The term Loss Control is commonly used in the insurance industry, as a means to describe ‘risk management’ when it comes to preventing claims from occurring. The goal is to reduce the risk for the insurance carrier offering the coverage and for the business that holds the workers' compensation policy. By finding potential risks and mitigating them as early as possible, it can help prevent injuries in the workplace and lower the amount of claims because it helps to make the workplace safer.
You will find that many workers’ compensation insurance companies hire third-party vendors who specialize in job site inspections. They can come to the workplace and conduct an inspection to locate any potential risks, and they can discuss with the employer these safety risks. Additionally, these loss control specialists can provide employers with recommendations regarding what changes may need to be made to increase the safety levels and decrease the risk.
Insurance companies may require that businesses take certain actions to help reduce risk after the loss control inspection has been conducted.
For example, they may require that a commercial property add a new sprinkler system or alarm system.
They might require that other safety measures are implemented. Typically, they are going to look for potential issues that could cause harm to workers that could end up causing workers’ compensation claims in the future. They can provide the business with a list of best practices to follow, which should also help to reduce claims in the future.
Site visits and surveys from loss control specialists are often required by insurance companies as a part of your workers’ compensation policy. Failure to comply with the inspection and to make necessary changes could result in your policy getting canceled. This would mean finding another company for workers’ compensation coverage.
Of course, this new company is likely to require a loss control inspection, as well. Those who are happy with their current insurer should strive to make any changes discussed with the inspector.
As mentioned, the loss control specialists are typically hired as a third party by the insurance companies. Some businesses make the mistake of ignoring phone calls and emails from inspectors because they don’t realize they are working with the insurance company. Please don't do that!
This is a huge mistake, as it will make it appear to your insurance company that you aren’t willing to go through the inspection and make changes. Remember, their recommendations are not usually a suggestion. They need to be adhered to if you hope to keep your current workers’ compensation policy. If you ignore the calls and emails, the inspector will tell the insurance company that you're not compiling and your policy will probably be canceled.
Although some businesses might feel that insurance companies are overstepping their bounds when it comes to loss control inspections, it’s important to remember that it benefits everyone. Business owners don’t want their workers injured. The insurance companies don’t want to pay out claims if there are preventable measures that can be taken instead.
In some instances, insurance companies might even offer incentives to businesses that take certain actions to reduce risk. Other times, when a business is deemed to be high-risk for some reason and they don’t remedy the issues, insurance companies could increase the cost of the policy, or not offer a policy at all.
Of course, you will also find that loss control inspections end up being good for the employees, as well. They can help to ensure the company is taking action to make their workplace safer. This cuts down on injuries, time out of work, and claims. Everyone will benefit.
Many companies offer loss control services. This means that the details of what happens during the inspection can vary. However, there tends to be some common ground when it comes to things the inspectors look for during their survey.
Once they have completed their survey or inspection, the loss control specialist will typically have a list of suggestions on how to make changes. This might include new rules on personal safety gear, attire for the job, changing the location of certain items or machines, etc.
Again, different companies will have different methods when conducting these surveys. They are helpful but remember that they are working for the insurance company, and they will report what they find. Be ready to work with the insurance company to help get your workplace up to par when it comes to safety. This will help keep the insurance company happy and your workers safe and can remain on the job rather than recuperating from an injury.
Something else to keep in mind is that not every policy will receive a call or a visit from a loss control inspector. It will often depend on the insurance company, as well as the type of business you operate.
However, any business in the construction industry, and related industries, should expect to have an inspection soon after a new policy is purchased. The insurance company wants to make sure the site is safe and that they are not at undue risk.
If you have a workers compensation insurance policy with Kickstand, and you have questions regarding loss control or an inspection, reach out! We’re happy to help. Call or text 866-338-8823.
Don’t have a workers’ comp policy yet? Find out what it would cost by starting your quote now!
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.