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Loss Run Use and Accident Reporting Practices
Can Improve Safety Committee Effectiveness
By Stephen B. Paulin, CIC, Senior Vice President
SullivanCurtisMonroe Insurance Brokers, a Member of RiskProNet Intl.
At most middle-market companies in the manufacturing and wholesale/ distribution
sectors, the safety committee is composed of executives, mid-level managers,
supervisors and line employees. Their duties may include a wide range
of activities -- from monthly safety meetings to reviewing claims, updating
the Injury and Illness Prevention Program, conducting plant inspections
and overseeing new-hire safety orientation and ongoing safety training.
While these are not the primary responsibilities of the committee members,
they are important to the organization and should be conducted as efficiently
and effectively as possible.
Monitoring the loss analysis would seem a relatively small function of
the safety committee, but if done effectively, it can have a great impact
on improving or maintaining a quality safety program. Too often, I have
seen safety committees rely on outdated, plain-vanilla loss runs because
it takes the carrier too long to get out the reports, or because the committee
meets too late in the month. There are also wide margins for error and
ambiguity in these reports because employers are frequently not specific
enough when reporting claims. They can also be questionable because the
insurance company classified claims in generic categories such as "contusion
to the hand" or "fall." This ignores the seriousness of
the injury: Is it a broken hand or a sprain? Is it a fall on the same
level as a result of tripping, or is it a fall from a height?
At best, the off-the-shelf loss runs provided by insurance companies give
information on the total incurred dollars for all claims during a time
period with an indication of the claim type. To be effective, the loss
run should be relied upon as a tool to help the safety committee with
its analysis. With only the standard format of "name, rank and serial
number" to guide the committee, it's difficult to get the specific
information that will be useful for planning changes in order to avoid
future occurrences of the same problems.
The loss run is much like a balance sheet and financial statement in that
it presents historical information that can be used for monitoring results,
as well as for planning and forecasting. The more specific the information
contained, the more specific the analysis that can be undertaken. For
example, we know that a 20% annual increase in sales over three years
is a good thing. But, if we know that 90% of that increase comes from
a specific product line, then the sales are put into a different perspective.
This information enables us to better forecast for the future.
Similarly, if a loss run shows five back strains, then you know there
is a problem with the activity that is causing this injury. However, it
is more meaningful if it shows that four of the five injuries occurred
at a particular location, in a certain department, during a specific shift
and were suffered while the injured parties were lifting a load in excess
of 75 pounds. This gives the safety committee the necessary information
to accurately evaluate a trend and take the necessary action to correct
it.
This may sound elementary, but safety committees spend much unnecessary
time and effort trying to find out the specifics because they are only
given very general information. Instead of having to comb through reports
and data to arrive at an indication of the root cause, time could be better
used to problem solve. In the absence of the insurance companies' ability
to break down claims according to the specifics mentioned above, I have
assisted clients for years by supplementing their rudimentary loss runs
with graphics depicting the pertinent information suited to meet their
needs. This is an important broker service, especially when workers' compensation
rates are rising so dramatically.
Business owners experiencing an increase in workers' compensation coverage
costs by 40+% in successive years are now paying more attention to safety
issues. Often, the first questions asked are: "Who is responsible
for overseeing safety?" "What type of claim is occurring most
frequently?" and "What is the course of action to remedy the
situation?" A series of simple color bar and pie charts provide an
easy-to-understand representation of the location and type of claims occurring
in the organization.
A bar graph that trends the number of claims and total dollars incurred
over a five-year period seems to work best for the executive overview.
A quick glance gives the essential information on whether claims are heading
in the right direction. It does not require pouring over loss runs in
order to find this out, making it an effective time-management tool.
A similar format with more detailed information including location, shift
and department is useful for the safety committee. Supplement this with
a pie chart showing the type and nature of injuries and the safety committee
can zero in on claim trends and take the appropriate loss prevention and
control initiatives.
I'd also like to note the importance of supervisor accident investigation
reports. After an injury occurs, it is essential to get first-hand information
on the circumstances. An accident investigation report provides the what,
how and why of the incident. Much like gathering information at a crime
scene when the clues are fresh, this report should be completed immediately.
The supervisor responsible for safety in his or her area is the best person
to conduct this report. The assistance of a safety committee member will
ensure a fair and accurate accounting. The most accurate information is
often obtained through a first-hand interview with the injured worker
and fellow employees who witnessed the incident. An inspection of the
scene should include a review of any machinery involved and relevant housekeeping
issues as well as an assessment of overall conditions.
This feedback is vital in order for the safety committee to do a thorough
evaluation. Based on this information, claim reports can be as complete
as possible and coded properly for future accident trending. Also, recommendations
can be made to avoid a similar occurrence in the future and to help other
departments with accident prevention efforts.
By using loss runs and comprehensive accident reports to monitor an organization's
claims and compile essential information in an easy-to-understand format,
you'll reap long-term dividends in reduced claims and workers' compensation
expenses.
SullivanCurtisMonroe is an insurance brokerage based in Irvine, California,
specializing in risk management. It is a member of RiskProNet International,
a network of 28 premier regional brokers.
last updated:
May 16, 2001
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Diversified Risk Insurance Brokers
phone: 510/547-3203 fax: 510/547-5648
5900 Christie Ave
Emeryville, California 94608
License # 0529776
copyright © 2001
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