Loss Control Measures
Loss control involves identifying and analyzing ways in which you may be found liable (your "exposure to liability") and selecting and implementing techniques to be used to handle the exposure. You can take steps to reduce the possibility of unforeseen losses and the impact of those that do occur, whether from fires, storms, thefts, lawsuits or injuries.
You can minimize risk in many ways including:
- Conduct safety inspections and programs for training employees in first-aid methods.
- Install a sprinkler system and an alarm that automatically notifies firefighters of a fire. This may make losses less likely or injuries less severe.
- Make sure the wiring in your building is in good shape.
- Avoid performing dangerous activities. Consider outsourcing any process hazardous to your health or premises.
- Train workers to lift heavy items properly and to wear safety masks and gloves when working with hazardous substances.
- Keep only a small amount of cash in the cash register and deposit the rest in a floor safe that cannot be opened by employees.
- Store inventory in two locations so if there is a loss, the entire inventory will not be destroyed.
- If you lease out part of your premises, you might require your tenant to protect you from liability claims of people they allow in the building.
- Make sure that all your drivers have good driving records. The cause of most accidents is the driver. You should always check the driving records of any employees who will drive on company business and never allow a person with a poor driving history to drive.
This list is far from complete. You should ask your agent or insurance company if they have brochures or publications on loss control topics.
Impact of Implementing Loss Control Measures
Implementing loss control measures may make it less likely that you will be found liable, or if you are found liable, that damage will be large. Because premiums are based on how much insurers pay out in claims, an increase in claim costs also means an increase in your premiums. Businesses with very good loss control measures and claims histories will often pay lower insurance premiums than those with less effective loss control measures and practices. A business with a really poor loss control history may also have difficulty finding property insurance.
You should talk to your agent about which risk management techniques you can use that may reduce your premiums.