Loss Control for Businesses

Preventing a claim is often better than having to file one. That is the basic idea behind loss control in business insurance.

Loss control refers to the steps a business takes to reduce the frequency and severity of accidents, injuries, property damage, lawsuits, cyber incidents, and other losses. Insurance companies often evaluate these practices when underwriting commercial insurance, and strong loss control can make a business a more attractive risk.

Here are some important loss control measures businesses should consider across their insurance program.

General Liability Loss Control

General liability insurance protects businesses against many third-party bodily injury and property damage claims. Common areas to watch include:

• Slippery or uneven walking surfaces
• Poor lighting, damaged stairs, or unsafe parking lots
• Cluttered walkways and emergency exits
• Inadequate warning signs
• Unsafe storage of materials
• Lack of documented inspections and maintenance
• Uninsured or underinsured subcontractors
• Missing certificates of insurance when hiring contractors

Contractors should pay particular attention to jobsite safety, subcontractor controls, barricades, equipment inspections, and written safety procedures.

Workers’ Compensation Loss Control

A strong workplace safety program can help reduce employee injuries and workers’ compensation claims.

Important measures include:

• Employee safety training
• Proper personal protective equipment (PPE)
• Machine guards and equipment safeguards
• Fall protection
• Safe lifting procedures
• Regular equipment inspections
• Slip-and-fall prevention
• Clear injury-reporting procedures
• Return-to-work programs

Businesses should also review previous claims for patterns. Repeated injuries can indicate a workplace hazard that has not been properly addressed.

Commercial Property Loss Control

Commercial property insurance protects buildings, equipment, inventory, and other business property from covered losses.

Property owners should regularly inspect:

• Roofs
• Electrical systems and panels
• Plumbing and water lines
• Heating systems
• Fire extinguishers
• Smoke and fire detection systems
• Sprinkler systems
• Commercial cooking equipment
• Flammable material storage
• Security systems and exterior lighting

Preventative maintenance is particularly important. Small problems involving roofs, electrical systems, or plumbing can eventually become expensive property claims.

Employment Practices Liability Loss Control

Employment Practices Liability Insurance (EPLI) can protect businesses against allegations involving wrongful termination, harassment, discrimination, retaliation, and other employment-related claims.

Businesses should consider:

• Written employee handbooks
• Anti-harassment and anti-discrimination policies
• Consistent hiring and termination procedures
• Management and employee training
• Formal complaint-reporting procedures
• Documentation of disciplinary actions
• Proper employee recordkeeping

Having policies is only part of the solution. Managers and supervisors also need to understand and consistently follow them.

Cyber Liability Loss Control

Nearly every business has some degree of cyber liability exposure. Email, payment processing, customer information, cloud software, and employee accounts can all create opportunities for cybercrime.

Important cybersecurity measures include:

• Multi-factor authentication (MFA)
• Strong password requirements
• Regular software updates
• Employee phishing training
• Secure data backups
• Endpoint protection
• Restricted access to sensitive information
• Payment verification procedures
• Cyber incident response plans

Employee training is especially important because phishing emails and social engineering continue to target the people using a company’s systems.

Commercial Auto Loss Control

Businesses using company vehicles should develop procedures to reduce the likelihood of commercial auto accidents and claims.

These can include:

• Motor vehicle record (MVR) checks
• Driver qualification standards
• Distracted-driving policies
• Driver safety training
• Vehicle inspections
• Preventative maintenance
• Accident-reporting procedures
• Rules regarding personal use of company vehicles

Businesses should also consider hired and non-owned auto insurance when employees drive personal or rented vehicles for business purposes.

Professional Liability Loss Control

For businesses providing advice or professional services, professional liability insurance can protect against certain allegations of errors, omissions, or negligence.

Loss control measures can include:

• Written contracts defining the scope of work
• Clear client expectations
• Documentation of recommendations
• Quality-control procedures
• Employee training
• Contract review
• Written documentation when clients decline recommendations
• Avoiding unrealistic guarantees

Good documentation can be one of the most important defenses against a professional liability claim.

Make Loss Control Part of Your Insurance Strategy

Loss control should be an ongoing part of managing your business.

Hiring employees, adding vehicles, purchasing equipment, moving locations, taking on larger contracts, or offering new services can create new exposures that should be reviewed.

Working with an experienced commercial insurance agent can help you identify these risks, review available loss control resources, and make sure your business insurance coverage continues to fit your operations.

Insurance helps protect your business after a covered loss. Loss control can help prevent that loss from happening in the first place.