Loss Control Strategy Checklist: Broker-Client Teamwork Required
There are a number of strategies to consider when brokers and their clients design and look to implement an effective loss control program.
Teamwork between client, broker-agent or risk management consultant.
All parties should work together to compile a complete file on basic underwriting information–specifically, property underwriting information such as building construction, occupancy, protection and evaluation, and an underwriter's assessment process. Also, fire suppression system design, maintenance and inspection, and insurance-to-value details can be developed prior to the need for marketing.
The soft market and corresponding underwriting processes of the past decade have created gaping holes in core underwriting file information needed today.
Complete documentation of basic safety programs and processes.
Overall safety programs, including Occupational Safety and Health Administration emphasis programs such as personal protective equipment (hard hats, gloves and respirators, etc); confined space entry; lockout-tagout (shutting off power sources to machinery); machine safeguards to prevent injuries; safe forklift operation; and mandatory identification of hazards including chemicals and waste.
These should be formally written into policies and procedures. Documentation of implementation should be ready for OSHA or carrier loss control review. This speeds the underwriting portion of any loss control survey, allowing more effort on hazard control.
Outline compliance status and planned actions on all previous carrier loss control recommendations.
In the frenzy of todays marketing and effort for full disclosure, most previous recommendations are shared to all prospective carriers, so "shopping" for a less strict loss control entity is fast becoming a thing of the past.
In cases where a client disagrees with a past carrier on the identified hazard and control measure, more effort is needed to objectively determine the true exposure and explore practical alternatives.
Clearly define the loss control services that are needed to help control or reduce loss.
Communicating these needs with a broker assure these services are included in insurance proposals.
Start the renewal process early.
Clients should communicate with their carrier and broker early to determine in advance the additional information and compliance issues that will significantly impact the next renewal with existing as well as other carriers.
Demand resources that will be needed to accomplish the underwriting concerns and issues before the 60-to-90-day renewal efforts begin.
Maintain a balance of in-house risk management and safety efforts.
Brokers and carriers should help their clients maintain a vital balance of in-house risk management and safety efforts on loss control by controlling current loss trends and loss prevention of the larger, more catastrophic potential claims.
Terry Ries is vice president, loss control at Near North Insurance Brokerage Inc. in Chicago.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 12, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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