When losses strike with unnecessary frequency or brutality, it increases an organization’s cost. To keep costs competitive, it is crucial to minimize the severity and the frequency of accidents through a concrete foundation of loss control. This involves analyzing and identifying ways in which you may be found accountable and develop executable procedures to handle the exposures.
Effective loss control programs are created to minimize losses, reduce costs and enhance business results.
Expenditure arises from not only owing to the direct cost of the claim, but also due to all the indirect costs that can come from a claim that may potentially impact any organization, sometimes critically. Indirect costs result from unseen factors when no definite value can be put in place in order to effectively mitigate the risk. As a result, indirect costs are exorbitant and can extensively hack into an organization’s operating overheads. Loss control has proven effective in controlling and preventing accidents, increasing efficiency and productivity and reducing operating costs. Implementing a customized safety program which is suited to an organization’s needs can be just one strategy for effective loss control. This is done by placing a significant amount of money aside to be saved for both reimbursements as well as to cover any unanticipated additional costs that come to light after the claim. However, while this may seem like an effective solution, more precise programs may also be needed to suit a facility’s requirements. Here in comes the effectiveness of a customized loss control program! It provides management with clear direction and a methodical approach to controlling losses.
It is important to recognize and list the potential hazards that are detected in the work environment.
Once the probable incident areas and dangers are detected, they need to be extensively noted to all persons within the organization. That process starts at the top with the executive management. High level management needs to actively endorse and model safe behavior which will in turn promote a safe culture. Efforts in safety and risk mitigation does not require one to be performing at world-class level, but it should be focused. Begin with a program and a plan. After identifying the potential risks that the organization is exposed to, the next step is to dig a bit deeper. You should at first ensure that the program gets off the ground. Later, you can begin to modify the specifics, to meet your firm’s goals. Even the bare minimum effort makes a considerable difference in the safety of the organization.
Implementing effective loss control procedures minimize the probability of being liable, and even if found accountable, the damage will not be large, as premiums are based on the amount insurers pay out in claims. Remember, an increase in claim costs means an increase in premiums also. Businesses with effective loss control procedures and claims frequency pay lower insurance premiums in comparison to the less effective loss control procedures and practices. Businesses with history of poor loss control can also face difficulty when obtaining property insurance.
Girija Shaffer , CEO & Founder of Auspice Risk, has developed a full suite of customized risk management services offered nationally to Risk Managers, Insurance Program Managers, Brokers & Agents. Recognized for her ability to increase customer retention rates, increasing business development opportunities and providing outstanding customer service.