Loss control and risk management services can set your insurance agency apart from the pack, giving you a strong competitive edge while delivering real value to your commercial insureds. In fact, surveyed businesses have indicated that these services are what they look for when choosing their insurance partners!
A recent survey of 1,000 senior executives and insurance buyers in the U.S. and UK from across 10 different industry sectors offers insight into what commercial clients are seeking as they plan for a post-pandemic business climate. The bad news? Only 54% believe that insurance is meeting their businesses’ challenges very well. The good news? This offers an opportunity for savvy agents to deliver the loss control and consultative services businesses want and need.
“A new report from specialty insurer Beazley highlights that in addition to financial protection, businesses are looking to their insurance partners to provide them with more risk insight, risk management-related services and flexible coverage that better meets their business’ changing needs.
The top three asks from insurance partners are:
- A deep understanding of risk by sector and size
- Specialist risk advisory services as part of their policy
- Comprehensive, straightforward cover”
See Insurance Journal: Business Insurance Customers’ 3 Top Asks and 5 Top Buying Reasons
What is loss control?
Loss control is a set of management practices designed to prevent losses from occurring, or if they do occur, minimizing the severity of any claims. Loss control is also sometimes referred to as risk mitigation, risk control, or safety. Loss control generally includes the identification of hazards and exposures; implementation of risk reduction programs and best practices to prevent losses or minimize losses if they occur.
Loss control is often associated with workers’ compensation insurance. It is indeed an important discipline in workers’ compensation and other experience-rated policies when costs can all too easily spiral out of control without diligent risk mitigation practices in place. But that’s certainly not the only coverage that can benefit by loss control. Some other examples include:
- Cyber liability – loss control includes policy development, staff training, risk mitigation, and security practices for technology.
- Commercial auto – preventative best practices such as license verification, driver safety training, policies related to distracted driving, impaired driving, and traffic violations.
- Employment Practices Liability –appropriate loss control can ensure a comprehensive policy and handbook is in place and training is completed to provide an affirmative defense if a sexual harassment, discrimination, or hostile work environment claim is made.
- Property/General Liability –loss control inspections can identify areas of concern so proactive steps can be taken to mitigate risk, such as fixing a crack in a stairway, filling a pothole, or replacing antiquated wiring.
Loss control isn’t just related to specific insurance coverages. Industry sectors and niche businesses can also benefit by loss control programs geared to industry-specific exposures.
The insurance agent’s role in loss control
All too often, agents delegate loss control to the insurance company. While Insurers can and do play an important role in loss control, agents become even more valuable to and deepen their relationship with businesses when they play a key, hands-on role in helping them minimize costs and losses. While agents should tap into and use any available resources and tools that the insurer provides such as the NIP Vault, it’s important to take a lead role as the liaison between the insurer and the client using available resources.
- Develop expertise in exposures related to the industries and niche businesses that the agency serves and the coverages that are offered. Train service staff in the value of risk management services like the NIP Vault.
- Teach the client’s executive teams about the importance of their commitment to and role in the partnership to reduce losses; raise their risk awareness about the benefits of prevention.
- Conduct client visits and walk-throughs to understand their operations and become familiar with their practices to identify potential coverage gaps and recommend measures that would reduce losses.
- Watch for and discuss loss trends and exposures. Recommend industry-specific best practices that would mitigate losses.
- Participate in quarterly, annual, or biannual claims reviews.
- Blog about loss control and prevention topics and tips.
- Offer webinars and trainings on loss reduction topics. Invite the participation of insurance loss control providers and industry experts.
Agents can increase their value enormously by moving beyond merely providing coverage to protect against losses into the realm of prevention and risk mitigation. Here are examples of a few successful brokers that have made risk management and loss control an integral part of their insurance agency’s identity and value statements.
Loss control starts at home
Loss control should not only be a key approach to client service, it should also permeate every insurance agency. We all know the saying about the shoemaker’s children going barefoot. Agents should avoid falling into the “do as I say, not as I do” school of loss prevention by practicing what they preach. Making risk reduction and loss control key agency values and important parts of a mission statement can keep this top of mind. Principals should take advantage of their own insurer’s loss control services so that the agency is mitigating any potential exposures. This should start with a focus on a health, safety, and wellness commitment and injury prevention program for agency staff. Principals should also enact policies to guard against cyber exposures, employer liability exposures, and common losses related to errors & omissions, such as failure to properly document. Agencies that imbue their own culture with a risk management ethos can more successfully impart that philosophy to their clients.