Located just outside of Dallas, Texas, the city of Mesquite is home to 145,000 city residents who rely on services provided by 1,100 city employees, 200 city properties, and 800 city vehicles. CLM Fellow Charles Gillenwater explains how he’s been rounding up risk in the city for 13 years.
Q. What’s your philosophy on risk management?
A. We print it right on our risk management pamphlet: Protecting people and property that make our community a better place to live, work, and do business. I believe every employee, volunteer, and contracted service provider for Mesquite is responsible for risk management. Managing risk must be a part of every department’s strategy for delivering value to our citizens while avoiding loss as much as possible and maintaining business continuity during recovery from losses that do occasionally happen.
Q. What do you love about risk management?
A. For me, risk management is interesting and exciting, and it provides daily challenges because no two days are the same. We handle everything from the catastrophic to the everyday claim. But I get a lot of satisfaction in providing risk management services because I help make our community better. When I worked in the private sector, I looked at risk management as something that provides a competitive advantage for companies. In the public sector where I work now, it’s all about protecting people and property for the sake of our residents.
Q. What differences are there between managing risks in a public versus private setting?
A. My goal is to minimize service interruptions. So that could involve looking at claims, which I do every day for both workers’ compensation and liability claims. I like to see how those claims in progress are moving along. I also focus on contractual risk transfer opportunities. We’re not only out there buying insurance and getting people and vehicles back to work and in service, but also we’re looking at how we transfer risk effectively via contract and not through insurance buying. Any time we enter into a relationship with an outside vendor—be it a construction or services contract—we want to make sure that the risk is shared in a way that makes sense for Mesquite. In other words, we feel our vendors should be responsible for any losses that occur as a result of their actions, and we’ll take care of any losses that may occur as a result of our actions. We want to make sure they understand that we’re not going to cover them for their mistakes, which is only fair.
Q. What kinds of risks are you managing?
A. Our top exposure is workers’ compensation; injuries to our employees are our number one cost. Within that, we have first responders who put themselves in harm’s way intentionally. So they are being told to go out there and take risks, and there is a higher likelihood they will get hurt performing assigned duties. No matter what, though, we have a duty to our employees to take care of them when they are called upon to do this. Also in our general liability program, we have law enforcement liability for claims against officers who are accused of overstepping their authority and cause harm or damage. Property is another top risk, with exposures in the hundreds of millions of dollars.
Q. Are you ever afraid of being labeled risk averse?
A. As a risk management department, a lot of people think we’re going to tell them not to run with scissors or something like that. Whether it’s in the private or public sector, I try to understand the business aspects of what we do every day, then I adapt to that in a very collaborative way. The risk manager of today has to be a person who is willing to collaborate with all of the stakeholders. In this case, our stakeholders involve our residents, businesses, and community. Everybody needs to understand their role in risk management. We’re not here to hinder the process but rather to ensure that business continuity occurs.
Q. Tell us about a teachable moment in your past.
A. You learn so much from a large property catastrophe claim. For instance, early in my career, I learned the value of accurately documenting a loss when we failed to capture aspects of the scene after an event occurred. We went right into cleanup mode and getting back to business, which was the right thing to do in a sense. But when we tendered our claim to the carrier, we quickly found ourselves in negotiating mode, as you might expect in a seven-figure loss. We didn’t document all of our activities and damage properly. So from that we learned to involve as many people in our organization as possible. We now take photographs, we involve accounting, and we build our claims file in a way so that when we tender the claim to the insurer, it’s very clear.