Developing an Effective Loss Control Program

In today's business environment, insurance costs play a large part in how your balance sheet looks at the end of each year. Certainly, claims frequency and severity can make a huge difference in your annual renewal premiums. Businesses that experience a high number of claims and/or multiple severe claims, experience significant increases in workers’ compensation insurance which often cascades to other policies. Being proactive and taking a comprehensive, preventive approach to health and safety, will allow companies to gain some control on rising insurance premiums.

Preventing and Managing Losses


The organization must identify loss trends in the workplace and implement comprehensive solutions that will result in a reduction of injuries and their associated cost while at the same time, improving company productivity.  A safe workplace is a more efficient workplace. 

Safety Program

An option in taking control is to develop an outline to introduce and conduct a safety and loss control program for the organization. This loss control outline will reveal the company management's commitment to workplace safety to employees. The outline should contain a written safety policy statement, the rules and regulations for the company's employees to follow, and a statement that is signed by all employees.  The most important initial step is management’s total support.


After the safety program's rules and regulations have been memorialized, all company employees must be instructed in compliance. The most common cause of workplace injuries is the lack of training. Training must be a major part of the organization's safety and loss control program. Depending on the size of the organization, one or more supervisors or managers should be appointed as a Safety Program Manager and be held accountable for training all current employees and future new hires. Review sessions are recommended during the year to make certain that employees understand and are abiding by the safety programs rules and regulations.

Eliminate High-Risk Behavior 

Since high-risk behavior is typically responsible for many workplace accidents, managing high-risk behavior is crucial to reducing workplace accidents. Statistics indicate that employees who are most frequently injured, are typically high-risk employees because of their attitude and behavior in the workplace. They are the employees who often take short cuts and pay little attention to safety rules and regulations. These employees should be identified and held accountable for any known safety rule violations and forced to go through a re-training process before being left unsupervised.

Return to Work Programs (RTW)

Injured or partially disabled employees can be brought back to work in their current position with modifications, or placed in an alternate position at the job site or a non-for profit organization, until they are able to return to full productivity. RTW programs provide full or part-time work at full or partial wages, with the workers compensation insurance company making up any difference between the employee’s pre-injury wage and the pay earned while assigned to the transitional work assignment.

Safety Incentives 

Many companies use safety incentives to reduce and control workers’ compensation losses. By awarding money, recognition, or merchandise, the company can motivate employees to become safety conscious which results in a reduction of accidents and the resulting injuries. When an employee understands that he or she can receive recognition, a raise, or even advancement, they are motivated to abide by the safety rules and encourage their peers to do so as well. The company should, however, be careful about motivational awards and look for employees who may under-report accidents or hide injuries to obtain the incentive.


An increased number of claims can result in a ten to twenty percent increase in insurance premiums; company management must be serious about loss control and look to SAFETY AND ENGINEERING PROFESSIONALS for assistance in implementing a comprehensive HEALTH AND SAFETY program. Taking a proactive approach to Employee Health & Safety, and interacting with claims professionals about the timing, resolution of claims is the BIG step in taking control of your workers’ compensation premiums.

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Patriot Underwriters, Inc. (PUI) is a national program administrator. We develop innovative solutions that help our clients contain costs and minimize risk through customized insurance products and services.

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