For fans of vintage NBA matchups, this year's final between the Boston Celtics and the Los Angeles Lakers was a welcome treat. Whether cheering for K.G. or Kobe, some people have such a basketball jones that they want to dribble in their spare time at work. The idea sounds safe: To help employees relax and stay fit, erect a basketball stanchion with hoop on company property.

A closer look, however, reveals that this seemingly innocuous perk may need a timeout. Should a risk manager allow a basketball hoop on the premises for employees to use on breaks or in their spare time? The issue carries many risk management implications.

When faced with the basketball issue at multiple locations, one risk manager reluctantly agreed to allow hoops, with his regional vice president's approval and with the understanding that the latter's profit and loss statement would absorb any claims. Corporate counsel also drafted a release to be signed by any basketball-playing employee. The risk manager realized that that the release was likely unenforceable but functioned instead merely as a claim deterrent. He also posted signs instructing employees to use the basketball equipment at their own “risk and peril.”

Still, there is always the threat that Lester in accounting will blow out his knee while playing, resulting in an expensive workers' compensation claim. Perhaps there is a rookie sales representative who fancies himself the next Michael Jordan and decides to juke into a cross-over dribble, spraining an ankle in the process. Carla from marketing could dive for an errant ball to demonstrate her team spirit — and end up with 13 stitches. There goes your workers' compensation experience modifier.

On the bright side, a trucking company has a full-court outdoors and a full gym indoors. So far, the company has neither had claims nor hoop-related injuries. In fact, the risk manager believes that the facilities enhance employee morale.

Hoop Dreams

Admittedly, this is a tough call. Firms want to keep employees happy, but they also must protect themselves both legally and financially. Before adding a hoop, a company should consider substituting another activity for basketball. Many risk managers may veto basketball, as some states consider recreational injuries work-related. In some jurisdictions, injuries suffered during such an activity might be deemed “arising out of and in the course of employment.” The reward for creating this diversion might be a spike in workers' compensation claims, validating the quip, “No good deed goes unpunished.” Being the bad guy and saying “no” can be difficult. However, that is exactly what risk managers must occasionally do to protect the companies they serve.

While potential injuries arising from playing sports abound, there also are increased odds of back injuries from such simple activities as sitting in a work chair. In fact, repetitive stress injuries cost the industry a substantial amount each year. Some estimates suggest that one out of every three workers' compensation claim dollars pays for a repetitive stress injury.

Other risk managers might provide employees with a basketball hoop, despite the risks. Companies that provide this kind of mental “release” could argue that they can generate higher profits while enhancing quality and retaining employees significantly longer than those who don't. Engaging in exercise such as basketball can help workers avoid strain injuries by staying physically active.

Slam Dunking Morale

A huge success factor in today's business is employee morale. If building a hoop costs a company $10,000 per year but contributes to employee contentment and, in turn, increased productivity because of the benefits of physical activity, then perhaps the investment is justified.

The advisability of providing basketball hoops may ultimately depend on the workers' compensation laws in your state as well as the relationships you have with employees. One company with a “live-well” program offers workout sessions on-site for employees to reduce health-care costs. Thus far, the firm has reported no claims. By incorporating hoops into an overall exercise program, employers may be able to improve the overall health of the workforce.

Risk managers may be inclined to avoid risk altogether when simply managing perceived threats may work in the company's best interest. While basketball may increase an organization's exposure to injuries, fully evaluating the idea requires a broader view of how hoops could help the organization. Many job sites have fitness facilities. However, from a broader risk perspective, some risk managers would rather provide something that makes employees healthier, boosts morale, and increases productivity. Risk avoidance may reduce workers' compensation claims. But it also can frustrate the goal of keeping employees happy.

Sound Business Decisions

Perhaps this is more of a business decision than a risk management dilemma. Risk management's role is to keep business people informed. When executives ask, “Hoop or no hoop?” one answer is that there is no way to know if a basketball-related injury will or will not be covered by workers' compensation. The fact that no workers' compensation benefits are due does not preclude potential liability. Workers' compensation benefits may not apply because the activity is outside the scope of employment. If so, then the employee can sue an employer outside the workers' compensation system.

Still, workers' compensation and liability pitfalls arise with basketball-related injuries on the job site. A basketball hoop can produce lawsuits. Take the example of a lawsuit arising from a company softball game. When an outfielder missed the cutoff man, an errant ball smacked a co-worker on the head, leading to a lawsuit. An employee that is injured during a basketball game might also sue because the pavement surface was uneven or because a stanchion supporting the hoop was either too close to a wall or lacked the proper padding. A disgruntled worker could even sue an employer for allowing a co-worker to keep playing after others complained that he was too aggressive. Even if such a claim lacks merit, and even if the company defeats it in court, the associated legal fees will likely be more costly than the payout for a minor workers' compensation claim.

The bottom line is this: Nothing is risk-free. Thus, weigh the potential benefits such as positive morale, enhanced goodwill, and so on with the probable risks. Decide if the plan is feasible. Of course, this rationale is most effective if your operations pay for the cost of their claims.

So, how about that pickup game? The property claim people could play against the liability adjusters. Maybe shirts versus skins?

Kevin Quinley is an insurance claim expert and author. He can be reached at [email protected]. Visit his blog, The Claims Coach, at http://claimscoach.blogspot.com.

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