loss prevention, risk management and selling safety michael liebowitz risk and insurance management...
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Loss Prevention, Risk Management and Selling Safety
Michael Liebowitz
Risk and Insurance Management Society, Inc.
OSHA Compliance Assistance Conference
September 24, 2002
Who is RIMS?
Largest association for risk managers worldwide
Founded in 19508,000 risk management professionals are
members4,000 member companies – industrial, service,
non-profit, charitable, government entities
RIMS Continued. . .
RIMS member companies:– 84% of Fortune 500– 71% of Fortune 1000
RIMS Annual Conference & Exhibition – Chicago, 2003
www.rims.org Risk Management magazine
RIMS and OSHA
Alliance signed April 2002 Improve perception of
OSHA among RIMS member companies
Exchange technical information and best practices
Demonstrate cost benefits and business value of safety and health management systems
Risk management is the umbrella under which loss
prevention and safety programs function
in a company.
Source: "Techniques of Risk Management," 1995.
How is Risk Management Used in the Workplace?
Companies face different categories of risk:– Asset risk– Market risk– Financial risk– Environmental risk
• Statutes• Regulations• Legal liability
Workplace Continued. . .Risk managers need to cope with all elements of riskLink between organizational
goals/strategies and the risk management function
Why is Risk Management Important?
Risk managers protect and preserve physical, financial, and human resources
Risk managers are not just buyers of insurance
Worker safety is a risk manager’s foremost concern
Loss prevention is the driving force of industry
The primary function of a risk manager is to minimize any harm to his/her employer’s
holdings, including and most importantly, the employees.
Expense is the Issue !!
Management is concerned about the bottom line
Safety programs usually fall off the radar screen
OSHA and Regulatory Liability
OSHA General Duty Clause provides for remedial action against employers that unreasonably risk the safety of their employees
Business community questions necessity of regulations in areas like ergonomic injuries because of the existence of the General Duty Clause
Selling Safety in Healthcare: A Challenge But Also
An OpportunityEvolving industry specific standardsNon-industry specific (difficult to implement)Government vs. government issuesIndustry in a financial downturnLow employee morale Staff shortages
Selling Safety in all Industries
Creates a safer environmentIncreases employee moralIncreases productivityLowers operational costs
– workers’ compensation– group health benefits– other related insurance programs
Risk Management Safety
Reduces LossesMaintains or improves worker
productivityProtects the bottom line
Elements of a Risk Management-Based
Safety Program
Define the exposuresCollect the dataResearch the appropriate local, state or federal
regulationsDevelop the programEmpower the line staff and line managers
Elements Continued. . .
Inform managementEducate the employeesMeasure the resultsModify the program if necessary
Source: "Techniques of Risk Management," 1995.
Reducing loss potential reduces the risk of loss. When loss potential is reduced, losses become more predictable and manageable.
Source: "Techniques of Risk Management," 1995.
Loss Prevention
Benefits– Reduced costs
• Direct loss• Indirect loss
– More efficient use of resources
– Morale and loyalty of employees
Costs– Capital expenditures– Program expense– Administrative
expense– Maintenance cost– Disruption of
operations– Resource allocation
LOSS PREVENTION vs. LOSS REDUCTION
Are Losses Predictable?
Predicting Losses
Collect the dataSpeak to staffInform line managementBuild support
Source: OSHA Trade News Release, November 12, 1999.
Employer Self-Audits
85 percent of employers conduct voluntary self-audits of safety and health
90 percent of employers conducted an inspection of their workplace in the last year
Why do they do it?– To reduce illness and injury rates– To comply with OSHA regulations– To do the right thing
Source: OSHA Trade News Release, November 12, 1999.
Benefits of Voluntary Self-Audits
Non-punitiveProvide employers with opportunity to fix conditions
that violate OSHA regulations before an OSHA inspection
Reduce costs associated with injuries:– Workers’ compensation
– Medical payments
– Sick leave
– Lost productivity
Questions?