SAFM 550 #5. Loss Control

SAFM 550 Accident Costs Iceberg l For every $1 in accident costs paid by insurance l There are $6-$9 paid by the company l For every $1 in accident costs paid by insurance l There are $6-$9 paid by the company Direct Costs Indirect Costs

SAFM 550 Examples Of Indirect Costs Lost production Lost production Replacement equipment/facilities Replacement equipment/facilities Replacement labor Replacement labor Clean up costs Clean up costs

SAFM 550 Examples Of Indirect Costs Management time Management time Regulatory fines Regulatory fines Insurance deductibles Insurance deductibles Insurance premium increases Insurance premium increases

SAFM 550 Loss And Profitability Company has $10 million in annual sales Their profit margin is 5% Indirect costs Indirect costs of office fire are $100,000 How much sales to maintain profit margin?

SAFM 550 Loss And Profitability $2,000,000

Types of Standard Insurance Coverage Property General Liability Fleet Worker’s Compensation Marine Umbrella

SAFM 550 Property Coverage Coverage for structure and appurtenances Business personal property Inventory, goods in process, finished Personal property of others on premises

SAFM 550 Property Coverage Loss of income/extra expense Boiler and Machinery Earthquake, flood, wind, subsidence Crime Special hazard situations

SAFM 550 Comprehensive General Liability Premises Liability Liquor Liability Products Liability Employment Practices Liability Completed Operations

SAFM 550 Specialized General Liability Policies Professional Liability Directors and Officers Liability Aircraft or Watercraft Liability Personal Injury and Advertising Liability Environmental Liability Garage Liability Bailment Liability

SAFM 550 Fleet Coverage Automobile Liability, Physical Damage, Collision, Comprehensive Type of Operation, products hauled Radius of operation Driver election, training, supervision Maintenance program DOT Compliance Past Losses and preventability judgment

SAFM 550 Workers Compensation SIC Experience Modification Programs in Place OSHA Compliance PREMIUM based on Experience Mod. Factor and State Rates State Operated [Monopolistic] Operations OCIP Construction Jobs

SAFM 550 UMBRELLA COVERAGE l Excess General Liability l Applies After the First Layer l Catastrophic Losses l Reinsurance