FISCAL AFFAIRS 215 



The general principle underlying OSRD insurance practices was simply 

 that OSRD approved a contractor's self-protection by reasonable insurance 

 whenever the risks covered were attributable to OSRD work and the loss 

 in the event of accident would fall on the contractor. 



There remained the most serious difficulty of all — providing protection 

 for scientific personnel voluntarily engaged in extra-hazardous work on 

 behalf of OSRD. These fell into three broad categories: (i) salaried Gov- 

 ernment employees, (2) OSRD appointees serving without compensation 

 (WOC), and (3) contractors' employees and others associated with the 

 contractors in the performance of OSRD contracts. 



As salaried Government employees were protected by certain statutory 

 benefits, they presented no particular problem. To secure insurance protec- 

 tion for WOC (without compensation) personnel was difficult, since OSRD 

 could neither directly purchase special insurance for them nor reimburse 

 contractors for premium payments. This situation was temporarily allevi- 

 ated at a critical time by a grant from Carnegie Corporation of New York 

 to the National Academy of Sciences which permitted the Academy to pay 

 insurance premiums in a limited number of cases. The matter was particu- 

 larly pressing because the activities undertaken for OSRD might have 

 operated to invalidate insurance regularly carried by the appointee; and a 

 man willing to undertake certain risks on his own might well think twice 

 before taking a step which, in the event of an accident, might leave his 

 family unprotected by insurance. 



Most pressing was the problem of contractors' employees. These men, 

 who normally were engaged in teaching or some similar academic pursuit, 

 were being asked without special compensation to undertake new activities 

 involving risk of death or permanent disability. All their existing personal 

 health or accident insurance, double indemnity benefits in life insurance, 

 and much ordinary life insurance (preferred risks and rates) might be held 

 to be voided by these new activities which fell within the usual policy ex- 

 clusions of "deliberate self-exposure to great danger" and "risks of war." 



Some of the individuals were technically qualified for State Workmen's 

 Compensation benefits as "employees," but the hazardous nature of their 

 work made it impossible to persuade underwriters to assume the risks. 

 Since most of the activities were secret in nature, full disclosure of the risks 

 could not be made to an insurer. Moreover, many of the men qualified for 

 Workmen's Compensation would, in the event of accident, receive benefits 

 grossly disproportionate to the value of their services, their financial and pro- 

 fessional standing and the net amount of their losses (in insurance voidance 

 and otherwise) by reason of their OSRD work. Further, the majority of 

 those affected were not eligible for Workmen's Compensation either because 

 they were employees of universities and other "charitable corporations" 

 excluded by state laws, or because they were merely "associated with" con- 



