Every safety program, emergency response memorandum and risk management strategy begins or ends with discussions of cataclysm, emergency and catastrophe.
There is no question that planning and forethought can help businesses ensure insurance, risk shifting tools and training are in place before things go terribly wrong. There are also practical steps that can help preserve evidence and information necessary to defend claims arising out of such catastrophes.
Emergency Response Plan
OSHA requires emergency planning for exit routes (29 CFR 1910.38) and use of personal protective equipment (29 CFR 191 Subpart I App B). An emergency response plan should address emergencies the employer can reasonably expect in the workplace (29 CFR 1910 Subpart E App).
An insurance broker or agent can be a good resource for developing an emergency response plan. FEMA, OSHA and other state and federal agencies can provide guidance on the components of an effective emergency response plan.
OSHA suggests the following components for an emergency action plan.
- Develop procedures for escape route assignments, systems to account for all employees after evacuation, rescue and medical duties for employees who perform them and means for reporting fires and other emergencies.
- Chain of command to perform evaluation of potential emergencies, see that emergency procedures are developed, direct all emergency activities, including evacuation of personnel, ensure outside emergency services are notified when necessary, and direct the shutdown of worksite operations when necessary.
- Emergency response teams trained in fire extinguishers, first-aid, OSHA blood-borne pathogens standard, shutdown and chemical spill control procedures, and hazardous materials emergency response.
- Personal protective equipment for incidents involving, fire, toxic chemicals, areas with inadequate oxygen, live electrical wiring any other potential environment likely to be encountered at the worksite.
- Medical assistance available within three to four minutes, identifying employees with medical assistance responsibilities as noted in OSHA Fact Sheet: Planning and Responding to Workplace Emergencies.
Insurance and Risk Shifting
Understanding the nature and extent of insurance and risk shifting agreements among general contractors, owners and subcontractors is essential to controlling risk. Unfortunately, changes in insurance policies and changes in law can significantly affect the outcome of disputes regarding who pays for worksite injuries. Legislatures in a great majority of states have passed laws precluding the enforcement of most or all indemnity agreements in construction projects. A smaller number of states prohibit indemnity agreements that purport to provide indemnity for the sole negligence of the party seeking indemnity.
For example, the construction industry in Texas has undergone a major change in how risk shifting tools are used on the worksite. The Texas Construction Anti-Indemnity Act applies to all new contracts after Sept. 1, 2012, and voids any agreement that purports to provide indemnity or additional insurance for construction contracts, subject to limitations and exclusions in the act (TX. INS. CODE § 151.101 et seq.). The Texas legislature explained that the purpose of the act was to prevent subcontractors from becoming insurers for entire construction projects and to restore “the doctrine that an entity is responsible for that entity’s own actions (Bill Analysis, Tex. S.B. 361, 82nd Leg., R.S. (2011)).” The Act focuses on warranty, breach of contract and property damage claims related to the manner in which construction services were provided.
This does not mean indemnity and additional insurance provisions are not important. The anti-indemnity provisions of the act do not apply to a provision in a construction contract that requires a person to indemnify, hold harmless or defend another party to the construction contract or a third party against a claim for the bodily injury or death of an employee of the indemnitor, its agent or its subcontractor of any tier (TX. INS. CODE § 151.103). Accordingly, additional insurance and indemnity provisions may be enforceable when the injured person is an employee, agent or subcontractor of the entity seeking indemnity.
However, it is important to note the act does not extend this exclusion to personal injury claims made by third parties (i.e., individuals who are on the worksite but not an employee, agent or subcontractor of the party seeking indemnity). This means the act may preclude indemnity and additional insurance for an injury to a third party that would not be excluded if the third party had been an employee, agent or subcontractor of the company seeking indemnity.
For claims not precluded by an anti-indemnity act, ensure indemnity and additional insurance provisions are enforceable in the applicable jurisdiction. For example, Texas and many other states require indemnity agreements in which a party seeks indemnity from that party’s own negligence to expressly state that the party is seeking indemnity for its own negligence. If they do not meet the express negligence test, such agreements will be unenforceable.
Practical and Legal Considerations for Post-Accident Investigations
Information and data form the factual basis for any legal defense or position taken in response to an OSHA investigation. Relevant data, witness accounts and an informed understanding of the forensic evidence are the starting point for developing a position with respect to claims made arising out of a worksite accident. When relevant data is lost or destroyed, intentionally or unintentionally, the effect on subsequent litigation can be substantial.
The term “spoliation” refers to the negligent or intentional destruction of evidence. Different jurisdictions treat the destruction of evidence differently. In Texas, for example, a duty to preserve evidence arises only when a party knows or reasonably should know there is a substantial chance a claim will be filed and evidence in its possession or control will be material and relevant to that claim. Once that duty is triggered, failure to preserve evidence can significantly impact litigation.
In Texas, the trial court holds a hearing to determine if there was spoliation of evidence and if such destruction was intentional or negligent (Brookshire Bros., Ltd. v. Aldridge, 438 S.W.3d 9 (Tex. 2014)). The remedy for spoliation of evidence must have a direct relationship to the act of spoliation and may not be excessive. If evidence was intentionally destroyed or negligently destroyed and so prejudices the non-spoliating party that it is irreparably deprived of having any meaningful ability to present a claim or defense and there is no adequate lesser remedy, the trial court can instruct the jury that the missing evidence would have been bad for the destroying party and the jury should assume the evidence would hurt the destroying party’s case. Such a presumption is devastating to any case and substantially increases the likelihood a party will get an adverse finding.
The best tip to avoid spoliation is to send a litigation hold letter to all persons in an organization with control or access to important data, who identifies relevant data classes of data and evidence for preservation. When used with computer policies that preserve emails and image relevant hard drives, the litigation hold process creates a paper trail and evidence of the efforts made by the litigant to secure evidence, even if some of it is accidentally destroyed. The letter also should document the people to whom it was sent and evidence they reviewed and will comply with the requirements of the letter.