The traditional role of the insurance company loss control rep is that he/she is the "eyes and ears" of the underwriter. To some extent this is still true; however, he/she has taken on an even more expanded role. Nowadays, the rep is also responsible for coordinating the various services and/or products available to insureds. Keep in mind, not all services are provided to all clients; just like anything else, the bigger you are, the more you get.
During our last hard market (2001-2003), loss control truly was the "eyes and ears" of the underwriter. The rep would visit with an insured or prospect, assess the exposures and controls, and write a report. If the rep told you that you needed a central station fire alarm, he meant for you to install one; and if you didn't, well, go find another carrier.
Guess what? The other carrier was going to have the same requirement(s). The carriers held all of the cards. They knew you didn't have any alternative other than to comply with their recommendations. Don't get me wrong, all in all, the recommendations were warranted; it's just they wouldn't be as vigilant about them as they would be during a soft market.
In a soft market, carriers are a lot of times more lenient. Where before they would tell you that you absolutely had to do something, now they have to weigh the significance of the recommendation and decide if it is something they are willing to lose an account over. The insurance company knows the insured can probably find another carrier who won't be so vigilant. All the gloves are off in a soft market. It's the insured's who are in the drivers seat, not the carriers. I don't want you to think the carriers are willing to overlook important safety hazards or exposures; it's just that they are willing to work with you even more so on controlling them.
Today, the carriers want to partner with insureds. It has become a two-way street in a lot of respects. Carriers are doing all they can to differentiate themselves in ways other than price. Sure, anyone can give you a low price, but what else do they bring to the table? Loss control has become a way for the carrier to bring "value" to the equation. No longer does the rep just go out and report back to the underwriter with his/her findings. Now, they must also make sure the client knows all of the services available to them.
What we see now is coordination between your agent, the underwriter, the loss control rep and the claims department. In most cases, the rep will still visit with an insured or prospective insured and come up with a list of recommendations; but now, they will be willing to work with you even more on implementation. In addition, the strategy will be communicated to all of the other parties (agent, underwriting, and claims) so that everyone is on the same page and that the recommendations can be implemented and monitored.
I would be remiss if I didn't mention at least a few of the services some carriers provide through loss control. In no particular order, they are:
1. Business continuity planning
2. Legal review of contracts (hold harmless & indemnity clauses)
3. Fleet safety
4. IT data security
5. Property valuations
6. Industrial Hygiene
7. Ergonomics
8. Electrical preventative maintenance
9. Property conservation
The good news is most of these services are free, and for those that aren't, the carrier is usually willing to defray some of the cost. Not all carriers provide these types of services, so that is why it is very important to find out what loss control services are available prior to making any buying decisions. It really is more than price when deciding between carriers. The same can be said for deciding between agents. What value add do they bring to the picture?
Now that we know the function of loss control, and the services they provide, it's important to discuss how to prepare for a loss control visit. At the risk of sounding simple, rule number one is to take the rep's phone call. His/her job is to either take a phone survey or make an appointment for a site visit. Don't make it difficult. The last thing you want to do is to get off to a bad start by ignoring his/her phone call. Do yourself a favor - take the call!
So you've made an appointment with the rep to do a physical inspection, now what? It really depends on what the focus of the visit is. Is he coming to do a property inspection? Is the inspection going to be more focused on liability, and the contractual controls you have in place (if you're a contractor)? You'll want to know only because you should have as much information ready for the rep before he/she gets there. There's nothing worse than when a loss control rep shows up and has to spend time obtaining information that should have been ready prior to the visit.
If the rep is coming out to look at your property, you'll want to make sure you have the following: sprinkler information - such as design and testing, and a building plot plan. If he is going to be looking at your fleet, do you have a fleet safety program? If you do have one, you should be able to detail how you follow up or manage the program. For instance, what really happens when you have an automobile loss? Do you investigate and follow up on any corrective measures? A fleet safety program is great, but it has to be more than words on paper.
If you're a contractor, the rep is going to want to see a sampling of contracts used by your GC's. If you use any subcontractors, they'll want to see the contracts you use with them. Do they contain the proper risk transfer clauses? Depending on the size of the contractor, they will more than likely want to visit one of your jobsites. If they visit a jobsite, they'll be looking to see what the safety conditions are at the site and how the foreman is managing the job. Is he documenting everything? If he isn't, he should be. It would also be helpful to give the rep a list and scope of your ten most recent jobs.
One of the objectives for the rep is to get in front of the decision maker, even if only for ten minutes. The rep wants to get a feel for management, and to see if what the decision maker says correlates to what is actually happening out on the front line. If the owner is afraid of giving the rep access to the front line workers, that would signal that maybe things aren't the way they were lead to believe. Consistency from top to bottom is important.
I hope I have given you an insight to the function of the loss control rep. It is a very important business unit of the insurance company. It will continue to operate as the "eyes and ears" of the underwriter, but it is much more important than just that. Loss control is beneficial in that you can view them as a consultant that helps you reduce loss.
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