Even when an employer commits toa culture of safety, some jobs are just too dangerous to controlall the inherent risks.

In these professions—think logging, mining, farming androofing—accidents do happen, and the injuries are often verysevere.

As such, these jobs are often deemed too risky to be placed inthe private Workers' Compensation market, and so insureds must turnto state funds and pools—markets of last resort.

However, those in the industry with expertise in underwritinghigh-risk labor say turning a Workers' Comp profit in theseproblematic professions isn't as impossible as one might think.

But it isn't easy, either. After all, the Workers' Comp marketin general—grouping so-called risky and nonrisky jobs together—hasbeen operating at an unprofitable combined ratio above 100 for thelast several years.

STEEP SLOPES AND CHAINSAWS

Logging ranks as one of the nation's most dangerousprofessions—enough so that it has inspired more than one realitytelevision show starring the brave men and women who take on thetrees.

“You quickly appreciate the dangers loggers face,” says GaryAscher, president of Loggers Insurance Agency in Sparta, Wis.

Machinery, sharp blades, steep slopes, falling heavy timber andextreme weather constitute the working environment for loggers—oneof the deadliest jobs out there, according to the U.S. Bureau ofLabor Statistics.

“Slips and falls definitely outnumber everything claims-wise;there's a lot of logging done in the winter on uneven ground,” saysAscher. “But it's what else happens that puts it on the radar asone of the deadliest jobs—getting hit by a falling tree, forone.”

Ascher started as a commercial underwriter and eventually hisbusiness contacts introduced him to an intriguing niche:sawmills.

Insurers initially were not enthusiastic. “They said, 'No way!'when I brought it to them,” Ascher recalls. “I didn't want to giveup. I knew it had more exposure than a typical machine shop, butwell-run is well-run.”

So Ascher says he recorded hispotential clients at work, and he brought the video evidence toinsurers and got one to write it.

From that point on, securing policies for loggers was a naturalprogression.

Coverage from insurers “was fragmented,” he says, recalling hisresearch nearly 20 years ago. “And [loggers] weren't reading thepolicies they were able to get. I was finding a lot ofexclusions.”

Ascher developed a form and got an insurer, Secura, to comeaboard.

“It can be done; it's expensive, but with a good safety history,there are markets that will take the risk,” he says. “A safe loggeris just like a safe contractor, and the private markets take themon. It's a matter of underwriting.”

It helps that the logging industry as a whole is dedicated tosafety and driven by regulation and human compassion, as manylogging operations are family businesses spanning generations. It'sa tight-knit community.

Safety programs with anaccompanying underwriter-valued “Master Logger Program” certificateare available, Ascher notes, in several states including Wisconsin,Kentucky, Florida, Maryland and Louisiana. Additionally,organizations such as the Vermont Division of Forestry, theLouisiana Logging Council, the Texas Logging Council and Maine'sCertified Logging Professional Program offer underwriter-welcomesafety courses.

New startups will have a tough time getting coverage from theprivate market and usually wind up in the state fund and pools,unless the owner has a good safety history with another outfit.

Similarly, chainsaw-loggers have a tougher time gettingprivate-market coverage than mechanical logging, due to theirgreater number of injuries.

DIY SOLUTIONS, ANIMALS & MACHINERY BALE INTO BIGRISK

Farmers have made insurance-claims headlines this year due toweather—specifically, the severe drought that has affected much ofthe Midwest and its crops. But with its short-term employees,fix-it-yourself solutions, heavy equipment and the presence oflarge animals, every year farming faces the potential for highWorkers' Comp losses.

“There are such a large varietyof duties on the farm,” says Kurt Eaves, vice president at Iowa'sGrinnell Mutual Reinsurer, a reinsurer of 280 farm mutuals thatpicks up Workers' Comp. Many carriers, he notes, won't writeWorkers' Comp for farms because the business “lends itself toseverity.”

Many Workers' Comp claims from farms are generated bymaintenance, says Eaves. Sometimes farmers “don't have the luxuryof having the right equipment” or a tradesman on hand for aspur-of-the-moment repair situation.

That means a farmer might use a loader to get to heights, like aroof, or might do his best to fix an electrical problem on his own.These unorthodox measures can lead to injury.

Another source of farm claims: seasonal employees who aren't asexperienced as full-time farmhands, says Eaves. Requirements toprovide Workers' Comp for seasonal hires vary by state.

Dealing with machinery and ornery beasts adds to farms'high-risk status. “These are big, heavy animals,” he says. “You canget yourself in a very bad spot if you're not experienced.”

But for Grinnell, Eaves says, Workers' Comp for farmers“continues to be favorable. Like anything, it's about understandingthe industry you're writing—and we've been entrenched in the ruralmarketplace for a long time.”

The best risks are selected by using site visits conducted byexperienced loss-control staff, says Eaves. And, of course, a goodloss history is important if a farmer is to stay out of state fundsfor Workers' Comp.

Grinnell assists farmers by providing risk-management advice,safety training and an accident-investigation program.

SEVERE LOSS HISTORY DRIVES ROOFERS' COVERAGEHIGHER

The higher the altitude at which you work, the riskier yourposition—so roofers are “definitely considered a high risk,” saysDean Mortilla of Woodbridge, N.J.-based NIP Group, a specializedbusiness-insurance and risk-management intermediary. Mortilla ispresident of NIP's specialty brokerage.

The loss-severity history of roofers' Workers' Comp insurers, hesays, is so bad that “some insurers won't touch it anymore—even if[the roofers] are two feet off the ground.

“Rates are up and carriers are out,” he adds, speaking of thecurrent marketplace. “You can get it placed, but it's expensive.Carriers want their rate.”

Mortilla says he recently wrote Workers' Comp for a roofingoperation in Michigan with payroll of just over $1 million forabout $153,400—15 percent of payroll spent on Workers' Compinsurance.

Being placed under the classification of construction doesn'thelp roofers obtain Workers' Comp coverage—especially in New York,where new labor laws have driven claims costs up. California isanother hard-to-place state.

What can roofers do to improve the chances they get coverage ata good rate?

“Have no losses,” Mortilla says flatly. “Have a safety programdeveloped by a risk manager. Train employees on harnesses and hardhats.”

“Flukes” are acceptable, Mortilla says. That is, if a roofingbusiness has a clear claims record for several years, it can likelystay in the private market after it has a loss.

“The insurers look for frequency,” he explains. “That's the signsomething is wrong, and that business won't be able to getcoverage.”

As the economy improves, Mortilla is seeing more submissions forcoverage for new startups. However, they typically end up in thestate funds due to the lack of loss history.

Startups “probably have to stay in [the state funds] for one totwo years before they can get in the private market, but some stayeven then because it's cheaper,” Eaves adds. “They don't care ifthe service stinks.”

EXPERT DIGGERS HELP SIZE UP MINING RISK

Another profession always on the “most-dangerous” lists ismining, but Chandler Cox says that while the fatal incidents getthe headlines, “the number of fatalities has dropped dramaticallyover the last decade.

“People have an image of whatmining is, but it has evolved to become an automated, highlyregulated industry,” adds Cox, president and CEO of American MiningInsurance, a W.R. Berkley company.

Underwriting Workers' Comp for miners is all about understandingexposures—and there's no better way to do that than by hiringformer mining foremen, says Cox: “They know how to size up thecustomer, talk the language and determine whether a miningoperation is serious about safety or giving us lip service.”

Other than the risk of collapse, underwriters must find outabout a mine's geology and roof supports, amount of methane gas andhow it handles dust.

“Basically, we ask our people one question: Would you work inthis mine?” Cox says. “If the answer is no, we won't touch it.Expertise matters. Loss control must be a critical part of theoperation before we agree to insure it.”

If the mine asks for help in developing a loss-control plan,American Mining can provide it. And the industry has benefitedenormously from regulations on the state and federal level.

“There are still many dangers, but the job is far safer than itwas,” says Cox, who called mining safer than farming or the lumberindustry.

For this reason, the market has become increasingly competitive,especially for surface mining, he adds.