Experts Unpick New Workplace Violence Prevention Law: California Senate Bill 553
Experts Unpick New Workplace Violence Prevention Law: California Senate Bill 553
Insurtech Insights talks to Lucy Straker US Focus Group Leader - Political Violence & Deadly Weapons Protection and Jim Rizzo, Product Leader US D&O at Beazley, to find out how the new Bill will impact the insurance industry and its customers
Beazley Experts Unpick New Workplace Violence Prevention Law: California Senate Bill 553

On September 20, 2023, California’s Senate Bill 553 (SB553) was signed into law, marking a pivotal update to the state’s labour code.

Senate Bill 553 passed the California State Senate with a resounding 29-8 vote on May 31, 2023. Introduced by State Senator Dave Cortese, the bill aims to address workplace violence, particularly in the Bay Area, where recent workplace shootings have shocked the community.

While California is the first to require a comprehensive WVPP, other states are considering similar legislation. According to LexisNexis State Net Insights, in 2023 over 100 workplace violence bills were introduced across 27 states, with a quarter of those bills enacted and half still pending. We are watching the issue closely to see if other states follow suit.

Jim Rizzo

Senator Cortese stated that the legislation is designed to protect non-security workers from confrontations with shoplifters and mandates retail employees undergo training on how to respond to such situations. SB 553 also includes additional provisions to enhance workplace safety and prevent further assaults or shooting incidents.

The new legislation, which took effect earlier this week on July 1, also empowers the California Division of Occupational Safety and Health (Cal/OSHA) to enforce regulations addressing workplace violence planning, prevention, and response.

Insurance impact from SB553

The bill applies to insureds with fewer than 10 employees if the site is open to the public. However, it exempts places of employment where there are fewer than 10 employees working at any given time and the site is not open to the public, employees teleworking from a location of their choice that is not controlled by the employer, healthcare facilities covered under a separate Cal/OSHA mandate, and California law enforcement and departments of corrections agencies participating in the Peace Officer Standards and Training (POST) programme.

While insureds may feel the regulation is a burden, it is important to remember that workplace violence events are devastating and highly publicised. These incidents often mark the beginning of a crisis that can result in emotional, physical, financial, and reputational harm, potentially leading to litigation, business interruption, or missed financial opportunities.

Lucy Straker

What are the most significant challenges that businesses might face in developing and implementing a written workplace violence prevention plan?

Lucy Straker : One of the biggest challenges for established companies is that while they believe the processes they have in place will be compliant, they often then realise what they have isn’t robust enough. Companies also sometimes want to wait and see if they will get an extension or risk it and monitor how closely authorities are checking. 

Some companies will find all of the details overwhelming. Many businesses also lack the expertise and resources to ensure they comply with SB553, especially smaller, less risk-managed organisations. Cal/OSHA released a model Written Workplace Violence Prevention Plan (WVPP) for General Industry (non-healthcare) which serves as a plan template but lacks the ‘how to do it.’ It is important for companies to seek expert advice from third-party vendors, their insurance brokers, carriers and risk management partners. 

What are the essential components of effective employee training on workplace violence prevention under SB553?

Lucy Straker : Violence is a risk that every insured must cover and plan for. Businesses have a duty of care, and staff and customer well-being is not just a legal obligation, but a moral imperative. Insurance companies can bridge the gap and support insureds to build a safer and more resilient workplace that is compliant with the new regulations. Employee engagement is mandated as part of SB553. The type of employee training includes how to:

  • Access a copy of your WVPP and Violent Incident Log 
  • Report workplace violence incidents and concerns
  • Respond when faced with violence

What are the potential consequences for businesses that fail to comply with SB553?

Jim Rizzo: Failure to comply with the requirements may subject employers to penalties of up to $25,000 for serious violations, and up to $158,727 for “willful” violations. Failure to comply could also result in regulatory consequences and will likely be used in litigation to support theories of liability, including failure to provide a safe workplace – a duty every employer has. The result will be an increase in exposure and greater vulnerability for all. 

Jim Rizzo

From a risk management perspective, what should Risk Managers, Directors, Officers, and Business Leaders prioritise when preparing for SB553?

Jim Rizzo: Building resilience to the threat of violence requires a multi-disciplinary approach. Create a multi-disciplinary team that includes a representative of risk management and set up working sessions to start the process. Disciplines to include on your team are Human Resources, Risk, Legal, Operations, Security, Training, and Safety/Emergency Management.

What proactive measures can companies take to mitigate the risk of violence in the workplace?

Lucy Straker: There are lots of measures that can be taken to mitigate risk. Injury prevention programs need to be driven from the top down and conducted from the bottom up. Companies also need well-established and tested emergency response procedures and a method to receive and evaluate anonymous reporting. They should ensure they cover everything from emerging threats to actual events and encourage people to report. Building a culture that supports such reporting is important. 

Train people regularly on what to do if they see any warning signs that could escalate into violence. People are the first line of defence and awareness can literally save lives. Under SB553 training must also be interactive. It’s not enough to provide on-line training that doesn’t have an engagement component with an instructor. 

Finally, know what the risks are. Regularly (not just once a year) conduct violence risk assessments and identify threats and vulnerabilities. 

How can insurance solutions, such as Deadly Weapons Protection, support businesses in complying with SB553 and managing the associated risks?

Lucy Straker : Deadly Weapons Protection (DWP) policies  are designed to protect your people, brand and reputation. CrisisRisk, a Beazley strategic partner on the DWP program, already offers insureds support before, during and after a deadly weapon event. In response to SB553, they have enhanced their offering on the front end to offer DWP insureds a SB553 ToolKit. This is designed to assist Beazley DWP insureds with the development of their WVPP. 

Jim Rizzo: The Bill can also impact employment practices liability, general liability, workers’ comp, reputational risk, business interruption, D&O, loss of business opportunity, among other areas. Work with your brokers to make sure you are properly covered and conduct a gap analysis. 

How does SB553 impact smaller businesses, particularly those with fewer than 10 employees, and what unique challenges might they face?

Lucy Straker: If employees telework from a location that their employer does not control, their home or a coffee shop for example,the settings are exempt from the law’s requirements. However, companies with fewer than 10 employees but with workplaces that are publicly accessible, retail stores for example, need to be SB553 compliant. 

This can be challenging as many small businesses, such as retail/restaurants, often have seasonal staff and a high turnover, which can make it difficult to engage employees in the measures needed to be compliant with SB553. Small businesses may also not have the resources or support to meet SB553 regulations. 

Companies of all sizes are finding it overwhelming, so when a company’s workforce is already lean,  it’s a stretch on their existing resources.

Given the current political climate and rising violence, how do you see workplace violence prevention and related legislation evolving in the future?

Jim Rizzo: While California is the first to require a comprehensive WVPP, other states are considering similar legislation. According to LexisNexis State Net Insights, in 2023 over 100 workplace violence bills were introduced across 27 states, with a quarter of those bills enacted and half still pending. We are watching the issue closely to see if other states follow suit.

In brief

Proactive measures to mitigate the risk of violence in the workplace

  • Injury prevention programmes need to be driven from the top down and conducted from the bottom up. 
  • Companies need well-established and tested emergency response procedures and a method to receive and evaluate anonymous reporting. They should ensure they cover everything from emerging threats to actual events and encourage people to report. Building a culture that supports such reporting is important. 
  • Train people regularly on what to do if they see any warning signs that could escalate into violence. People are the first line of defence and awareness can literally save lives. Under SB553 training must also be interactive. It’s not enough to provide on-line training that doesn’t have an engagement component with an instructor. 
  • Know what the risks are. Regularly (not just once a year) conduct violence risk assessments and identify threats and vulnerabilities. 
  • Have comprehensive policies in place to respond to threats. Prepare for the worst case scenario at all times and always assume weapons will be involved. Ensure everyone is familiar with all company policies. 
  • Have building security measures in place. This could range from video surveillance systems to panic buttons. 
  • Employers should use emergency communication tools and systems to distribute timely information to employees. Conduct regular drills and simulations to familiarise employees with emergency procedures and test the efficiency of communication channels. Make sure to use different methods to reach multiple generations.
  • Address your emergency response and evaluate relationships with local authorities, including police and fire departments.
  • In the event of an incident, look back and see what could have been done better. Hindsight is a powerful tool. 
  • Encourage work/life balance and a supportive culture. 

Exemptions to Bill 553 (SB553) include: 

  • Places of employment where there are less than 10 employees working at any given time and the site is not open to the public
  • Employees teleworking from a location of the employee’s choice which is not controlled by the employer
  • Healthcare facilities, which are covered under a separate Cal/OSHA mandate
  • California law enforcement and departments of corrections agencies participating in the Peace Officer Standards and Training (POST) programme

Beazley Deadly Weapons solutions

Beazley offers a toolkit as part of their Deadly Weapons Protection product that addresses SB553 regulations. It assists companies with planning and implementing a workplace violence prevention plan by offering them the following resources cross referenced against the Cal/OSHA requirements and model:  

  • ‘How to Instructional Guide’
  • ‘Inventory Checklist-First Step Towards California SB553 Compliance’
  • ‘Workplace Violence Prevention Plan Template’ 
  • ‘Employee Workplace Violence Prevention Program Handbook.’   
  • ‘Ask the Expert’ function

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