As part of our Relationship Enhancement Program, our Business Development and Loss Control Representatives have been carefully reviewing our customers’ premises and operations to identify any potential areas of risk, ways to improve safety, and prevent future losses. Due to this closer look, there has been a significant increase in the number of recommendations we have issued to our insureds.
Many of our customers are already familiar with the recommendation process. They may have received a recommendation notice following a visit from a PLM representative. The notice is an itemization of two types of recommendations. Those classified as “Important” are all the suggested solutions. The other is “Imperative” which denotes that a serious injury or loss has a certainty of occurring. It is only a matter of time. All these recommendations are based on the Loss Control Representative’s (LCR) or Business Development Representative’s (BDR) risk management survey of the business and are part of the value-added services we provide to our customers.
When a LCR or BDR performs a survey, the intent is for the benefit of all stakeholders. From an insurer perspective, companies like PLM save money through paying fewer claims and/or reducing the severity (cost) of a claim. From a customer perspective, loss/injury exposures that are identified during surveys save money as well, even after investing in the recommended solutions to reduce or eliminate the exposure. Losses are an indication that a production process is not performing optimally. A loss that is paid through the insurance claims process is but the “tip of the iceberg”. Studies show that uninsured (“indirect”) costs are typically over three times what the insurance coverage will pay (these are commonly referred to as “direct costs”), and include items such as:
- Time lost from work by injured person(s) and/or economic loss to injured person’s family
- Lost time by all staff
- Loss of production (total or loss of efficiency)
- Cost of training replacement staff
- Spoilage – fire, water, chemical, explosives, etc.
- Impact of decreased morale
- Overhead/admin to replace equipment, material, and people
- Legal costs (lawsuits, etc.)
- Regulatory costs (e.g. a loss triggers an OSHA inspection)
- Impact on reputation/brand (in this day of 24/7 news and social media, the impact could be substantial)
Perhaps the greatest economic impact is that a loss negatively impacts your client’s ability to fill their customer orders and provide customer service. A customer who has to go to a competitor for product/service may never come back. Want to know the true costs of injuries? OSHA has put together resources for determining these costs, as well as ROI (return on investment) at https://www.osha.gov/dcsp/products/topics/businesscase/costs.html.
PLM’s LCR/BDR reps note loss exposures such as ignition sources (hot work, electrical, etc.), sawdust accumulation in electrical panels, uneven and cracked sidewalks in front of business, discarded flammable rags, and fleet safety — just to name a few. To some, these suggested recommendations may seem minor and inconvenient. Others, it may seem like a nuisance to have someone enter their business and analyze the way they run their operation. However, we cannot stress enough the importance of these recommendations and how our people are here to help you and your clients.
Risk management is a significant part of PLM’s culture. We want to provide our customers with valuable, industry specific knowledge and resources to help them protect themselves for potential losses and losses that are avoidable. We want to expand this culture of safety out to all of our brokers and insureds. Our loss control staff are individuals with extensive insurance experience and in-depth knowledge of the wood industry. In their careers, they have visited thousands of locations from lumberyards, retail operations, and small woodshops, to sawmills and large wood manufacturing operations.
In addition, being an insurance company specifically for the wood niche for nearly 125 years, we at PLM have gathered an enormous amount of data and resources on the loss factors for this industry. We analyze loss trends year-after-year for our book of business. We evaluate the types of claims we receive and provide solutions on how we can help our customers protect themselves against future claims. We even have monthly large loss meetings where management teams from various departments (underwriting, loss control, business development and claims) take a deeper look into some of the larger losses we have seen on our books. They analyze and evaluate losses from every perspective, whether the coverages in place were adequate, if safety measures and processes were enforced, and what could have been done to prevent the loss.
In the end, the purpose of our recommendations is not to criticize our insured’s business. It is to take the years of expertise and data, and the knowledge of our business development and loss control representatives, to work with our insureds to figure out how to improve the overall safety conditions of their business or to supplement the safety measures they have already taken.
We want you and your clients to take advantage of the resources that PLM provides to bring this culture of safety to their own operations. Risk Improvement consultation visits are a key part of this. Loss Control and BDR representatives can be found by territories at www.plmins.com (under “Locate”). In addition, PLM has a variety of self-serve resources at www.plmins.com/loss-control/. If you can’t find what you’re looking for, please contact us at 800-752-1895 or at custserv@plmins.com.
Uncontrolled loss exposure addressed through the recommendation process not only increases the long-term profitability of businesses (ROI), they save lives!
