How Dry I Am
Sep 2, 2021

When Irving Berlin wrote "How dry I am" in 1919,* he was "celebrating" Prohibition, not flood control. Nowadays sea levels are rising, and staying dry takes on a whole new meaning. US News & World Report published an article a little over a week ago (New Jersey Eyes $16B Plan for Gates, Elevations for Flooding) outlining the US Army Corps of Engineers' new plan for flood gates to guard the New Jersey coast.

The essence of the plan is simple:


Huge gates that could be slammed shut when major storms approach would be built across the mouths of three inlets in New Jersey, closable barriers would cut parts of two bays in half, and 19,000 homes would be raised as part of a $16 billion plan to address back bay flooding, one of the major sources of storm damage at the Jersey Shore.

If this idea reminds you of the new flood gates being installed in Venice or the gates on the mouth of the River Thames or the gates protecting harbors of the Netherlands, you get the idea. This initial project was aimed at protecting residential areas in the Garden State, but hundreds, if not thousands, of commercial and industrial sites open to the sea in New Jersey, New York, Connecticut, and other states on the Atlantic Coast are also watching the spring/ fall king tides and hurricane storm surges inch ever closer every year.

Boston recently considered a similar plan but decided, for the moment, that the costs were simply too high. The article correctly describes the costs as "eye-popping," but doing nothing will definitely carry steep and ongoing costs as well. As we note in the following piece, Superstorm Sandy wiped out entire beach communities in New Jersey in 2012.**

What this suggests to us is that storm surge/ocean flooding potential is becoming an ever larger part of making risk decisions concerning the acquisition, retention, or expansion of any facilities near any arm of any ocean. The time frames are uncertain, the techniques for climate change projections are evolving, even knowing what questions to ask is open to discussion, but the "New Jersey Plan", as we'll call it, makes it clear that the questions have to be asked going forward. Little by little, coastlines will be fenced in with flood barriers,*** and billions of dollars are at stake. What does this mean for your operations and your supply chains?

*For a quick listen, try one of the renditions on YouTube.

**Total costs for Sandy are estimated at $29.5B in New Jersey plus another $32.8B in New York, not including future remediations.

***Nothing new, really. The Dutch began wresting land from the North Sea in the 14th century. Today, roughly 50% of the Netherlands is reclaimed land, thanks to dikes and flood gates. We are not proposing the use of windmills, but the New Jersey Plan, as proposed, looks very familiar if you know Holland.

Not New Jersey - yet.


Feel the Power?

Remember Superstorm Sandy? On October 29, 2012, Sandy executed its infamous left hook, plowed into, and almost obliterated Brigantine, New Jersey, as noted above. Two hours later, Sandy slammed into the rolling hills of Bucks County, Pennsylvania and began our personal education on how to live in the 19th century. The power was out for many days - far beyond the merely inconvenient. A recent article in the Wall Street Journal (Hacks Rank Among Top Power Grid Risks, Watchdog Says) brought back our memories of cooking on the camp stove, scrounging for bags of ice, and bathing in the swimming pool. From the WSJ: "Cybersecurity has become a core issue for the U.S. power system, as important as the supply of raw materials used to generate electricity, a senior official at the grid's watchdog said..."

Our point here is not about cyber risks, however. Our concern is whether you have all the power backups and interruption covers you may need if hackers (or any catastrophes, natural or otherwise) strike your friendly, neighborhood utility and tie them in cyber knots for days, even weeks. When your power is down, it doesn't really matter why. Hackers and hurricanes are much the same when the lights go out.

Consider this statement from John Moura, director of reliability assessment and performance analysis at the North American Electric Reliability Corp.: "Unlike weather or some of our other risks, this [hacking risk] is much more difficult to manage. The persistence that we've seen and the level of sophistication more recently, especially with SolarWinds at the end of the last year, really highlighted the capability of the threat actors." If that doesn't make you think of trying to do business with quill pens by candlelight, perhaps you should read it again.

One way or another, this century seems determined to turn us all into "preppers." In this case, we're talking about generators, solar arrays, and commercial battery packs, not six months' worth of MREs. What will it take to keep your key locations up and running, if only at a base level, in the event of a serious outage? You can't protect your utility's systems, but you can build your own power redundancy. If your CEO asks you what happens if the lights go out, have a good answer ready.

Here at the Gallagher Bassett Journal World Headquarters, we practice what we preach - a 13 kw automatic generator wired into the house and four big tanks of propane. With a little care, we can run for three to four weeks while the grid is down.* How about you?

*After that, we still have our Keuffel & Esser slide rule (log-log, duplex decitrig), a manual Royal typewriter, several oil lamps, and, yes, MREs in the basement. Unstoppable.



Quick Take 1:
Gabby Who?

If you spent even a small part of your very early fifties childhood parked in front of a seventeen-inch, black and white Philco television watching cowboys like Hopalong Cassidy and Roy Rogers, "Gabby" will always bring back the gruff voice, and even gruffer appearance, of Gabby Hayes, their bewhiskered, cantankerous, but ever loyal sidekick.

Nowadays, in our fallen world of 2021, "gabby" means gabapentinoids like Neurontin and Lyrica. Our friends at the estimable Workers' Compensation Research Institute (WCRI) have just published a very informative report (Off-Label Use of Gabapentinoids for Work-Related Injuries) on the off-label uses of gabby now blossoming in the treatment of comp injuries.

Just the facts, ma'am. Gabapentinoids are approved by the FDA for a limited range of uses, primarily to control seizures* and pain caused by disease-related nerve inflammation, such as shingles, diabetes, and spinal cord injuries. But in 2020, some 10% of comp prescriptions were for gabbies. The great majority of these prescriptions were off-label. There is growing evidence that off-label uses are subject to a number of adverse side effects as well as substance abuse. While gabapentin is not a controlled substance, its chemical near relation, pregabalin, is a Schedule V substance, and gabbies are central nerve depressants. The bottom line is that gabbies are subject to abuse, and several states, profiled in the WCRI study, have taken steps to curb off-label use.

As we noted in a recent issue, the improper use of opioids is fading due to concerted efforts by claims payers and regulators, but we may be, in some part, just squeezing one end of the balloon if all we do is chase prescription misuse from opioids to gabbies. This is a new development, and the major takeaway for you and your comp program managers and adjusters is to watch for potential misuse of gabbies and put the stoppers on it ASAP when you find it. Someone is always seeking to game the system. We can never sit back and say, well, that's fixed for good. The WCRI report lays out all the details for some 28 states. This is very actionable information.

*First-person observation - this on-label use of gabbies works very well indeed.

The real Gabby - no, that wasn't makeup. Don't make movie stars like him anymore.


Quick Take 2:
Comp Claims and DIY Surgery?

Monty Halls, the longtime host of Let's Make a Deal, once explained, "I swiftly discovered that there are few things in DIY (and possibly life) that can't be solved with a large mallet, a bag of ten centimeter nails,* and some swearing." We beg to differ. More to the point, we wish to question a recent essay from, which suggests that employers should "take control of the workers' compensation process to reduce program costs. This includes taking responsibility for contacting the injured employee, obtaining the required information, and coordinating with the workers' compensation claim team."

Most of what you'll read on is excellent and highly recommended, but we have to admit to some reservations concerning DIY heart surgery. OK, OK, handling incoming comp claims is not quite open heart surgery, but it is often far more complex than the routine claims the article seems to anticipate. Carriers and TPAs have invested years of experience in crafting first notice of loss and initial claimant interview processes that are compliant with varying state regulations and that, more to the point, pull in a universe of claim and claimant data that may be needed along the way to manage all but the simplest injuries. Moreover, an experienced adjuster knows when to ask specific follow-up questions, which may be key to managing effective RTW and workplace accommodation later on.

The article goes on to suggest that the employer's staff should play the central role in RTW management and other ongoing claim management tasks. Yes, having people on staff to oversee and assist the carrier or TPA claims adjusters with specific claim management functions can make sense, especially for a large employer with complex RTW issues, but we think the primary job belongs to the professional adjuster who has all of the extensive support apparatus, systems, and embedded expertise of a sophisticated claims shop at his/her beck and call. These resources can be critical and require the kind of scale that only a dedicated claims organization can muster.

Your faithful correspondent learned to fly an airplane at 14.** When I get on an airliner, I am quite content to leave the complicated work to the folks up in the pointy end of the plane. By all means, be an observant and engaged employer in terms of managing your comp program, but be skeptical of taking on the demanding, technical work that you hired the professionals to perform in the first place. The last thing you want to hear when performing a coronary artery bypass graft on your own heart is "Oops!"

*Mr. Halls was Canadian and metric to the core.

**Father flew on business, and mother competed regularly in the transcontinental air races back in the '50s.

Might work, but why...?


Say It Isn't So...

It's not easy being green - or a risk manager. Just when you think you have everything covered, something like this comes along:


A California man has filed a lawsuit after he was injured trying to flee from a bear that surprised him in a Lake Tahoe dumpster.

We're happy to report that the man's injuries consisted only of a twisted ankle and some lower back pain that he incurred when he fell executing his "holy... it's a bear" rapid exit maneuver. The bear was uninjured and apparently unimpressed. Meanwhile, the man's condo association and the association's waste management company have presumably alerted their carriers.

We trust your bear assault covers are in good shape. You never can tell.


Words to Remember

Financial writer, Naved Abdali (Investing: Hopes, Hypes and Heartbreaks), reminds us all of one of those awkward truths that can come back to bite when we use our words carelessly:


It is not a calculated risk if you haven't calculated it.


Oh, By the Way

Our new book is out, a continuation of the Ralph Compton series, available as a trade paperback on the shelf at Walmart or as an e-book from Walmart or Amazon for Kindle. Royal Harding is our nom de plume for fiction. Risk takes on a whole new meaning in Utah Territory in 1890.


Ralph Compton: The Winter of the Wolves (The Sundown Riders Series)

A young cowboy finds gold - and a whole lot of trouble - in this action-packed adventure in Ralph Compton's Sundown Riders series.

It's the bitterest winter anyone can remember, and Earl Tyrone can barely hold back the wolves preying on his family's last few cattle. He gets no help from his older brother, Byrd, who's only interested in striking out for California. Leaving Earl the sole protector of their ma and sister, Byrd finally reveals the secret source of the funds for his ticket West: he found gold on the ranch, and now it's Earl's fortune to mine - if he's strong enough and smart enough to hold on to it.

Earl realizes he'll have to weave a fabric of lies to protect his family and keep prospectors from swarming his land. He hits on a clever plan, but its unintended consequences are rife: painful misunderstandings, conflict with the Utes, and outright murder.

Earl's stash of glittering gold has instead become a black cloud over his family. Can he come up with a new plan to dispel that cloud and find peace and stability at last?


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