Riding the railways of FMLA and ADA

March 18, 2024

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For anyone who has ever played the game ‘Monopoly’, collecting the four railroads is considered quite the achievement. But dealing with the tracks can be tricky — as noted by two cases that the U.S. Supreme Court declined to hear regarding railroads and both FMLA and ADA. 

Investigating an interference claim 

Our first case is in relation to an FMLA interference claim in Justin Adkins v. CSX Transportation, Inc. that was dismissed by the 4th circuit. In 2017, the employer began a series of furloughs to some of its employees. Over the next few weeks, 65 employees submitted claims for FMLA and medical leave for soft tissue injuries that were all approved by the same two chiropractors. The company suspected fraud because under the union agreement, employees who were furloughed with medical reasons were allowed to keep benefits for two years versus only four months for those who didn’t. Following an investigation, hearings were held per the union agreement and ultimately, the choice was to terminate these employees for violating workplace rules for dishonesty. 

When the plaintiff’s sued, they argued that the administrative process used under the collective bargaining agreement violated their rights under FMLA for multiple reasons. The courts disagreed because as they noted, in their opinion, the employer did not violate the employees’ rights because it had an honest belief that the employees were seeking leave for an improper purpose. The court also noted that while the plaintiff’s argued that the reason they were fired was based on CSX Transportation’s suspicion that there was foul play, the suspicion was enough to warrant the employers honest belief that the leave claims were not legitimate based on the volume of claims and the timing in which they were submitted. 

Reasonable accommodations in review 

Our second case also deals with the railroads and reasonable accommodations under ADA. The case, Hopman v. Union Pac. R.R. involves a conductor who sued over a denied accommodation request to have his service dog accompany him in the train cab to help with flashbacks, migraines and other PTSD symptoms related to his service in the military. Initially, the trial court found for the employee and awarded him $250,000. This award was vacated by the judge and validated by the Eight Circuit who noted that the accommodation request by Hopman wasn’t covered by ADA because he was seeking to manage the worst of his symptoms of his disabilities while at work. The trial judge noted that ADA doesn’t define reasonable accommodation and that accommodations are not required to provide freedom from psychological or mental pain as a job benefit.

The court noted that the employee could still perform the essential functions of his job without his service animal present. In addition, the court agreed with the company’s position that having a service dog aboard a train would be unsafe and inconsistent with federal safety regulations.

While neither plaintiff was successful, it does offer some insights into the courts thinking about how employers should approach concerns with leaves and or accommodation requests. If an employer has reason to doubt the validity of a claim, the best course of action is to investigate and document those suspicions. In the CSX case, the terminations were because of company policies surrounding dishonesty in applying for what the company felt was illegitimate leave. They based this on the fact that the same two doctors sent in virtually identical paperwork for the plaintiffs and then held hearings for each employee to document their concerns before a course of action was taken. 

Decision making 

The ADA case also affirmed the courts belief that just because an employee feels that a request is reasonable and can help them manage their job, its ultimately up to the employer to make that determination. Given that ADA doesn’t truly define reasonable accommodation but rather provides examples, employers should note that it is better to ensure that you have a process in place to validate where the employee can perform the functions of the job with or without an accommodation. 

The key in both cases was properly documenting and following a process before any employment decisions or actions are taken. Failure to do so could mean that you wind up in court defending your circumstance and find yourself on the losing end to an opponent who has successfully captured all four railroads. Just like in Monopoly, this situation could wind up costing you the game. 

Learn more > Explore our disability and absence management flyer.

David Setzkorn, MBA, CPCU, Senior Vice President Workforce Absence & Disability Practice Leader

Navigating marine cargo risks and liability implications

March 1, 2024

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In the marine claims industry, very little is perceived as straightforward. No matter where goods are produced around the world or the manner in which they’re shipped (by sea, land or air), challenges will inevitably surface.

Transferring cargo and liability implications

Let’s say you log into the Amazon app, search for a tablet and submit the order. There are quite a few individual factors that play a role in getting that device from your cart to your doorstep. The process might start in Kenya, where the copper is mined to construct the device. Then it might be transferred to China, where the assembly process takes place, before it’s transported to storage, with as many stops as necessary in between. The tablet must then be sent to an Amazon distribution or fulfillment centre, before finally making it onto a vehicle and arriving on your doorstep. 

But who’s considered liable for the goods during each step of that process? There’s a slew of complex factors to assess, and a range of parties involved, including the legitimate owner of the goods, the owner of the warehouse where the goods are stored mid-transit, and the carriers or others involved with physically transferring the cargo, among others. And each of these parties likely maintains their own nuanced policy coverage.

At some point in this tenuous process, ownership of that cargo — electronics, or whatever it may be — transfers. But where? At the warehouse, in the carrier’s possession, or your doorstep upon being delivered? It’s only through investigating the direct cause of the loss and circumstances surrounding the event that a determination can be made regarding which entity carries the risk of that cargo, and subsequently, who should receive payment in a cargo claim. 

Maritime and transport risks

A myriad of risks could inhibit the shipping and transit of commodities. Traffic accidents, such as collisions, can severely damage cargo, a common occurrence. Events can prevent cargo from being delivered, or unintentional damage can occur. Cargo thefts or hijackings can be carried out by criminal syndicates or other third-parties mid-transport. Anything that has the potential to damage a load of cargo is a viable risk.

Warehousing risks in particular are a significant — and growing — concern in the marine industry. The facilities where goods are stored could flood, for example, or theft could occur at the hands of an on-site subcontractor. One cargo theft analysis found that warehouses and distribution centres are the top targeted location type among the global supply chain, with car-parks coming in second. 

Whatever it may be that causes the loss, it will need to be established whether the warehouse keeper holds the liability for those goods, or not.

Many parking areas designated for lorry drivers exist in the UK, but few will advertise that their facilities are secure due to security risks. Drivers should be meticulous about choosing their parking location and ensure it’s as secure as possible to minimise risk of theft. Additionally, hauling organisations should conduct a comprehensive vetting process before hiring each driver. An employee who has nefarious ties would have first-line access to identifying high-value, attractive cargo and/or facilitating its theft. Cargo that’s particularly attractive should be transported same-day, if possible, rather than a higher-risk overnight journey.

Key factors of an investigation

In the event of a loss, a special investigation must occur to begin moving the claims process forward. An adjuster must be present on the ground to assess all aspects of the loss and collect all available information and evidence. Adjusters seek to establish liability at the time of the loss event, sift through the wide-ranging laws and compliance requirements of relevant locations, determine if negligence or nefarious activity took place at any point during the cargo-handling process, review documentation, assess the condition of the damaged goods or work to recover goods that were stolen, and deploy risk mitigation tools to minimise the possibility of future losses.

Learn more: Find out more about Sedgwick’s global network of marine specialists and marine claims operations solutions in the UK.

Parisa Kheradmand, Marine Surveyor and Major and Complex Loss Adjuster, Sedgwick

Bumps in the road: pain points and proven solutions for auto and motor claims

December 13, 2023

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The global automotive claims landscape is currently facing a range of significant challenges — the impact of electric vehicles (EVs), talent shortages among commercial drivers and repair technicians, product recalls and in-market remediations, and increased litigation and legal system abuse, to name a few. Here, we explore some of today’s critical pain points in the U.S. and Europe auto and motor claims markets and what can be done to alleviate them. 

The U.S. market

Despite a short-lived reprieve during the pandemic when the commercial auto combined loss ratio fell below 100%, the industry saw 10 straight years of underwriting losses prior to 2021. Claim incidence and costs are rising once again. Still, there’s a lot more the U.S. auto claims industry needs to tackle.

In what would’ve been exceptionally rare only a few years ago, we have entered the era of thermonuclear verdicts, where seemingly routine injury cases result in multimillion-dollar verdicts and settlements. Personal injury firms are using a variety of sophisticated tactics in their pursuit of the trucking industry, the long-favorite target of the plaintiffs’ bar. 

As a result, settlements and verdicts above $1 million have shot up drastically, and those of $10 million or more have become much more frequent. Reaching for higher settlement amounts can arguably be explained in part by social inflation, where some jurors are determined to take aim at what they see only as a faceless corporation with deep pockets. 

An experienced driver shortage is not helping. Despite efforts to improve recruitment, there is a tremendous need for qualified drivers — lagging far behind demand. The shortage, which can be attributed to the continued growth of online shopping and experienced drivers retiring, among other factors, has left motor carriers with little choice other than to place marginally acceptable drivers behind the wheel, adding fuel to the legal fire.

Additionally, the auto industry has been pushing for tort reform among multiple practices, including third party litigation funding (TPLF), a type of tort that encourages plaintiffs to file frivolous suits and leads to inflated medical costs, settlements and trial demands. One conservative estimate puts the price tag for TPLF at $5 billion. While it emboldens plaintiffs to seek medically unnecessary treatments and procedures, the price of these medical services in many auto-related claims is not reflective of reasonable and customary costs. 

The market in Europe

Much of the unprecedented pressure facing the European motor claims market is intrinsic to the rising popularity of electric vehicles (EVs). Although Europe has succeeded more than the U.S. in building the infrastructure needed to support EV usage and promote its environmentally-friendly benefits, there are drawbacks: EVs are estimated to increase accident risks by 25%.

Evolving vehicle technology, combined with supply chain issues and labor shortages, have driven up repair costs, too. “Figures from the Office for National Statistics show the cost of running and maintaining personal transport, including cars, has increased by 15% compared with a year ago, above the overall inflation rate of 10.1%,” The Guardian said in late 2022. Some UK customers report repair costs have jumped by as much as 90%. 

Europe has recorded an increase in traffic and accidents. The pandemic significantly curbed the use of public transportation as people grew accustomed to traveling via private automobile, and many opted to drive to travel destinations rather than fly this past summer, fueling the increase. 

Additionally, European countries are seeing an increase in other motorized vehicles, such as electric scooters, on roadways. Rising figures for accidents, as well as more frequent small motor claims — such as those related to parking incidents and other minor accidents — have followed suit. Some countries are adapting in kind. For example, in Norway, as of Jan. 1, 2023, drivers of all privately owned vehicles, including e-scooters that can be shared via an app, must have liability insurance.

Finally, as expected during periods of economic pressure, there has been a surge in global insurance fraud over the past few years, including many areas seeing more claims filed with reports of escalated and pre-existing damages. The “exploitation of actual loss” accounted for 27.2% of all motor vehicle fraud cases in Norway in 2020, with similar rates expected for 2023. Beyond individual claims, the BBC reported that, over a two-year period, up to 170,000 claims were linked to suspected “crash for cash” networks.

The value of specialization and experienced partners

Despite the complicated range of issues facing the industry, tackling global pain points is not only feasible — it’s happening. Many service providers (including Sedgwick) are turning to automated solutions to handle small claims, like parking accidents or damage to glass. Additionally, our motor team in Norway is finding that streamlined and highly tailored services are keeping claim costs down and minimizing opportunities for fraud. 

To meet the demands of today’s complex business challenges, the industry is moving away from a multi-line adjustment model and demanding greater specialization in high-frequency and costly, complex claims. This strategy — in addition to specialization between first- and third-party exposures (for example, liability, physical damage and cargo) — is vital to effective auto and motor claims handling.

Automotive manufacturers, transportation companies and insurance carriers should seek out partners with strong commercial auto and transportation practice groups, and a deep understanding of the essential challenges facing the industry today. Depending on their needs, specializations like major case units, brand protection, multinational expertise and mono-line focus areas may also be essential.

Learn more > Read more from industry-leading experts in issue 22 of edge, Sedgwick’s digital magazine.

Tackling transportation thefts in France

December 1, 2023

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After several difficult years, many of the logistical issues that have impacted global supply chains are starting to stabilize. However, cargo theft remains a concern. With persistent inflation and other economic pressures, the phenomenon requires a mobilization of all parties involved in the transportation of goods.

Even if the vast majority of shipments are without challenges, several links in the chain remain exposed to the risk of theft. In fact, a large number of reported crimes take place during pre- or post-carriage. Safety, malice and theft (including theft by deception) become top of mind. Sufficient deterrents are put in place, including stronger warehouse and storage site security through human and technical resources (video protection/remote monitoring), as well as site and warehouse safety certifications.

Transportation theft

Today, two types of theft with very distinct characteristics remain a challenge:

  • Theft by opportunity: Generally unsophisticated crimes and of lesser value, such as goods in vehicles with little or no means of security parking in unsecured parking lots. The increase in online shopping and the consequent transport of goods, as well as the accumulation of goods in rail yards and ports of embarkation as soon as an incident occurs, are two factors that have multiplied this type of theft in recent years.
  • Organised crime: Targeted goods, more sophisticated and planned crimes that often require the cooperation of a person with inside information on the transit route. Perpetrators go to great lengths to identify valuable cargoes, such as electronics and pharmaceuticals, forge licenses and shipping documents, create fake trucking lines and other deceptive schemes in order to steal the goods.

Reality on the ground

Despite the procedures put in place, land transport remains an area that is subject to hazards. For example, congestion at the port may occur in the event of a port strike, or a driver might reach the limit of their authorized driving time. The obligation to park the vehicle on the road is difficult to manage with very few secure car parks in France.

There is a map of which countries are more affected by crime than others, but no one is spared. When altered lead is found on a container transported from France to the United States, many people do not file a complaint because they do not know for certain where it happened. These offences are therefore not reported. To give you a recent example, let’s consider the 300 parcels that disappeared from a container coming from India via Antwerp. Who should file a complaint? The sender considers that it is not within their jurisdiction. Upon arrival in France, it is impossible to know where the flight took place, especially at the time of the stopover.

It is often noted that there is a lack of coordination between the various parties involved. However, only a concerted approach could make it possible to put in place preventive actions and limit the risks.

Cost of incidents 

Safety is always a priority, but it can come at a cost, and not all shippers are ready to accept it. However, the cost of theft is often more expensive than taking preventive action.

Whether the goods are stolen from a ship, train, truck or warehouse, losses of goods that occur in transit are generally covered by marine insurance policies. All of these situations come at a cost. For example, when a container has been opened, its delivery is delayed by several days. The deductibles may be in the range of 15,000 to 20,000 euros per claim, and this can add up to significant sums.

Carriers call on the experts to help them establish liability at the time of the theft (if the investigation determines that the negligence of one of the freight forwarders, carriers or logistics subcontractors led to the theft, then they must take responsibility for the loss), as well as to recover the stolen goods and reduce the risk of future losses.

Safeguarding interests

Among the actions to be considered to combat malicious acts, security professionals should be asked to carry out a risk analysis prior to the transportation of goods. The client can draw up a set of specifications, which is the subject of a study, and not just an offer of prices drawn from the lowest drawn. Establishing this recommendation is particularly relevant when the value of the goods, or the distance/destination, are sensitive. By starting a conversation about how transport can be organised, customer and carrier share a common vision of risks. Problematic issues need to be discussed and validated jointly. For the client, it then becomes more acceptable to pay for the service, which also corresponds to a consultancy service. 

As we have already seen, it is essential to report all facts/obervations, even if they are not reported to the insurers, as well as to transmit those findings to the authorities (relationships between certain facts) to give them more means to act.

With insurers, thinking about the level of deductibles that do not currently encourage people to file a complaint would be a first point of reflection, as would collectively act on prevention. Securing goods can generate costs that the client is not always willing to accept. The carrier can’t take care of everything. An incentive in the form of a bonus could encourage the necessary investment in vehicles, for example. Safety is everyone’s business and awareness is essential. It starts with developing simple best practices and a culture of safety. 

The industry must deal with new risks, such as cyber, that can have a real impact on the transportation business, but we can’t dismiss the fundamental risks. In the event of an incident, everyone’s reputation can be at stake, and in the event of a court case, the judge can be less lenient with a company that has all the capacity to act. We need to put in place joint initiatives to reduce these risks and limit the cost to business.

Sedgwick purchases French marine and transport adjusting business of Commissariat d’Avaries de Paris

June 12, 2023

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PARIS, 12 June 2023 — Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has purchased the business and assets of Commissariat d’Avaries de Paris (CAP), a leading marine and transport adjusting company in France. The transaction represents an important step for Sedgwick as a market leader in France and is in line with the company’s international business growth strategy to develop its marine and transport loss adjusting practice.

Founded in 2000, Commissariat d’Avaries de Paris specializes in providing loss adjusting and claims management services that support the machinery and cargo aspects of marine and transport claims. The company serves leading national and international corporations and insurance carriers. With the acquisition, Sedgwick gains the expertise of highly qualified and renowned marine and transport adjusters who will provide a scalable platform for continued growth in France and other international markets.

“Joining forces with Commissariat d’Avaries de Paris allows us to strengthen our marine and transport practice,” said Xavier Gazay, Sedgwick CEO for France and Europe. “We have developed a strategic vision for the marine business in France, which will continue to grow and to support our clients. We are excited for the team from Commissariat d’Avaries de Paris to join Sedgwick’s 930 colleagues and 35 offices across France and to bolster all aspects of our claims management offerings.”

Commenting on the acquisition, Michel Boudrey, founder of Commissariat d’Avaries de Paris, said, “Sedgwick offers global resources and leading claims management expertise to support and enhance the marine and transport sector across France and internationally. My colleagues and I are pleased to be a part of the team that will grow this business.”

About Sedgwick 

Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

Getting ahead of marine liability risks

March 29, 2023

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When goods and machinery are produced on one side of the world and shipped to another, challenges arise.

After a loss, there are documents to review, shipping regulations to navigate and liability issues to uncover. Whether a company is shipping perishable goods from Peru to the Netherlands or steel throughout Europe, there are laws and compliance requirements to consider. The supply chain has not fully recovered from years of factory closures, border restrictions and overcrowded ports — making it even more challenging to conduct business as usual post-loss and determine liability.

Valuable and vulnerable loads

Imagine a company is dealing with particularly valuable and/or vulnerable loads. During transportation of these goods, there are several touchpoints that often require a second set of eyes before determining possible liability. On behalf of customers, we frequently review the handling process of these goods to inspect their condition and verify lashing/securing measures, as well as subsequent loading/unloading methods. By playing a role in the supply chain, the state of the goods is clear before any potential risk or transfer of responsibility takes place.

After all, at various touchpoints, different handlers with different agreements are in progress. Confirming that all goods are in proper order before they are transferred to the next party in the chain can make a significant difference during a potential claim in the future — saving time and money. Assessing the condition at various ports before, during and after shipping is key to identifying any losses or damages that may have occurred.

Bulk goods

The role we have in this point of the supply chain is unique, as usually only loading or unloading surveys tend to be carried out. Consider the example of common practices with bulk goods. At Sedgwick, we have expertise to carry out surveys at various stages of the supply chain, as well as for very different loads such as breakbulk goods, containers and air cargo. Our vast network is ready at a moment’s notice to arrive at terminals and take part in each requested transfer stage. If goods are damaged when they arrive, our experienced colleagues quickly assess the damages on site and assist with mitigation. To calculate the exact loss, it is crucial for our team to understand how the goods are processed, the state of the goods after production, the intended end product and where it is marketed.

Documentation and awareness

In addition to being present on the ground to assess the condition of goods, our team can investigate the stream of information and documentation that is involved. This way, we can detect possible hick-ups in the supply chain before they get the chance to develop into full blown delays or other inconveniences that might lead to monetary losses. Moreover, we intend to generate awareness for all parties involved about the consequences that might result from the manner in which documentation is being drawn up. In the unfortunate event of damage to goods, there’s potential to complicate or hinder effective resolutions if documentation is not completed properly. Maximizing the chances to successfully recover from a financial loss is a key area of focus when investigating the stream of information and documentation.

Carrying out surveys

No matter the type of cargo or complexity of a marine liability claim, a comprehensive survey should be completed. Many shipping agreements are made via email or telephone and there is a chance that contract details are missed. Reviewing all documents, agreements and regulations, and generating a thorough report helps support the claims resolution process. Beyond the loading survey of goods, having a partner to assist with the investigation ensures smooth supply chain operations that can just as easily be carried out at other stages of transport, storage or handling.

In an unpredictable environment, companies must anticipate future challenges and be prepared to take early action. Before supply chain disruptions occur, make sure your organization has a clear plan in place and a partner they can trust. Whether you need support with determining liability during shipment, tracking the production process, assisting with forwarding issues, reviewing packaging requirements, investigating thefts or identifying issues involving perishables — Sedgwick’s global team can support. For more information, please contact us at [email protected] or [email protected].

Building loyalty through customer care

February 22, 2023

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By Diane Charvat – managing director, consumer claims; and Anne Little – AVP, operations

U.S. air travelers were recently subjected to two large-scale service interruptions that temporarily grounded, cancelled or postponed many takeoffs and left thousands of vacationers and business travelers delayed and displaced. With their itineraries disrupted, ticket holders scrambled to adapt their plans and update their reservations.

During these crisis situations, those who booked travel using credit cards with affinity program benefits found themselves at an advantage. While fellow passengers waited for customer service in long lines or on hold, many turned to their credit cards’ consumer support resources for immediate assistance.

This is just one example of customer care programs providing the highest level of service when it matters most. By creating positive experiences founded on empathy, efficiency and strong technical knowledge — and often “saving the day” amid challenging circumstances — they serve not only to take care of people but also to build customer loyalty.

Considering outsourced solutions

Companies today are looking to forge relationships with customers in order to generate revenue, stay connected to their target market, and foster brand loyalty. However, customer care initiatives are often hindered by operational hurdles, competitive pressures, budget constraints, inadequate training resources and other organizational factors. In particular, the current labor shortage and tumultuous state of the workforce are making it difficult for companies to hire, retain, and develop people for customer service roles. Staffing challenges are compounded during “surges” —such as product recalls, data breaches, inclement weather events and major travel disruptions — when customer needs are at their peak and the stakes often at their highest.

Many leading organizations are turning to external partners to help them overcome these challenges, control loss costs, and deliver high-level care to their customers. Well established providers leverage broad talent networks and relationships with placement agencies to ensure clients’ customer care teams are appropriately staffed — not only in terms of headcount, but also industry experience and multilingual capabilities. They have the expertise needed to ensure accurate application of policy language, compliance with licensure requirements and other regulations governing insured programs and adherence to the financial services industry’s rigorous data security protocols.

An important factor in considering an outsourced approach is whether an external customer care vendor can operate as a genuine extension of the client organization. A partner that takes the time to get to know their client’s organizational culture, mission and core values will more seamlessly integrate with their operations and better connect with their customers.

Leveraging modern technology

Technology is another area where organizations struggle in providing an ideal customer experience. Consumers have grown tired of the mazes of automated phone prompts and elongated hold times now associated with customer service — systems that often serve to promote organizational efficiency and savings, rather than a better end-user experience. Customers today want self-service websites and apps where they can quickly and easily complete simple transactions, as well as direct connection to live agents via phone or messaging for resolving more complex issues.

When implemented properly, modern technologies offer opportunities to boost efficiency while also improving customer satisfaction. For instance, application programming interfaces (APIs) enable systems to securely exchange information in real time. When a customer calls, system integration can allow for the caller to be automatically identified by their phone number. With a few short questions to validate identity for security purposes, a representative can immediately see the caller’s relevant account information: credit card number, applicable coverages and timeframes, travel dates and so on. Effective use of APIs can lead to reduced call times, fewer redundant questions, and more personalized and faster resolutions.

Intelligent intake and rules engines are additional tools that can drive high-level customer service. As an example, our consumer care team worked closely with a hospitality client to develop a tech-driven solution for promptly processing refunds for resort season passes. Members upload their refund documentation and respond to a few simple questions in our smart.ly platform via a computer or mobile device. Artificial intelligence (AI) tools scan the submissions and use automated decisioning to determine if refund requests are valid; those that meet the defined criteria are immediately processed for payment. With this solution in place, cycle times are lower than ever and customers are pleased to receive their refunds quickly and with so little hassle.

When it comes to loyalty, caring counts

Technology can be a tremendous asset in the resolution of some issues, but it’s not meant to take the place of human involvement in customer care. The personal touch will always be important in forging connections between people and brands.

When a prospect or customer reaches out for help, the company must bring its A-game to have any chance of securing or retaining their trust and loyalty. It must have trained professionals who are well-versed in customers’ wide-ranging needs, as well as technology that aligns with customers’ varied preferences and meets them where they are. In order to build long-lasting connections, companies must successfully balance innovative tools focused on the user experience and a consumer care team — whether in-house or outsourced — that delivers both expertise and empathy.

Maya Angelou famously said, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” When customer care programs are designed properly and operating at their best, every interaction can and should feel like a concierge experience.

Learn more — read about Sedgwick’s consumer care solutions for transportation and travel, accident and health, retail and other specialties

The rise of e-scooters and electric vehicles: What does it mean for the claims industry?

August 30, 2022

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By Laura Horrocks, ‪head of fraud data and insight and Chris Frechette, vice president, liability practice

As transportation technology progresses, issues of safety, fraud and liability will need continuous monitoring to match the changing landscape.

Electric scooters (or e-scooters) are now a familiar sight on UK streets but are new enough that safety and legal issues haven’t yet been fleshed out. Similarly, electric vehicles (EVs) use new parts and technology that present unique risks for mechanics, the supply chain, and the claims industry alike. While both e-scooters and EVs are largely embraced as environmentally friendly travel solutions, they’ll create new and urgent challenges in the claims’ realm. For both kinds of vehicles, it’s critical our industry is aware of all the ways in which handling claims could be impacted or changed.

E-scooter popularity

First, we look at e-scooters, a mode of transportation that’s only recently become commonplace and was perpetuated by the COVID-19 pandemic lockdown. As e-scooters become more popular, there are a range of safety issues relevant to liability to consider. Most obvious are the lack of required training to ride one and the physical risks involved. Though most scooters are capped at a maximum speed of 20mph, this isn’t a universal standard, and private models can go significantly faster. Given the lack of engine sound, pedestrians are potentially at risk from being hit if the rider can’t slowdown in time (and conversely, are at a higher risk from being hit themselves). To stop an e-scooter effectively, the rider’s body weight would need to be distributed low and far enough to avoid being thrown forward – something the average person wouldn’t necessarily be aware of. And because e-scooters are two-wheeled and narrow – they allow riders to enter traffic from unexpected places and they can often be obscured by vehicles or objects of greater size.

Additionally, there is currently no legal requirement for the use of a helmet (as casualties resulting in head injury are relatively low), but the risk is nevertheless present. Data tells us these safety concerns aren’t hypothetical – according to the UK Department of Transport, the number of casualties relating to e-scooter use has increased three-fold over the past two years, and fatalities increased from one death in 2020 to nine deaths the following year.

What it means for the claims industry

There are currently UK trials taking place across 31 regions with a variety of private e-scooter companies participating, each adequately insured and approved for public road use. However, there is easy and widespread access to similar vehicles on the private market, none of which have been approved. Consequently, there are unregulated and uninsured vehicles being used in public, further complicating the claims process. Insurers could find themselves handling significant injury claims in addition to the high costs associated with the repair or replacement of a scooter – regardless of whether its use was legitimate.

Lastly, because of the significant risk of injury to the rider and high cost of replacement from lack of availability, fraudulent activity is an increasing concern. And e-scooter theft is sure to rise with demand, so validation of ownership will be key. With UK trials expected to conclude in November 2022 and legislation relating to general use expected in 2023, the groundwork is being laid for a significant increase in e-scooter ownership.

In the U.S., many of the same trends exist in addition to others. Because relatively untraceable single purchase cash cards can be used to rent e-scooters, the renter becomes virtually anonymous, contributing to an alarming rate of vandalism and driving-related offenses that can’t be tracked to the vehicle operator. Additionally, because each state has its own set of laws governing e-scooter use on public roads, there is no uniform set of rules. A minority of states deem them illegal for street use; a handful allow riding on sidewalks while most others don’t; age requirements vary from state to state, and nine states even require a driver’s license to operate an e-scooter. It’s important citizens are educated on which laws apply for safe public use.

The shift from diesel to electric-powered vehicles

In a similar trend, due to increasing fuel costs and environmental concerns, there’s a notable shift in consumers choosing to purchase hybrid or fully electric vehicles rather than diesel-powered ones. Hybrid vehicles were introduced as early as 2010, and electric vehicles have been present in the UK for several years. However, the sale of new EVs outweighed the sale of new diesel vehicles for the first time ever in 2022. This represents a seismic change in the automobile industry that will likely continue to rise as technology progresses.

EV claims will need to be handled differently

Just as it will take time for proper legislation to be structured around e-scooter travel, legal issues will enter unfamiliar territory with new EV technology. Electric vehicle companies’ technological ambitions are like those of diesel-fueled car firms – the eventuality of driverless vehicles. Reports have recently been released suggesting plans to allow self-drive vehicles on UK roads as early as next year.

Improvements in EV technology involve the use of new, expensive, and complex car parts – some of which will come at a premium due to many standard component parts having built-in technology that will need to be reinstated if damaged. This could mean hefty costs for insurers where electric vehicle collisions are concerned.

The obstacle of repair complexity

Logically, repair complexity will increase in line with evolving technology. Repairing EVs presents new safety risks, such as chemical exposure (from leaking electrolytes), electric shock, or fire, as well as unique challenges in the repair process. For example, the battery that powers an electric vehicle is typically embedded in the vehicle’s structure, making it difficult to remove, and when done incorrectly the battery can twist the chassis, incurring additional repair costs. Car mechanics will need to build new skillsets to learn how to fix problems with these parts, and any kink in the repair networks will inevitably worsen the UK’s current vehicle car part shortage and increase supply chain costs. That shortage is expected to contribute to an acute increase in the risk of theft – not for the vehicles themselves but for their parts. Complex components in electric vehicles are valuable, and owners will have to take precautions to prevent theft (particularly since many anti-theft devices can be overridden).

The cost of hiring a replacement vehicle is also likely to increase due to there not yet being general term agreements in place to cover costs. If companies choose to take advantage of this, a drop in EV hire vehicle stock could lead to a much higher-grade vehicle being supplied to the customer, as they’d be entitled to decline a non-electric one.

New solutions, new challenges

In our rapidly evolving world, new and improved technology is integral to solving problems and streamlining processes. The rise of e-scooters and electric vehicles do both and are inarguably beneficial to the planet. It will also lead to unchartered territory in the claims industry – questions, obstacles, complexities – and it’s our job to be prepared to meet the moment and adapt. We’ll continue to monitor emerging trends regarding e-scooters and EVs and keep a close eye on how they impact insurers.

Vehicle dents, dings and damage: The role of PDR

August 3, 2021

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Written by Douglas Dell, vice president and director, Vale Training, a Sedgwick company

Your first encounter with paintless dent repair (PDR) may be after a trip to the supermarket or a night of bad weather.

Whether your vehicle has a small dent from a shopping cart or severe damage from a hail storm, the results present as one or multiple impacts not showing signs of paint damage. That’s where PDR comes in. Most damage is measured on a coin system: dime, nickel, quarter and larger. And for years, success was measured by visual inspection and whether the dent had been flattened out. But advanced technology is changing the game.

More than a decade ago, Vale developed a new process to measure the accuracy of the repair using technology that was previously limited to the manufacturing and aeronautics industries. The testing protocol introduced 3D scanning — measuring dent depth and removal in terms of microns (1/1000th of a millimeter). The level of accuracy this provided was unlike anything seen in the industry. The ability to accurately measure a repair provides statistical evidence that the vehicle has been returned to close to original condition — retaining pre-loss value at typically lower costs than a traditional auto body repair. So what makes Vale certified PDR protocols so important?

Sensors, calibration and safety

Sensors are critical components to the modern vehicle. As the eyes of the car, they enable everything from existing advanced driver-assistance systems (ADAS) features, such as automated braking and anti-lane departure to parking assist. The consequences of these “eyes” not pointing in the right direction or not seeing clearly could result in needlessly braking in the middle of the highway or suddenly swerving into another lane.

Calibration is one of the main factors that ensures a vehicle’s sensors are operating per OEM standards. During the repair process, PDR technicians take tools that enter the back side of vehicle panels. If not done correctly, there is a risk that the operation of these critical safety sensors, including air bag deployment will be damaged, altered or canceled. Before any work is done, a vehicle’s pre-repair scan will ensure all damage caused by an event is identified and that your insurance claim properly accounts for any damage to these critical systems. After repairs are completed, a post-repair scan is recommended to verify that the vehicle and all its safety features are working correctly. It’s no longer acceptable to say “it looks like new”. Without pre and post scanning you could be accepting your vehicle with thousands of dollars in compromised technology.

Devaluing a vehicle

A common, yet improper PDR procedure is the practice of drilling holes to access panels. When technicians drill holes through panels to gain quick access, they permanently damage the vehicle’s crashworthiness — weakening the safe structure of the vehicle and lessening its value. Instead, Vale-certified technicians carefully push or tap panels to return the vehicle to pre-damage condition.

To avoid the devaluation of vehicles and promote safety, we’re educating technicians in the PDR process and the importance of pre and post scanning. We hope you’ll take advantage of the opportunity at the upcoming Mobile Tech Expo in Las Vegas where our U.S. partner, PDR Testing and Certification will be conducting technician assessments during the event August 26-28. In addition, Vale will conduct training sessions on estimating and electric vehicles (EV) and announce a scholarship in honor of Bobby Walker, a Vale trainer and PDR certifier who passed away in 2020. The scholarship will offer access to one of Vale’s automotive, tractor trailer or heavy equipment programs to further skills and career opportunities. Stay tuned for more details on PDR certification opportunities and updates from the show.