Loss prevention

Reprinted from Rescue Magazine 7/1/13

I usually avoid the use of clichés, but this one is just too obvious to ignore: “An ounce of prevention is worth a pound of cure.” Ben Franklin was certainly right, though I doubt he imagined he would ever be quoted in Rescue Magazine 250 years later! However, when it comes to preventing losses before they happen, he was extremely sage. The amount of money that is lost on insured claims may be huge. Additionally, they are typically a time waster, exacerbated by the work and energy that must be expended to even file a claim. Such possible expenses to the ministry include coordinating meetings with adjusters, working with auto-body repair shops, retaining construction contractors, loss of work time while in court, debris cleanup, loss of staff morale, and future increases in insurance premiums, just to name a few. Certainly, an insured loss is better than one that is not insured, but even an insured loss causes enormous interruption.

Accordingly, preventing losses from ever occurring in the first place is better than a great insurance contract. So how does one go about this process of loss prevention? Basically, it involves 6 steps:

  1. Identify and empower a responsible person or committee to investigate loss exposures and make recommendations.
  2. Identify the sources of possible loss exposures. There are numerous resources to which you may turn. They include:
    • The Internet – which lists thousands of sites addressing some facet of loss prevention encompassing quite general to the very specific, i.e. how to prevent bedbug infestation.
    • OSHA – The Occupational Safety and Health Administration offers hundreds of free resources. Visit www.OSHA.gov.
    • Insurance company publications – most of these resources are free of charge and are sent to you by just asking. After all, it is in the insurance company’s best interest to help you avoid losses as well.
  3. Establish a priority of which loss exposures represent the most probable and serious threats to the mission’s operations and continuity.
  4. With the loss prevention resources correlated to the identified threats, set about devising a written game plan for addressing the “what ifs”. This exercise will dramatically pay off over the years.
  5. Review the plan with key personnel so that those affected by the plan are informed and willing participants.
  6. Implement, monitor and regularly update the plan, since situations and conditions change. An outdated plan may be worse than no plan at all, so stay diligent.

We all hate interruptions, and Ben Franklin was considered wise because he recognized that a worse disruption comes about when avoidable situations are not pre-addressed. Let us learn from his sage counsel.

Brian H. Merriam, CPCU, ARM, AAI, President

Brian H. Merriam, CPCU, ARM, AAI, President

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Brian H. Merriam, CPCU, ARM, AAI, President

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