Unexpected events such as a fire or employee injury can happen at any time.
But what surprises many people is how often these events occur. A claims analysis from The Hartford found that 40% of businesses will incur a property or liability loss within the next 10 years. Thefts, fires, vehicle accidents, injuries, product liability, and reputational harm are among the most common types of insurance claims.
Fortunately, there are steps you can take to prevent these kinds of situations from happening in the first place. By implementing proven loss control strategies, research organizations can manage risk, avoid accidents and injuries, and even reduce claims and insurance premiums.
Before we get to some of the ways loss controls can save you money, let's first define a loss, as well as a loss control.
What is a loss?
In the insurance world, a loss is an injury or damage sustained that is covered under your insurance policy. Losses can include property damage, personnel loss, lost time, and legal liability that negatively affects your business or employees. When you experience a covered loss, you file a claim with the insurance company and they pay the claim under the terms of your policy.
What is loss control?
In simple terms, loss control is a method of mitigating hazards that could lead to a loss. This includes risks from fire and crime to chemical spills, slips and falls, auto accidents, cyber threats, and legal issues.
Loss controls include proactive measures like policies, procedures, training, and tools that help reduce the frequency and severity of losses. Loss controls can also include data collection, organization, and visualization software that helps you spot trends or potential issues before they arise.
Loss control, or loss prevention, is an important part of keeping any effective risk management program successful and sustainable.
Now that we have definitions, let's look at a few specific examples of losses and loss controls.
Examples of losses & loss controls
You’re probably already familiar with the concept of loss control, even if you haven’t referred to it by that name.
Imagine there’s been a burglary in your neighborhood, so you decide to install a monitored security system in your home. Because your new alarm system protects your family and property from damage (loss), it can be thought of as a loss control.
One example of a loss that could occur in a research organization is a chemical spill or unintended reaction that triggers a Hazmat response. A good loss control for this situation would be a system that tells first responders exactly what hazards are present in a space, because it helps them to get in and address the issues faster to limit the damage.
Damage to a piece of capital equipment is another common type of loss. Training users on proper techniques, performing regular equipment certifications, and tracking maintenance schedules are all examples of loss controls that can help protect expensive laboratory equipment.
Finally, slip and fall injuries are a major risk. Losses related to slips and falls can range from minor wounds requiring medical attention to life-threatening injuries, lawsuits, and even death. And of course, these are common injuries and the conditions that lead to them are manifold. Keeping walkways clear of hazards, wearing slip-resistant footwear, and routinely inspecting workspaces for hazards are simple controls that can reduce the likelihood of slips and falls.
Why are loss controls important?
As we said before, loss controls help minimize the potential for injuries, property damage, and other liabilities. By reducing the frequency and severity of covered losses, loss controls (and the EHS professionals who implement them) save insurance companies money. In turn, insurance companies reward policyholders with lower insurance premiums. It’s a win-win.
For example, many insurance companies offer a substantial discount on home insurance premiums for installing a monitored security system because it reduces the chances, you’ll need to file a theft claim in the future.
Similarly, implementing safety training and laboratory safety software in your organization can result in significant savings on workers’ compensation and liability insurance.
Without loss controls, claims may occur more often than expected, or with greater severity. In this case, your insurance company may even raise your premiums or decide not to renew your policy. If you’re self-insured, then you are bearing the full brunt of the cost of a loss, which is often even more painful and expensive than dealing with an insurer.
- Loss control is an insurance-approved strategy that can benefit every organization, regardless of size or industry.
- Implementing loss controls can save your organization money by reducing your claims and insurance premiums.
- Even if you are self-insured, the costs of a loss fall solely on your organization, and loss controls can have an even greater impact.
- Effective loss control starts with evaluating your risks and understanding the likelihood those events will occur. Once you know your risks, you can work to identify controls to manage them proactively.
Did you know that BioRAFT is now a Certified Loss Control? Our customers are using our software to save money and protect their organization’s revenue - learn more by clicking here.