain handling facility: North Central Farmers Elevator in Ipswich, South Dakota. The employer received six willful violations for hazards that could cause workers to being engulfed by grain, and proposed a penalty of $378,000. The news release says:
“At the time of the investigation, the workers’ compensation carrier insuring North Central Farmers Elevator was Wausau Underwriters Insurance Co., headquartered in Boston.”
The other case involved Lessard Brothers Construction of Lewistone, Maine. OSHA June 10 news release described the company as having
“a long history of violating workplace safety standards,”
and the agency proposed $243,360 in fines for alleged egregious willful, serious and repeat violations, including failing to provide workers requried fall-from-heights protection. OSHA’s news release reported that this firm had been without State-required workers’ compensation insurance since October 2010.
Back in January when I asked OSHA about their decision to include: “The workers’ compensation carrier insuring Haasbach is Grinnell Mutual Reinsurance Co.” and “The workers’ compensation carrier insuring Hillsdale Elevator is Westfield Insurance Co.” in their January 24, 2011 news release, a Labor Department public affairs officer said:
“Workers’ compensation has many roles including providing benefits and medical care for those injured on the job, but the system is also intended to provide incentives to employers to reduce hazards and injuries through attention to the risks of work. Most insurers include loss control or loss prevention services to assist employers in making workplaces safe. In our efforts to promote transparency and disclosure, OSHA lists the carrier. Our objective is to encourage workers compensation carriers to work closely with employers to protect worker safety and health.” [emphasis added]
I didn’t really buy the “transparency and disclosure” assertion, but it did lead me to believe that we’d be seeing many more insurance carriers mentioned in OSHA news releases. It hasn’t turned out that way. I wonder why not?
An interesting saga did transpire after OSHA mentioned the two workers’ compensation insurers in that original January 2011 news release. The two firms reacted quite differently to the OSHA attention. Mr. Gary Christy of Westfield Insurance commented on my blog post:
“We applaud OSHA for encouraging cooperation between workers’ compensation carriers and the businesses they insure to protect worker health and safety. …Westfield offers our customers access to a wide array of professional risk control services. … Businesses have a financial interest in making workplaces safe, including the affordability of their workers’ compensation insurance. Premiums charged reflect the loss experience of the business.”
The other one, Grinnell Mutual Reinsurance Co., wasn’t so pleased with OSHA’s attention. The insurance company declined the agency’s request to provide documents related to business dealings with the employer, Haasbach LLC, and the grain elevator site where Alex Pacas, 19, and Wyatt Whitebread, 14 were killed in July 2010. In January 2011, OSHA sued in federal court to obtain such records from Grinnell Mutual Reinsurance Co. The insurance company objected, arguing that the Haasbach worksite is not covered by OSHA because it was a farm with fewer than 10 employees, and that self-evaluations records are protected from disclosure.
In May 2011, the judge ruled in favor of OSHA. The judge didn’t seem to buy the insurance company’s claim that disclosure would have a “chilling effect” on businesses because they’d fear that information in self-audit reports could be used against them in subsequent OSHA investigations or civil litigation.
I don’t know about the “chililng effect” but I’d certainly hope that an employer would get chills up his spine knowing that his insurer’s loss-prevention expert recommended some worker safety improvements and he didn’t make a good faith effort to implement them.