If you start a new (or renew) an insurance policy, chances are the insurance company may have its safety staff (called “Loss Control” or Risk Engineers or Risk Managers) contact you by phone or stop over in person. The purpose of their contact is to conduct a safety survey of your operations. A recent major loss or a series of claims also may trigger a visit from Loss Control staff or subcontractor safety specialists.
Or you might have noticed a major loss at a competitor’s business and can ask for a Loss Control safety survey. There is no charge for this service. It is included in the cost of the insurance premium, and may help reduce the premium in the future.
The Loss Control Engineer will ask questions and may take measurements and photographs, and discuss his or her findings with you and perhaps give you a list of recommendations or “recs.”
Recommendations are suggestions to a business or organization to take specific actions, issued with the intention of future accident prevention. Perhaps regulations have changes and now your operations are out of compliance. Perhaps safety creep or “drift” has set in and staff were observed taking shortcuts like jumping off trucks or the decks of trailers or not using mandatory equipment or safety practices. Perhaps some practices are out of compliance and need to be upgraded.
Recommendations are sometimes classified as:
Critical Recommendations relate to conditions or practices creating a high potential for loss of life, severe bodily injury, destructive loss of property or significant financial loss. These are things that need to be corrected. Examples might include not having a fire extinguisher where needed, or not having a no-cell-phone-use-while-driving policy.
Important Recommendations relate to a conditions or practice that needs improvement to establish better exposure controls or improve conditions to reduce the probability and/or severity of loss. These are things that should be corrected. An example is road-testing all vehicle drivers, even if regulations say a CDL driver does not have to be road tested.
Advisory Recommendations are defined as administrative type recommendations that could be considered “best practices.” An example would be providing defensive driver training for non-commercial drivers on staff, as office personnel.
Recommendations are made specific to the operational conditions observed at your organization or business.
Status of a Recommendation
The Loss Control department may assigns a status to each recommendation after reviewing your actions or proposed actions. Here is how the Chemical and Safety Board assigns status to its safety recommendations:
Open – Awaiting Response – The recipient has not submitted a substantive response, or the Loss Control evaluation staff of a response is pending.
Open – Acceptable Response – Response by recipient indicates a planned action that would satisfy the objective of the recommendation when implemented, including a written timetable for completion.
Open – Unacceptable Response/No Response Received – A response to the recommendation has not been received in a specified or reasonable time of issuance, or the recipient responds by expressing disagreement with the need outlined in the recommendation.
Closed – Acceptable Action – The recipient has successfully completed action on the recommendation. The action taken was as specified in the original recommendation.
Closed – Acceptable Alternative Action – The recipient has successfully completed action on the recommendation. The action taken was approved by Loss Control as an acceptable alternative to the original recommendation language that meets the objectives envisioned by Loss Control.
Closed – Exceeds Recommended Action – Action on the recommendation meets and surpasses the objectives envisioned by Loss Control, in a manner that enhances the extent of reduction of future risk.
Closed – Unacceptable Action/No Response Received – A response to the recommendation has not been received in a specified or reasonable time of issuance, or the recipient response by expressing disagreement with the recommendation or offers an alternative response that Loss Control does not view as an acceptable alternative. In addition, Loss Control concludes that further dialogue will not persuade the recipient to act.
Closed – No Longer Applicable – Due to subsequent events, the recommended action no longer applies (e.g., the equipment, plant or facility was destroyed and not rebuilt, or the company went out of business).
Closed – Reconsidered/Superseded – The recipient rejects the recommendation based on a rationale with which Loss Control concurs. Reasons for this status may include, for example, situations when later facts indicate that the conclusions of Loss Control should be modified, that concerns expressed in the recommendation were addressed prior to the incident, when a recommendation should have been directed to a different recipient, or when a recommendation is superseded by a new, more appropriate recommendation.
The point here is that Loss Control may follow-up with additional contacts by phone or in-person to close out any recommendations. Once a recommendation is made, the recipient needs to followup on it in some manner. It just doesn’t go away.
Action is key. Action should be taken on all Loss Control recommendations. If a recommendation will take some time to implement, will not work out, or is too costly for the benefits received, that conclusion should be brought up to the attention of your Insurance Loss Control representatives. Keep Loss Control informed of the status of all recommendations. Good Loss Control will ultimately lower your insurance premium.