Watch out, Wal-Mart!

With the elections behind us, what can business owners facing a new President and a new majority of Democratic legislators expect when managing their future cost of risk?

Here are some predictions from some of the nation’s top risk manager gurus.

1. Expect a resurging trial bar, according to Kevin Quinley, a claims consultant and author of Time Management for Claims Professionals. Any meaningful tort reform, he predicts, is a “dead issue.” According to the National Taxpayers’ Union, tort costs represented 2.2 percent of America’s gross domestic product in 2003. Expect those costs to rise.
2. Sectors like pharmaceuticals and medical device manufacturers that rely on Federal preemption as a defense to some tort claims, especially products liability, can expect action that may roll back the use of these defenses.
3. In Associated Press exit polls, ninety percent of those responding cited health care as a major election concern. Expect a significant push to expand health care coverage and new health-care mandates. Although successful health care reform failed in the Clinton administration, the growing national consensus portends significant change.
4. Expect increased OSHA inspections and fines. Under the Bush administration, the Occupational Health and Safety Administration favored a “voluntary compliance strategy,” according to a 2007 article in The New York Times. Obama, not so much. According to a 2008 Obama press release, “As I have said before, the Bush Administration's Department of Labor has used its regulatory authority to side with corporations over the public interest—even when its decisions undermine the spirit of the law and puts workers' lives at risk.” The release continues, “Fines and penalties must be applied systemically when violations occur to encourage compliance by other employers."
5. The Obama administration will reshape the Federal Courts and the Supreme Court, but these appointments may not impact businesses too greatly, some pundits believe. Conservative judges Clarence Thomas and Antonin Scalia have issued scathing decisions that hurt businesses, for example quashing attempts to limit punitive damages.
6. According to an Obama/Biden position paper, the team would “fully fund and increase staffing the EEOC” (Equal Employment Opportunity Commission). Employment practices liability insurance, now more than ever critical to a solid risk management strategy, will become a necessity.
7. Thinking of outsourcing jobs? How Obama intends to tackle job losses to overseas operations remains fluid. The finance minister of India was quoted in the Financial Express, "A comment here and a comment there (on outsourcing of services) should not bother us. Once Obama is in office, he will realise that it is an inter-connected world and countries have to work together." However, increased union involvement is a foregone conclusion. It  may not happen immediately with pressing economic issues at the fore, but watch out, Wal-Mart!
8. If your organization has environmental exposures, prepare for tougher regulations. New regulations may require insurance market innovations and increase your need for a more sophisticated insurance agent or broker. Ethanol production incentives may erode under the Obama administration, so carefully consider any alternative-vehicle purchases before buying.
9. Cultural diversity and inclusion will increase, especially for those engaged in public contract work. Evaluate your organization. Do you like the racial composition, the gender balance that you see? Alternatively, could you improve? As a senior manager or business owner, you may believe you are implementing diversity successfully. Roger Crowder, a senior recruiter for Aetna Insurance quoted recently in Risk Management Magazine said, “I’ve learned that what other people say about a company’s commitment to diversity is more important than what a company says about its own commitment to diversity.” Survey your employees and vendors to see where you can improve.
10. With the current economic downturn, highly qualified candidates will bang on your door. Kick talent management initiatives into high gear, because the economic downturn will not last forever. Target your competitors’ high-performing layoff “survivors.” They may be discouraged and demoralized. Those disgruntled survivors can be a talent bonanza if you land them.

An Obama sign I saw at an election night rally summed up the election results better than I ever could. The sign was sponsored by the SEUI, a 1.9 million-member union, which stumped hard for Obama. The sign read “Health Care…A Voice at Work…It’s On!” For risk managers, the next four or eight years will be challenging and, in my opinion, exciting. It will definitely be “on.” Is your organization ready for the challenges?