EHS and Loss Control: Forging a Partnership

Having worked in both corporate safety and insurance loss control, I am amazed at the disconnect that occurs between these synergistic disciplines. It’s certainly a waste when you consider that they have much to gain by working and learning from each other.

The job description for an insurance Loss Control Representative is highly compatible with that of a corporate EHS professional. If you want to generate an interesting discussion, just put these two in a room together and watch the chemistry develop. It’s a win-win scenario for all parties. If an insurance carrier really wants to make a huge impact for a client, they will invest ample amounts of time helping their client’s EHS professional to make a better ROI case.

ROI Help:

For today’s EHS professional, it’s not all about addressing physical hazards or meeting regulatory compliance. It’s about taking a more proactive approach to health and safety; focusing more on leading indicators and less on lagging indicators (e.g. your loss runs) to drive annual action plans and efforts. One of their major hurdles is convincing senior leadership and executives to make a significant investment in their health and safety programs. This is partly rooted in the lack of political skills, but it is mostly because of the lack the tangible data ($$$) to make a successful ROI case.

For any insurance carrier and their army of Loss Control professionals, the best “value added” service you can provide is to provide guidance and education to the EHS professional so they can better make the ROI case. Although they do not rely solely on loss runs, they still need to be cognizant of what has happened and educated on the terms “medical”, “indemnity”, “LAE” and “reserves”.

Advice for Loss Control Representatives

Yes, it’s important to visit an insured to conduct a loss control survey, review loss runs and conduct a safety meeting or two. But don’t stop there. Add real value by teaching your client how to more effectively demonstrate health and safety program ROI. A few reminders:

  • Never use the underwriting term “acceptable losses” or “shock losses”. No loss or injury is acceptable to an employer or EHS professional, and every loss is definitely a shock.
  • Explain how a workers’ compensation experience modification rating affects costs.
  • When reviewing loss runs, highlight associated claim expenditures.
  • During Risk Control surveys, inquire about observation and near miss reporting. If they have these in place, you will know you are working with a more proactive insured. Understand how they are reported and used in the organization Observation and near miss metrics can definitely help the Loss Control Representative understand the risk and exposures better.
  • Educate the insured about underwriting requirements. You will find that EHS professional are more than willing to account for these in their health and safety programs.
  • Don’t simply give the insured a to-do list. They will resent it. Use a consultative approach. Explain your recommendations and link them to best practices, underwriting requirements or regulatory compliance.
  • Be cognizant of frequency and severity. Ask your insureds to define these terms. If they cannot answer this question, this is an opportunity for you to educate them. A better educated insured can help them prioritize action plans.
  • LISTEN & LEARN when meeting with EHS professionals. They can help you keep abreast of emerging trends and identify possible “hidden” exposures. What you learn from one type of business could help your entire book of similar risks.

Advice for EHS Professionals

Aside from your internal colleagues, the insurance carrier’s loss control consultant is your best resource. They provide a bridge to the insurance industry and knowledge to help you make the case for an investment in safety and health programs.

  • Actively participate in the loss control survey and be prepared to explain or elaborate on what the Loss Control Representative is seeing
  • Be part of the insurance renewal process. Shedding light on your safety and health programs helps position your organization for more competitive premiums (and decreased operational costs).
  • Study the carrier’s loss runs to understand associated claim costs. If you have questions, ask.
  • Develop a partnership with your Loss Control Representative. Invite them to attend or speak at safety meetings and review your health and safety programs. This pays off at policy renewal time because underwriters heavily rely on the information provided by loss control departments. And, they want to be assured that your organization is committed to continuously improving its risk management and safety performance.
  • Share metrics to demonstrate incident control efforts and show that at your organization takes safety and health seriously.
  • Become a trusted adviser and mentor. Loss control consultants thrive on learning new things in the field and like to leverage that knowledge to be more effective in their jobs.

EHS and Loss Control professionals have the same mission: to keep employees safe and protect the operational integrity of an organization. When steps are taken to open lines of communication between these complementary roles, the results can be astounding.

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