Heat Waves and Worker Protection: The New Normal for Insurers

A worker in hard hat and safety vest pauses to drink from a bottle of water.

As record-setting heat waves stretch across the US and the globe, it is impossible to ignore the impact on millions of workers. Many at risk of heat injury work in professions that already present higher hazards—such as agribusiness and construction. Not only can high heat exposure be dangerous for those whose work feeds and houses their fellow Americans; it can also result in costly workers’ compensation claims and higher ex-mods for businesses. 

Now is the time to discuss how the insurance industry can play a proactive role in heat injury prevention. 

The complexities of higher hazard work in high heat 

Studies show that heat-related deaths are highest among agricultural workers, followed by construction workers. According to the NCCI, claims frequency for agricultural workers has increased in the last four years. Claims severity has increased in the construction industry in the last three years by as much as 30%. Higher claims frequency and severity can drive up a business’s ex-mod, increasing workers’ compensation cost. 

With the added complexity of undocumented workers across these industries, insurance companies need to communicate in Spanish. At Foresight, one of the most in-demand resources on our proprietary safety and risk management app is the Spanish-language version of our Heat Exhaustion guide

A single case of heat stroke or a burn from contact with a hot surface (reflective materials, steam, etc.) can result in an expensive claim. Medical costs, therapy, wage replacement, and backfilling the role add up. In the event of a fatality, the loss of a friend, family member, and colleague is beyond value. But the business will bear an enormous financial burden if liable, resulting in not only workers’ compensation costs, but also legal fees and reputational damage. 

Think back to the climbing frequency and severity rates shared earlier for construction and agribusiness. That data was calculated prior to this year’s heat waves, which we expect will contribute more illnesses and deaths. In 2022, there were more than 1,700 heat related fatalities in the US… a staggering comparison with only 297 deaths in 2004.

The new normal: it can happen anywhere, so prepare everywhere

Higher temperatures are a new normal and not confined to any specific state or country. No worker should be exposed to dangerous conditions because their employer “didn’t think it would happen here.” For instance, temperatures of 103 degrees in Geneva, Switzerland, seem unfathomable—until this week, when they hit a new record of 102.7. Air conditioning in Europe is not as common as it is in the United States. Thankfully, the city of Geneva initiated a heatwave plan that focused on prevention messaging, concentrating on the most vulnerable demographics. 

Time to act: approach underwriting and loss control with heat in mind

While standardized heat safety training materials via OSHA, NIOSH, and state resources are valuable, every business is different. Where possible, insurance companies should partner with the broker and business to identify bespoke risk management needs. For instance, if PPE is required on a construction job site, can cooling vests be used? If agribusiness work must be performed during a heat wave to prevent fruit from rotting in the fields, are workers rotating in shifts? Is there a break area with air conditioning and water? Underwriters can ask these questions to protect their book and bring items to the business’s attention—potentially saving lives. 

At Foresight, every account is safety-managed with personalized attention. We work with businesses to bring their workers home safely. 

The responsibility to prevent heat claims is one that regulators, insurance companies, and businesses share. President Biden asked OSHA to enact stricter regulations around heat illness, but as we know, the pace of federal change is not always swift. Let’s challenge ourselves from the underwriting desk and beyond to keep heat safety front of mind.

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