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With each new season arrives new workers’ comp risks and summer is no exception.

Though employees and employers alike may be excited for the warmer weather, it’s imperative that everyone is prepared to work safely as thermometers perk up.

Increased heat risks, summer storms and acquainting seasonal workers with the risks of the job are just some of the many safety risks employers need to be prepared for as the weather heats up.  

“The combination of summer worker safety concerns and the relative inexperience of temporary workers makes for situations that companies and risk managers need to be aware of and plan for ahead of time,” said Kapil Mohan, senior vice president, risk management client services, Gallagher Bassett  

“Ahead of the season change, companies should ensure that they have a plan to mitigate the risks that arise in the summer.”

As you dust off those short sleeve shirts, it might be a good idea to brush up on summer safety tips. Here are five summer safety risks to watch out for this summer and what you can do to address them.  

One of the biggest summer safety concerns is heat exhaustion stemming from higher temperatures. 

“Heat exhaustion is a top concern for employers operating primarily outdoors during the summer,” Mohan said.   

“As we transition into the summer, we start to see an increase in some common worker health and safety concerns that accompany warmer weather, including dehydration, heat exhaustion and cramps, sunburn, heat rash, and heatstroke as well as insect stings and bites.”

It’s not just workers who are outside that are affected by the heat. Researchers from UCLA and Stanford found that when temperatures in California were around 90-degrees Fahrenheit, workplace injuries and accidents increased 9% across the board. That study looked at 18 years worth of workers’ comp claims data.

To help prevent heat exhaustion and heat stroke, it’s important to make sure your employees are educated on the possible signs and symptoms so they hydrate and take care of themselves immediately. Signs of heat-related illnesses include headaches, nausea, dizziness, slurred speech and physical weakness, among other symptoms, the CDC says.      

“Workers have to be able to recognize the signs and symptoms of heat exhaustion,” said Alanna Klein, product director, construction and energy at Liberty Mutual Insurance.

Additionally, employers should have plenty of safety interventions that address heat on the job site, especially for outdoor workers. Shaded areas, hydration stations and air conditioned indoor spaces where workers can flee the heat can go a long way toward reducing the risk of workers overheating.  

“The worker would benefit most if they were working under a shaded structure with a hydration station nearby,” Klein said. 

One side effect of increased heat can be exhaustion and fatigue. Tiredness, confusion and weakness are all symptoms of heat-related illnesses.  

“If you have a forklift operator who’s suffering from fatigue due to the temperatures or conditions of heat illness, they will have mental fatigue and that could increase your likelihood of equipment accidents,” Klein said.  

But heat isn’t the only cause of exhaustion in workplaces during the summer. Longer daylight hours may encourage workers to stay up later or they might spend more time exercising outdoors, leading to tiredness.  

“Extended daylight hours can lead to overexertion, tiredness, sleep deprivation,” David Lawhorn, MS, director of loss control for AmTrust Financial Services, said in an email. 

Workers who are tired on the job may be more likely to make mistakes or cause accidents. One 2021 study from the University of Missouri found that sleep-deprived truck drivers are three times more likely to crash .  

Fast-changing summer weather can also bring about increased safety risks. Thunderstorms, flash floods and wildfires are all risks employers need to be aware of, especially if they have outdoor workers.  

“We see some weather concerns, summer storms, lightning, flash flooding, and wildfires,” Klein said. 

With global climate change, some of these weather-related dangers are becoming more common in areas that may not be experienced in dealing with severe storms. Wildfires in particular are becoming more common across the American west. Washington state had previously experienced only two and seven wildfires per year between 1986 to 1990. Within the five years, between 2015 and 2020 the state has seen between 19 and 77 wildfires per year .

“Areas that traditionally didn’t have any type of wildfire exposure are now experiencing drought and there’s wildfire exposure,” Klein said. 

“If you have somebody working outdoors and they’re welding, and all of a sudden a spark flies onto a piece of dry grass and then it starts a wildfire. It becomes a public concern.”

One way employers can address weather-related safety concerns is by watching the forecasts. If it seems like it might be unsafe to work, it might be best to call it a day and send workers home so they can stay safe. 

“Be looking at the weather forecast day in and day out,” Klein said. “Weather changes, obviously, very quickly in certain parts of the country and with lightning strikes, that’s a huge concern.”

From lifeguards and camp counselors to temporary harvesting staff, summertime comes with a lot of seasonal workers. 

These workers could increase a company’s workers’ comp exposures as they may be less familiar with safety policies or newer to the workforce. A recent report from Travelers found that 35% of workplace injuries occur during a worker’s first year on the job, likely due to the fact that they are experienced and less familiar with their employer’s safety policies — two factors that also apply to seasonal workers. 

“Every summer also sees an influx of seasonal workers who may have no previous work experience or familiarity with workplace hazards,” Lawhorn said. 

Seasonal workers can be from any industry, but in the summer they’re most commonly seen in the retail and hospitality sectors, per Mohan. These industries may be hiring temporary workers to support increased demand from tourists or they may be hired to run summer entertainment events like camps or swimming pools.  

“The hospitality, restaurant, retail, and to some extent, construction industries typically hire temporary labor—in many cases, students from high school and college—during the summer months to accommodate higher demand,” he said. 

“The combination of higher demand, a less experienced workforce, and additional summer risks creates an environment poised for a spike in workplace injuries.” 

When people think of increased driving risks, they tend to imagine winter months, when snow and ice can make it difficult to keep a car on the road.

But summer has its own roadway risks: “The driving conditions in the summer are typically a little bit more hazardous,” Klein said. 

“Roadwork pops up more frequently, particularly in the northern states. And then you have more drivers on the roadways. So you have an increase in potential injuries associated with motor vehicle accidents.”

In addition to construction risks, summers tend to bring more distracted or inexperienced drivers to the roadways. High schoolers who are out of school may be driving more frequently and vacationers who are unfamiliar with the area could both bring more risks to the roads.   

“Distracted driving increases as vacationers/tourists drive in unfamiliar locations and teen drivers [are] on the roads during business hours [when they’re] not in school,” Lawhorn said.

And don’t forget about heat risks. Delivery vehicles are rarely air conditioned, leaving drivers vulnerable to heat stroke and exhaustion . Cars and trucks can also overheat more easily during the summer, which may cause drivers to pull off to the side of the road.   

“When it comes to trucking and transportation, heat exposure and the potential for more vehicle accidents due to increased traffic congestion are specific risks businesses should take steps to address ahead of summer,”  Mohan said. &   

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When an employee steals from their company, what should the employer do?

What even the most proficient risk professionals might not know is that employee theft can affect businesses of any type and size. The U.S. Department of Commerce reports companies lose $50 billion each year to employee theft, and such activity causes one in three bankruptcies. And that’s not to mention the new ways employees are accessing funds and other items.

“Traditionally, the biggest Crime & Fidelity exposure has been embezzlement by employees. This has been employee dishonesty. For example, employees setting up fraudulent accounts and having the company pay them to accounts that were not valid, or overpay,” said James Kardaras, Senior Director of Crime & Fidelity at Nationwide. “But now, electronic crime [criminal activity involving the use of computers or electronic means, to illegally transfer funds or steal, change or erase electronically stored data] is sharply on the rise.”

Given these expanding criminal trends, risk professionals should be securing the protection of a comprehensive Crime &Fidelity policy. But what exactly should they be looking for in their coverage and in their underwriter? Before investing in a Crime & Fidelity policy, it is essential that insureds consider the following.

James Kardaras, Senior Director of Crime & Fidelity, Nationwide

Current advances in technology allow bad actors to exploit a very dangerous tool: the Internet. Enabled on virtually every computer and smart phone, the Internet provides criminals with round-the-clock access to electronic data, resulting in rapidly increasing losses to insureds.

“When you have people outside the institution able to remotely access computers at a bank, for example, and divert funds, little by little, from the employee to other accounts outside the institution, you have this very real, very new risk that no one even thought about years ago,” said Kardaras.

Social engineering is a noteworthy growing trend, as more bad actors are succeeding in their criminal enterprises using this approach. “Social engineering fraud, otherwise known as fraudulently induced funds transfers, occurs when a criminal assumes someone else’s identity induces an individual within the institution to transfer or wire funds to an unauthorized account controlled by the embezzler,” Kardaras explained.

“Criminals can assume your identity using information readily available on social media, whether on LinkedIn, Twitter, Facebook or Instagram, because the more public information about you that’s out there, the more easily your identity can be stolen,” he said. “People purport to be an employee and they’re not. People purport to be a vendor and they’re not. People purport to be a customer or a client and they’re not.”

Sophisticated criminals continue to up the ante even further. Using “deepfake” technology, criminals have the technology to send a fake but flawless video messages from a company’s president or CFO giving authorization to transfer funds.

Up-to-date forms are a must. “Some computer crime policies date back to the ’90s as a base form. But a lot has changed since then, both with the technology and the tools criminals use to defraud insureds,” Kardaras explained. A comprehensive Crime & Fidelity policy should include modernized language that provides the insured protection for emergent risks.

Risk managers and their brokers should seek to procure a policy that provides coverage for the different types of employee theft – from electronic crimes to social engineering fraud.

In addition, because such criminal activities often extend into ransomware and demands for cryptocurrency payment, risk managers and brokers should seek a Crime & Fidelity policy that addresses those threats in coordination with coverage that may be provided for same under the insured’s cyber policy.

Additionally, criminal hackers commonly try to extort their victim when demanding ransom. “Insureds should therefore be cognizant of whether the Crime & Fidelity policy they are seeking to purchase provides coverage for extortion or alternatively contains an exclusion that would expressly preclude it.”

Risk professionals, when going to market for a Crime & Fidelity partner, should be proactive and already have certain controls in place to demonstrate they are a favorable risk to underwrite. Kardaras advised that when an insured knows their own exposures and can relay that to the carrier, the application and underwriting processes become that much smoother.

“The carrier needs to evaluate a full application, because they are covering internal exposures,” Kardaras explained. “Insurers can’t simply amass information about the company from public information; rather the company must set out the scope of the risk via the carrier’s full application.”

A full application likely poses the following types of critical questions: What internal risk controls are currently in place with regard to money, securities and other property? What authority do employees have to handle funds and up to what threshold? At what level is dual authorization required to release payment of funds?

With regard to larger firms, maintaining an internal audit department is key to being viewed as a favorable risk.

“If a large, sophisticated insured doesn’t have an internal audit department, to me, that would be a non-starter for providing coverage,” Kardaras said. On the other hand, “smaller firms that may not have the staff for an internal audit team,” he added, “should be able to provide the carrier with a complete picture of how, and to what extent, fund requests from employees, vendors and customers are authenticated by the insured.”

A final piece of the risk-ready puzzle can come down to how a potential insured trains its employees. Much like in the cybersecurity space, companies can train their employees to spot potential or attempted electronic crimes.

“Nationwide employs a questionnaire as a tool to help businesses become more aware of how well-trained their employees are,” said Kardaras. “Phishing education and testing employees once a year on cyber readiness is an important element of mitigating their exposure. Our questionnaire asks about that training and evaluates the staff’s preparedness for potential cyber crimes and attacks.”

Once risk professionals become familiar with the Crime & Fidelity landscape, it’s time to find the right coverage partner. That partner should be well-versed in the space, while also constantly and consistently evaluating the emerging trends to bring the best solutions to clients each day.

The Crime and Fidelity team at Nationwide prides itself on those very things.

The Crime & Fidelity business at Nationwide was developed to complement its established D&O liability, professional liability and cyber liability policies. Nationwide brought in Kardaras seeking to capitalize on his extensive and varied Crime & Fidelity background on both the brokering and underwriting sides. Kardaras has successfully employed this vast knowledge and experience, providing Nationwide clients with the Crime & Fidelity protection essential as criminal activity continues to rapidly grow and evolve.

“Nationwide’s Crime & Fidelity team works closely with brokers and risk managers to provide real time information and terminology,” Kardaras explains. “Our Crime & Fidelity team works in tandem with our cyber, D&O and Financial Institutions colleagues and we are well-versed on the potential overlapping risks and coverage solutions. We endeavor to be flexible and solution-oriented in our coverage. For example, if we straddle the border between cyber liability and computer crime, Nationwide will find a solution that provides our insureds with protection tailored to their needs.”

To learn more, visit: https://www.nationwide.com/business/insurance/commercial-crime/.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Nationwide. The editorial staff of Risk & Insurance had no role in its preparation.

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