Gaining confidence in compliance

March 7, 2023

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In a world of constant change and evolving challenges, risks are more interconnected than ever.

Considering the speed at which news travels, the heavy focus on environmental, social and governance (ESG), and the daunting geopolitical environment, organizations must be acutely aware of the changes, as well as the expectations placed on them by governments, stakeholders and consumers. Throughout 2023 and beyond, compliance concerns will remain prevalent and organizations will need to navigate the complexities to meet their business goals.

Environmental, social and governance (ESG)

The factors that make up ESG are inarguably good for our planet, people, and business. However, when it comes to environmental (caring for the Earth), social (caring for colleagues, clients and communities) and governance (organizational conduct), the expectations placed on businesses aren’t always clear. At the same time, the presence of social inflation, an increasingly litigious environment around the globe, and the influence of social media make it even more critical that organizations get ESG right. Risk comes at companies from many angles: not doing enough, not doing what you say you’re going to do, not presenting your story well, and not responding to a potential crisis properly. Organizations are advised to be realistic in their ESG endeavors to not get out over your skis, but at the same time be fully aware of how ESG can bring your organization both risk and reward.

Recalls and product safety

Speaking of crisis, one surefire way to potentially damage your brand and expose your organization to heightened litigation risk is to fumble your response to a recall or product safety issue. After another significant year of recalls and increased regulatory efforts and enforcement across the globe, we expect another year of scrutiny in product safety and compliance. Businesses should constantly review and update their product recall, crisis and communication plans to ensure they can withstand the stress of a recall or other product safety issue.

Social inflation and the value of mitigation

Given the substantial impact and increased frequency and severity of litigation, organizations are well served to allocate more attention and resources toward avoidance and mitigation — whether it’s in the realm of facility safety, human resources, automobile safety or even facility design. As a former risk manager, I know all too well the internal discussions that take place around spend associated with mitigation or prevention not involving human life. When insurance protection was less expensive (or perhaps more readily available) and the litigation environment was more equitable, finding the ROI for a particular mitigation effort was more challenging. Today, the risk has significantly increased, and risk transfer is often not an option. Whether it’s a fire safety redundancy, a wind or snow load factor for a building, or cameras for your over-the-road tractors — diligent risk managers should dust off their calculators and review the risk/reward based on the tricky environment.

Global connectivity

If it was not already apparent before the pandemic, it certainly is now: the risks our organizations face — no matter the industry — are interconnected. Case in point: consider how the pandemic in China impacted – and continues to impact – the supply chain in the United States. Then factor in the influences of climate change and geopolitical instability. For risk managers today who are studying the actuarial frequency and severity of risks, you are well advised to detour from the traditional “rearview mirror” analysis approach of extrapolating forward and consider risks across coverage lines and with multiple touchpoints. For example, a supply chain disruption could impact coverage related to contingent business interruption (BI), directors and officers (D&O) liability, Employment Practices Liability Insurance (EPLI), and perhaps even liability coverage at the same time – not to mention brand and consumer loyalty.

U.S. political environment

Perhaps it’s always been this way and it’s a consequence of social media being so accessible, but for many organizations, the political environment is more volatile and risky. In addition to the heightened regulatory and enforcement efforts around product safety mentioned above, consider these:

  • Regulations in a number of sectors are being revised; there is an awareness of the need for legislation to keep up with rapidly developing technology, with big changes on the horizon around product liability, cybersecurity, artificial intelligence (AI) and the regulation of online platforms.
  • We watch for federal involvement in the U.S. workers’ compensation environment, particularly with an eye on the Medicare physician fee schedule rule, proposed pharmacy benefit manager pricing and reimbursement transparency initiatives and regulatory influence in telemedicine.
  • The U.S. mid-term election deployed a new crop of legislators to state capitals across the country. These newcomers could significantly affect the development and passage of future legislation on workers’ compensation and auto physical damage.

For organizations that successfully navigate risk, comes reward. None of us know what 2023 will bring, but in the unexpected, you can be sure that Sedgwick will be here for you, watching trends, sharing ideas, offering support, bringing the best of our global and local resources, and imagining what’s next.

Tagged or flagged: social media investigations

June 22, 2022

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By Mandy Yousif, director, investigation services

Social media platforms have emerged as a powerful tool for communication in recent decades. Considering the volume of data collected daily, it’s no surprise they have also become a useful source for researchers and investigators working on various insurance and non-insurance related matters.

As reliance on these platforms continues to grow, there will be greater opportunities to uncover new information and verify facts. However, properly accessing and gathering information on social media platforms is not a simple task that can be accomplished by everyone.

There is a commonly held belief that locating and documenting information from social media platforms is straightforward. While it is true that these platforms are, by and large, open to the public, effectively conducting research and analysis goes far beyond a simple search. There are various challenges and limitations that researchers face when undertaking a social media investigation. These challenges often emerge through the three common phases of a social media investigation.

Phase 1: Locating information

Knowing where to search and what to search for is the first step. Consider a scenario in which you are attempting to find information on an individual with a very common name and few identifiers, such as “John Smith,” or a scenario where the individual uses an online alias that is different from their legal name. Alternatively, a researcher may be tasked with uncovering the identity of an anonymous account. How would you confirm that the individual you are investigating is in fact the correct target? Where would you begin your search? How many search engines would you utilize? Are the sources equally trustworthy? In cases like these, specialized research skills are essential, as they reduce the chance for error. They can also prevent an investigation from dragging on longer than necessary, which can be costly.

Phase 2: Analysis

The analytical phase of a social media investigation poses another challenge. Effective information analysis depends mainly on the researcher’s expertise, as well as their analytical and comprehension skills. Researchers must be able to think critically and determine the relevancy of the information collected to the case at hand, all while remaining objective and maintaining an independent mental attitude. The key is to distinguish between relevancy and immateriality while remaining impartial. Critically analyzing the information to produce coherent findings that will be actionable is the basis of a proper investigation.

Phase 3: Preservation

Preservation while maintaining the authenticity of findings is perhaps the most critical phase of any investigation. A researcher may uncover significant information throughout the course of their investigation; however, failure to properly document and communicate those findings will invalidate their significance. In fact, it may discredit the entire investigation and damage the potential admissibility of findings. Preservation of findings is more than simply copying and pasting text or a photo into a document. The preservation process should incorporate appropriate methodologies to maintain the authenticity and integrity of those findings.

There are several questions to consider when conducting an investigation, including:

  • What are the search filters, and how can they assist?
  • Why might relying on one search engine be insufficient?
  • Why it is effective to exclude articles and pronouns?
  • When is it appropriate to request metadata?
  • What is the time limit for research?
  • What information can be recovered once it has been deleted?
  • When and how can internet archival tools be used?
  • Is it possible to achieve total anonymity on social media?
  • Can a researcher access social media profiles that are not open for the public?
  • Can the collected information be validated and verified for accuracy?
  • How can one ensure they have thoroughly completed an effective investigation?
  • If required, is the researcher qualified to testify on their findings?

While most platforms are open to the public and virtually anyone can search for a profile, it takes a certain amount of expertise to properly leverage the investigative power of social media. Having the right resources and expertise can make or break an investigation — whether it relates to an insurance claim, allegations of criminal conduct, a pre-trial litigation dispute, defamation matter, trademark matter, asset recovery or simply a background search.

Online and social media investigation is one of the specialized services that Sedgwick’s research and intelligence division offers. Our experts have completed social media investigations on various insurance and non-insurance related matters — circumventing the challenges noted above and delivering admissible facts and non-biased findings. Our experts’ findings have been admitted in discoveries and trials, and our experts have also been called to testify on their findings. Regardless of the nature of the cause, we provide a full range of investigation services to meet your needs. To learn more about our investigation services, visit our website or read our flyer.