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Loss Control
Loss Control is typically defined as the process of applying management practices, knowledge, and technical skills to develop, enhance, and implement risk avoidance, loss prevention, and loss reduction. The process deals with the loss potential and losses involved in undesired events resulting from nonspeculative risks.
That's a lot of words - which don't really define Loss Control in the real world. To really understand, let's start by considering two other terms:
Risk - the chance of injury, damage, or loss
Safety - freedom from damage, danger, or injury
The process of Loss Control involves the identification of risk, with the goal of safety. All adults know that knives have sharp edges designed to cut something. As responsible adults we do not permit children to use sharp knives as playthings - we are practicing Loss Control. We do the same thing when we store household chemicals where children and pets cannot access them. As drivers we step on the brake pedal in our car when we see brake lights ahead of us. These examples demonstrate real world loss control.
So, the goal is safety. The key to reaching the goal is the steps that are taken to identify risk and guard against it. In both business and personal pursuits, each of us identifies risks and makes decisions as to how we deal with them. The potential for a fire loss is usually handled in two ways - loss prevention through control of ignition sources and combustible materials, and transfer of risk of major dollar loss through property insurance. Each of us accepts certain levels of risk as part of our life. We use power tools for production of goods and for household improvements and hobbies. In both cases we use the tools with the appropriate guards in place and wear things like safety glasses and gloves. Again, real world, real loss control.
The Loss Control Process
1. Identify the risk - fire, property damage, personal injury, theft/burglary etc. (Two examples... newspapers stacked by the fireplace, and you are the third owner of a building which still has the original locks.)
2. Decide what the potential for loss is and the time frame in which it might occur. (Changing a drill bit while the chuck is turning = immediate possibility of personal injury.)
3. Decide what you can do about the risk. (Move the newspapers; put in new locks; unplug the drill.)
4. Look to risk avoidance (recycle the newspapers) and risk transfer (increase your insurance coverage).
5. Implement your decision.
One last note about Loss Control. Depending on how it is approached, and the goals that are selected, it can have a very positive effect on employee morale; or you may end up with no employee support at all. And, of course, without employee support most "risk avoidance" strategies won't work.
We hope you'll take advantage of our years of experience! Contact us now at (262) 207-1999 and ask about loss control to learn more.
