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Controlling Risk for New Small Business Insurance Portfolios

Having an effective risk control or better known as lost control program in place can help you get the best small business insurance pricing in the marketplace. The goal of risk control and/or lost control is simply to reduce and/or eliminate the frequency and severity of claims and losses the company might be facing. Sometimes small business insurance packages include underwriting requirements that demand that frequency and severity exposures are under control. This can take on many forms such as requiring the insured to have safety devices in place, safety plans formally written and in place and a follow-up claims inspection review process in place. When seeking to provide lost control programs in place engineering designs must be at the forefront in designing a safe work environment. The implementation of safe workflow procedures requires comprehensive education of all employees that are involved in the operations. Identifying the hazards and increased liability conditions is the first step.

Management at all levels must be involved in the loss control process.

Once the typical hazards are identified within an organization, communicating those hazards to operators and employees is crucial to loss control safety. Reviewing and analyzing past claims and lost history for your company and for other companies within your industry can be helpful in identifying industry norms. The communication process in the loss control plan must flow both from the top and from the bottom to top of an organization. If upper management does not take suggestions, comments and/or complaints from front line workers, the lost control plan is doomed at the get-go. Even though small business insurance packages tend not to be complex contracts it is still important to have a behind-the-scenes risk control loss prevention plan in place where appropriate for your business and industry. Motivating both upper management middle management and the frontline workers can and will be your biggest challenge. Besides the identification of the hazards to potential losses and having a plan to deal with those potential losses, the follow-up to any and all claims also needs to be a part of the risk control plan.

In order for you to receive the most competitive price for your best small business insurance portfolio, the formal, detailed risk control plan must be in place. Submitting this document along with your application will ensure the best pricing available for you. Before an insurance company releases a price for a new small business insurance potential client, the underwriter most certainly will be looking for lost control systems that are in place before they will give their best pricing.

In summary some of the key risk control characteristics that we have looked at include: engineered design operations and workflows for safety; education for management and employees at all levels with regards to the risk control plan; effective communication systems in place that allow information to flow from top to bottom and bottom to top within the organization. Finally, motivating all people within the organization to follow through on the risk control plan is essential.

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