If your losses are costing more than 60% of your insurance premium, your commercial insurance company is losing money on your policy and you are NOT a candidate for an alternative risk funding structure.
No matter what your loss ratio is, your company can benefit from a solid Risk Management/Loss Control program. If you’re considering your own self-insured program, it’s imperative.
Risk Management is characterized as pre-event loss prevention. What are the situations in your business that create the risk of loss? It may be an injury to an employee, injury to a client or visitor, or damage to your property. In any business, there’s a chance something can cause an injury. A good risk management program determines what those situations are and establishes a plan for reducing that risk.
Loss Control is characterized as post-event claims management. What procedures does your company have for managing the claims process in the event an accident happens? Useful loss control procedures dictate how people are treated and how expenses are reviewed and paid after the event.
In the insurance business, we evaluate exposure and resolution by line of business. Worker injury is one of the lines of business that can benefit from a well-designed Risk Management/Loss Control program. Owners who want to create their own captive insurance company want to promote healthy work practices and want to protect themselves from the small percentage of employees who would take advantage of them.
These are the main steps to be taken:
- Advise employees on proper dress: shoes, hard hats, safety goggles, back supports, etc.
- Provide safe, reliable equipment for the job
- Establish guidelines for the performance of tasks
- Train employees on the proper performance of their jobs
- Provide clear direction of what to do if an employee is injured
- Make sure the employee is getting the quality medical treatment he/she needs
- Provide clear back-to-work procedures and light duty opportunities
- Evaluate the situation that caused the accident
- Determine that the situation is corrected to prevent future injury
All lines of property and casualty business follow the same basic principles:
- Know what situations present the risk of loss
- Educate clients and employees of the risk
- Maintain vigilance in preventing accidents
- Take measures to provide professional services when accidents happen
- Review the situations that caused the accidents
- Make adjustments to prevent future losses
Many business owners understand that Risk Management/Loss Control plans reduce costs in property and casualty lines, but they don’t realize programs can be established to prevent losses for employee medical exposures as well. There a number of conditions that cause the majority of health issues and that can be mitigated by healthier life choices.
They are as follows:
When employers implement wellness programs, perform simple biometric tests to determine at-risk employees, and offer healthier options, such as gym memberships, standing desks, smoking cessation programs and nutritional counseling, employees are not only more productive and present on the job, but health insurance costs are reduced.
At Venture Captive Management, we work with a number of business partners who provide quality Risk Management/Loss Control programs that can be incorporated in your alternative risk funding structure no matter what line of business concerns you.