How to develop a loss control program

Using a loss control program in your business can help prevent expenses, hassles, and business interruptions from occurring, which makes it worth your time. We’ll go over how to identify risks, develop a loss prevention plan, monitor and improve it, and other important information to help you get started.

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Before you can develop a loss prevention program, you must first identify potential risks that your business faces. Some will be common to all businesses, while others will be specific to your industry. For example, a manufacturing company will have to deal with equipment safety hazards, while a retail business will face customer safety risks.

Some common risks that businesses face include:

• Theft
• Workplace injuries
• Property damage from fires, floods, vandalism, etc.
• Regulatory compliance (OSHA, etc.)
• Cybersecurity threats from data breaches, ransomware, etc.
• Liability claims

You can identify potential hazards and vulnerabilities in your business by conducting a risk assessment. The process involves gathering input from employees, conducting walkthroughs of your facilities, reviewing past incidents, and using industry benchmarking to see what similar businesses have faced. Checklists, software, and insurance guides can be used to give you additional insights and make sure you don’t miss anything.

After you have made a list of business risks, you can then prioritize them to address the most critical threats first. Keep in mind many businesses evolve over time, which means new risks may emerge. Be sure to keep your list updated so you can address new issues early.

After identifying risks to your business, the next step in risk management is to create a plan of action to address them. To be effective, the objectives in your loss control plan should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.

Consulting with your insurance provider before you begin can help identify key areas to target or refine. They can also help you determine which insurance policies will benefit your business, what steps you can take to strengthen your loss control plan, and what savings you can receive for ensuring safe working conditions.

Key policy recommendations may include:

• General liability insurance
• Commercial auto insurance
• Cyber insurance
• Workers’ compensation insurance (including employer’s liability insurance)
• Employment practices liability insurance (EPLI)

Your loss prevention action plan must have specific objectives, such as reducing workplace accidents, minimizing property damage, or preventing theft. The objectives should also be measurable so you can adjust your plan if necessary to help achieve your goals.

Your loss control safety program should include a safety policy with guidelines and procedures that employees can follow. This ensures a consistent approach to safety across the organization. It reduces confusion and encourages employees to act.

Be sure everyone knows who’s responsible for implementing and monitoring loss control measures. For example, if you need to install deadbolts on all your doors, don’t assume someone will get to it when they have time. Assign the task to someone with a clear deadline for completing it.

You may have heard the saying, “an ounce of prevention is worth a pound of cure." This principle should serve as the cornerstone of your loss control program. By proactively addressing potential issues before they arise, you can significantly reduce the need for costly and time-consuming corrective measures down the line.

The first preventative measures you implement should be physical controls, which may include:

• Security systems
• Fire safety measures
• Ergonomic office furniture and equipment
• Safety barriers around hazardous equipment or supplies
• Proper lighting
• Slip-resistant flooring
• First aid stations
• Ventilation systems

It’s also important to ensure employees are trained in occupational safety protocols, proper equipment use, and emergency procedures to help minimize workplace injuries and other risks.

Providing employees with personal protective equipment (PPE) and other safety resources, for example, may not be effective if they don’t understand the importance of using it or know how to use it properly. Employees should have a clear understanding of how to minimize the risk of accidents and injuries, and what to do in an emergency.

Regularly inspecting and maintaining equipment, tools, machinery, vehicles, and facilities should also be part of your plan. For example, routine checks on machinery may reveal worn or damaged parts that could pose safety risks. A vehicle inspection could identify the need to replace worn brake pads or tires, or to replenish oil or transmission fluid to ensure fleet safety.

Read more about the leading causes of workplace injuries and their associated costs.

An effective loss control program requires continual monitoring and follow-up to address new risks and ensure employee safety. Any time there's an incident, be sure to write it down. You can later review your records to identify any problem areas or patterns. For example, if certain equipment is frequently involved in incidents, it may indicate a need for additional employee training or a machinery upgrade or repair.

You can also get valuable insights into risks by asking employees to provide feedback, report safety concerns, and suggest improvements. Because employees deal with risks firsthand, they may know of problems management isn't aware of.

Finding the right policy for your needs and budget is easy with Insureon. Just fill out our easy online application to receive quotes from trusted providers.

Our expert insurance agents are available to answer any questions and help you find the best, most affordable small business insurance for your needs. Most businesses can get same-day coverage and easily download a certificate of insurance as proof of coverage right away.