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Published byAbraham Moore Modified over 6 years ago
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David Lodwick, CIC, CRM Director of Trust Services
Risk Management 101 David Lodwick, CIC, CRM Director of Trust Services
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“Risk Management is the practice of protecting an organization from financial harm by identifying, analyzing and controlling risk at the lowest possible cost” - Robert J. Marshburn, CIC, CRM, ARM
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3 Short Thoughts Don’t risk a lot for a little
Don’t risk more than you can afford to lose. Don’t treat insurance as a substitute for risk control* *CRM Practice Manual
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Some Basic Steps Identify your risks Property
People: employees, vendors, public Other Controlling/Managing those risks Risk Transfer Contractual Insurance Know your retention levels Monitor and modify
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Property Risks 1st Party Buildings Business Personal Property
Property in the Open (Fixtures) Mobile Equipment Care, Custody & Control Short Tail (Claims open and close quickly)
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People 3rd Party Employees Employment Practices Hiring Termination
“Everything in between”
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Public Premises Liability – Slip & Fall Law Enforcement exposures
Elected Officials – Ordinances and Land Use Decisions
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Controlling Risk Property Inspections Maintenance schedules
Reporting and monitoring procedures for corrective measures
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Controlling Risk Employees Safety training Protective equipment
Hiring practices Job descriptions – Essential duties Supervisor training ……
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Controlling Risk Risk Transfer High Risk Operations Transfer Risk
Avoid Sub-Contract Transfer Risk Contractual Transfer Indemnification Hold Harmless Waiver of Subrogation Insurance Last option
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Build Your Team Internal Legal Your staff Human Resources Accounting
Department heads Key staff members Safety committee
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MUST COMMUNICATE WITH YOUR TEAM!
Build Your Team External Insurance carrier staff Risk Control Adjusters Other resources TPA’s Agent/Broker Consultants MUST COMMUNICATE WITH YOUR TEAM!
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Summary Identify Your Risks Develop Your Plan to Control
Contractual Transfer Insurance Transfer Retain Deductibles Self Insurance Build Your Team and Work Your Plan
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Workers’ Compensation & Your Experience Modification Factor
Workers’ Compensation Premium – Payroll x Rate x Mod = Premium Can Only Control the Mod!
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Frequency Leads to Severity
Claims Issues Frequency – How many losses Severity – Large losses Frequency Leads to Severity
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Two Types of Losses Medical Only – medical treatment for injury/exposure – worker returned to work in less than 7 days Lost Time - medical treatment for injury/exposure – worker returned to work in more than 7 days
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What is Counted as “Actual Losses?”
Medical Only Losses Worker out less than 7 days $ Losses Discounted by 70% in the formula Lost Time Losses Worker out 7 days or more $ Losses not discounted
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Medical Only vs. Lost Time Claim
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Keys to Managing Your Mod
Reduce losses through effective safety program Effective return to work program to reduce the number of lost time claims Monitor your claims reserves with TPA/carrier
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Questions?
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