Transcript Objectives - Montana Safety Services Council

Risk Management Program
Presented by: Jeff Reese, ALCM, AU – Liberty Mutual Risk
Control Services
Our risk control service is advisory only. We assume no responsibility for management or control of customer safety activities nor implementation of
recommended corrective measures. The illustrations, instructions and principles contained in the material are general in scope and, to the best of our
knowledge, current at the time of publication. No attempt has been made to interpret any referenced codes, standards, or regulations. Please refer to
the appropriate code-, standard-, or regulation-making authority for interpretation or clarification. Only your policy or contract can give actual terms,
conditions and exclusions.
Objectives
Definitions /
Concepts
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RM Identification
RM Analysis
RM –
Treatment
RM –
Monitor
Results
2
Definition of Risk
Uncertainty in regard to the
positive or negative outcome of
potential future events.
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Types of Risk
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Objectives
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Definition of Risk Management
Uncertainty in regard to the positive or negative
outcome of potential future events.
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Risk Manager – Should have a good understanding of
Insurance Coverage
Property
Liability
Auto
Work Comp
Flood
Crime
Builders Risk
Business Income
Inland Marine
Employment Practices
Employers Liability
Liquor Liability
Errors and Omissions
Pollution
Garage Keepers / Fiduciary
Umbrella
Key Employee
Business Continuation
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Commercial Package Policy
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Insurance Basics
 Insurance companies add “rate multipliers” to
pure loss rates based on:
– Exposures & Controls (Subjective)
• Hiring Practices, Management Commitment, Safety Program,
Cooperation, Equipment Maintenance, Employee Training,
Experience, Turnover, Type of Projects, etc.
– The employer’s historical record of claims and
safety performance (Objective)
• Loss Ratio, Frequency Ratio, Experience Modification, Etc.
• OSHA Violations, FMCSA SMS, Claims Records, etc.
– Loss Ratio = Paid Losses / Premium
– Frequency Ratio = # Claims / (Premium/1000)
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Experience Modification – Work Comp
 Performance measure with direct impact.
Code
Payroll
EL
EPL
– NCCI
– Based on employee classifications and not business
classifications
– Statistical loss rate per $100 of payroll
– Measures your expected losses for that year as a
baseline average.
– Primary vs. Excess – Frequency to Severity
– Uses the oldest 3 of the past 4 years
– Medical Only – deduct 70%
– Reserves Included
1.2
Exp. Mod.
1
0.8
0.78
0.67
0.8
0.8
2008 2009
2010
0.74 0.78
0.9
1.01 1.04
0.6
0.4
0.2
0
2005 2006
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2007
2011
2012
2013
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The Experience Modification
NCCI Experience Rating Plan
Booklet
 https://www.ncci.com/documents/abc_Exp_Ratin
g.pdf
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Days Off Grace Period for Work Comp
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OSHA - Incident Rate
www.bls.gov/iif/osheval.htm
OSHA Violations and Fines
http://www.osha.gov/pls/imis/establishment.html
FMCSA CSA – SMS Results
http://csa.fmcsa.dot.gov/default.aspx
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But isn’t that why
we have
•
•
insurance?
•
Indirect Costs
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Injured Employee Time Off
Other Employees’ Time
Supervisor’s Time
Training A Replacement Worker
Quality and Quantity of New Employee’ Work
Efficiencies
Morale
Overtime Pay
Equipment Repair / Replace/ Devalued
Shut Down of Assembly Line
Rental Expenses
Indirect Cost
Clean Up
Multiplier
Overhead Continues
Product Damage
4.5
5
Raw Material Damage
4
Bad Press / Goodwill
3
1.6
Compromised Deadlines
1.2
2
Lawsuits & Court Time
Fines & Deductibles
1
Dropped by Carrier
0
0 to
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3 to
5 to
1.1
10+
Resources / References
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Comparative
Negligence
– MT follows
the 51% rule
which is
Modified
Comparative
Fault – If the
plaintiff is
50% or less
at fault they
recover
based on
that %. If
they are
51% or more
at fault then
they don’t
recover
anything.
So if they
are 10% at
fault they
recover 90%14
Punitive Damages Insurability
Ex. Employers Liability
Not allowed
Insurable
Allowed, but not insurable
Insurability is questionable
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Sources of Some Key Consensus Standards
• Among the more commonly used standards include– ANSI (American National Standards Institute)
• Ex. OSHA references ANSI Z87.1 for eye and face protection
• Ex. Safety Yellow ANSI Z535.1 “most visually detectable”
–
–
–
–
–
–
–
NFPA (National Fire Protection Association)
ASTM (American Society for Testing and Materials)
ASME (American Society of Mechanical Engineers)
ISO (International Organization of Standards)
IEEE (Institute of Electrical & Electronics Engineers)
UL (Underwriters Laboratory)
SAE (Society of Automotive Engineers)
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