Loss control is a series of risk management strategies that insurance companies adopt to minimize the likelihood of policyholders’ claims.The strategies contain elaborate techniques which the enterprises implement to recognize the sources of potential risks to their insurance policies. The plans also contain guidelines on what actions the policyholders need to take to reduce or avert these risks.
Michael Saltzstein– What should lose control strategies include?
Michael Saltzstein is a prominent risk management specialist from America with years of valuable experiencein alternate risk financing, technology solutions, actuarial studies, loss control, occupational safety, crisis leadership, and workers’ compensation. He has a wealth of practical knowledge in fields such as strategic alignment, self-insurance, deductive analysis, coverage evaluation, and growth strategies. He is also a veteran USA Swimming Official and the brainchild behind the implementation of a six-point to eradicate sexual misconduct in the sport.
He explains loss control is a specific risk management strategy that insurance companies adopt for their businesses. The objectives of the plans are to minimize or eradicate the potential of losses likely to incur on their customers’ insurance policies. It requires the insurers to conduct an assessment and offer the policyholders recommendations on how to avert losses on their policies.This acts as an incentive for the policyholders to be risk-averse. In return, they end up paying a lowerpremium on their insurance policies.The insurers normally carry out this risk assessment before offering to provide policyholder coverage.
Insurance companies might insist their policyholders take certain steps to minimize the probability of losses occurring. For instance, a company might take out a fire insurance policy from insurers on its commercial property. Taking this step prevents the likelihood of major fire breaking out and the policyholder placing a claim with the insurers. Insurers might offer the potential policyholder a lower premium if the enterprise installs water sprinkler systems throughout the building. This helps the insurers to save money.
The loss control strategies the insurance companies devise for their policyholders should contain the following:
- Execution of a loss assessment and control system within their policyholders’ businesses
- Allocation of duties and specific responsibilities to subordinates for controlling losses,
- Proper examination of claim data in the event of the losses occurring,
- Audits and on-site inspections,
- Proper accident reporting and thorough investigation,
- Re-assessment of emergency contingency plans.
Benefits of loss control
The benefits of having a customize loss control strategy for both the insurers and policyholders are as follows:
- Minimizes the likely occurrence of losses while safeguarding the policyholders’ assets,
- Reduces the likelihood of interruptions to the policyholders’ business operations,
- Provides a safe workplace environment for the policyholders’ employees, and
- Minimizes the expenditure the insurers incur to process the policyholders’ claims.
Michael Saltzstein sums up by saying loss control strategies help insurers strengthen their cash flow and ensure the protection of their policyholders’ assets.When formulating thesestrategies, the insurersneed to thoroughly examine policyholders’ business and scale of operations. It should encompass the causes of potential risks and ways to mitigate them.This offers a win-win situation for the insurers and the policyholders.