Pennsylvania agency takes creative approach
to risk management in the food industry
By Phil Zinkewicz
"...We began to analyze the food industry business itself, and we realized that slip and falls were an issue that needed to be addressed."
--Robert A. Gleason, III, The Gleason Group, Johnston, Pennsylvania
The GleasonESP‰ system includes a hand-held data retriever that is used by employees to identify potential hazards throughout the store. Shown is an employee using the GleasonESP system during a routine inspection.
On stage and on screen, when a character actor takes a pratfall, it's funny. But in real life, slip and fall accidents are not funny at all. They're not funny to the injured party who may suffer pain and incur serious medical expenses. They're not funny to the property owner who may face costly litigation. They're not funny to the insurance company, which might have to pay a costly claim. And, they're certainly not funny to the insurance agent or broker who depends upon favorable claims experience to retain the best insurance markets for his/her clients.
The Gleason Group, a Johnston, Pennsylvania-based insurance brokerage firm that specializes in the food industry as its niche market, realized that this situation needed to be addressed a long time ago. The agency itself was started in 1924 by an elder Gleason who passed on the business to his sons and grandsons. At that time it was a general agency. But in 1981, the agency took on a small grocery store as a client and that led the current agency principals into a niche, which now represents 37% of its revenues. The Gleason Group, which employs 60 people and has P-C revenues of
$6.5 million and another $1.5 million on the life and benefit sides, produces insurance programs and insurance coverages for public entities, municipalities, school districts, health care providers, hospitals and nursing homes. However, the food industry represents not only a significant portion of its premium dollars but also additional revenues apart from the insurance transaction. And the key to the Gleason Group's success in the food industry is in risk management.
"In the early 1980s, workers compensation was a big issue, especially in the food industry with slip and fall accidents being the primary driver of general liability claims," says Robert A. Gleason III (Rooney, to his friends).
"Our work with that first grocery store led to contacts and contracts with other grocery stores, until we were contacted by the Pennsylvania Food Merchants Association. They had a problem with their workers comp coverage and we were able to put together a program for the association. That got us into the food industry in a big way. As the insurance market began to harden in the workers compensation area, we began to analyze the food industry business itself, and we realized that slip and falls were an issue that needed to be addressed."
The Gleason Group decided that "store walks" in retail food establish-ments would be the best way to watch for spilled or poorly placed items that could cause a slip and fall, and to monitor accidents and deal with claims. They began with establishing store walks in their clients' establish-ments and maintaining hand logs, which were nothing more than clip boards with note paper. They soon realized that there were problems with this approach. It was a sloppy and inaccurate procedure. So a research and development team at Gleason went to work. That team included: William Rogers, vice president of risk management; Elaine Lewis, vice president of information technology; Alan Pepoy, assistant vice president of risk management; Tony Kamnikar, vice president of the food group; and Ellen Dividock, marketing manager.
Three years later, these executives, with combined experience in the insurance business and information systems, came up with a special program using state-of-the-art technology, which it employs today to keep its clients' workers compensation costs down and which it markets to the food industry overall. "We developed an electronic floor monitoring system," says Gleason, "which we call GleasonESP. It is one of four elements of a total loss prevention program, which also incorporates proper spill cleanup procedures, hourly store inspections and detailed accident investigation. GleasonESP is comprised of two hand-held data retrievers, which collect and store information; one exception card, which identifies hazards and documents a response; and one transmitter, which electronically relays information to Gleason's risk management department or, for larger chains, their own risk management department."
Here's how it works, according to Gleason. In the first stage, a tour of the store is conducted to determine the most efficient monitoring route for ID markers, with special consideration given to high-hazard areas. An associate ID marker station lists the names of those employees assigned to conduct hourly store walks. Employee training focuses on equipment capabilities, proper store inspection and cleanup procedures, weekly safety inspections, accident investigations and claims reporting.
"The employee simply picks up the data retriever and exception card, and then activates the data retriever by touching his or her name ID button in order to record all information with the particular employee's name," says Gleason. "The employee then starts the hourly walk by touching buttons in proper numerical sequence until the last button is touched. As the employee walks from location to location, the condition of the floors is observed and recorded. If a slip/fall condition is found, the employee records this by touching the data retriever to the proper exception card button. The walker calls for a cleanup and remains at the site until an associate arrives to clean the spill. The associate records that the spill has been cleaned up and continues the walk. Hazards found during the store walk are then included in the weekly management report, which summarizes the frequency of hazards found in each department," says Gleason.
GleasonESP tracks loss prevention performance data through five management reports which include: walks per weekday, walking tours by managers, walking tours by day and time, hazards per location and hazards by manager. All reports provide data on in-store safety behavior by associates. Quarterly, a comprehensive review of store activity is conducted, detailing verifiable, quality information and recommendations for improvement, says Gleason.
"The system is paperless," he says. "When a claim occurs, the sweep logs are generated and submitted to insurance carriers or claims adjusting operations. We can demonstrate to our insurance carriers, claims managers and attorneys that a particular supermarket owner is going above and beyond traditional industry practices by proactively seeking to prevent slip/fall accidents before they happen. That has a positive effect on the insured's premium levels. It also provides carriers with a sound defense when a claim does arise.
"And it works," continues Gleason. "One 60,000-square-foot supermarket has reduced its slip/fall general liability claims from an average of eight per year to one in the first 10 months. The store's commitment to this technology has reduced the frequency of claims by 8%, leading to a dramatic 77% drop in the average claim cost from $4,333 to $1,000."
Gleason has other success stories. In one, a 45-store supermarket chain in the southern United States installed GleasonESP in 16 of its stores. At the time the system was installed, all store managers received slip/fall training, not just GleasonESP stores. However, at the end of one year, although all the stores showed reduction in slip and fall accidents because of the new awareness on the part of employees of the problem, the GleasonESP stores did better than those stores where the system had not yet been employed. The cost of slip/fall claims inside the store was reduced 72% across the entire chain, with a 64% reduction in the non-ESP stores vs. a 78% reduction in the GleasonESP stores. The store also saw a reduction in its insurance costs--about 25%.
In another case, a 12-store supermarket chain in New England installed GleasonESP in all of its outlets. In the first nine months, the retailer achieved a 14% reduction in the number of claims and a 77% reduction in the cost of those claims.
"There are side benefits to our system," says Gleason. "In the first place, the walks give employees the opportunity to check and rotate inventory. In addition, a store that is well maintained and safe tends to attract customers."
Gleason has patented its system and intends to market it to other industries where they see applicability. Any industry that is subject to slip and fall claims would benefit, says Gleason. Currently, his research and development team is looking into the restaurant arena for future customers. *