2l6 ORGANIZING SCIENTIFIC RESEARCH FOR WAR 



tractors in advisory or other capacities and hence were not quaUfied as 

 "employees." 



This situation resulted in a reluctance on the part of contractors to under- 

 take OSRD work for fear both of loss of personnel and of possible future 

 liability on the contractors' part. Staff crises were precipitated at several 

 institutions with employees insisting that their families be accorded some 

 measure of protection. 



Several contractors individually attempted to obtain adequate insurance 

 protection for their employees and themselves. This proved to be exceed- 

 ingly difficult because insurance companies were reluctant to take a small 

 number of very dangerous risks. The secrecy surrounding most of the work 

 prevented disclosure to the insurer of precise information which would 

 enable it to establish some actuarial basis for the premium, and most war 

 risks then were incalculable. As a result, few institutions could obtain ade- 

 quate coverage and those which did so found the rates to be almost pro- 

 hibitive. 



Contractors forced to pay large premiums demanded that OSRD reim- 

 burse them for the expenditures as necessary costs of performing the contract 

 work. After careful investigation of the facts establishing the necessity for 

 such insurance and after the General Counsel of OEM had approved the 

 legality of the disbursement, such expenditures were approved by the Con- 

 tracting Officer. 



It was obvious that a situation in which the contractors affected were 

 compelled to make individual deals with different insurers was haphazard 

 and uneconomical. Yet, there was no practical way in which OSRD could 

 "assume" such risks and act as self-insurer. The legislative permission to 

 indemnify contractors was, of course, inapplicable to a situation in which 

 the primary necessity was indemnification of personnel rather than con- 

 tractors. Reimbursing an individual contractor for premiums caused little 

 difficulty but a more economical method of handling the problem was 

 desired. 



The matter was the subject of several conferences between OSRD and its 

 contractors, the latter requesting that OSRD undertake to unite their re- 

 spective problems and interests so as to effect a coherent and economical 

 plan. A number of the leading insurance syndicates in the United States 

 declined to attempt a solution of the problem. Finally, however, an accepta- 

 ble proposal was secured from a syndicate headed by the Fidelity and 

 Casualty Company of New York. After obtaining an opinion from the 

 General Counsel of OEM establishing the legality of his action, the Director 

 of OSRD approved the acceptance of the proposal. 



The main feature of this plan was the payment of a principal sum of 

 $10,000 to any assured who died or suffered total and permanent disability 

 "as a direct result of his OSRD activities." Certain other benefits concerning 



