What is Loss Control

As a small business owner it is natural to be focused on making a profit, while

providing quality products and services to your customers. However, keeping an eye

on risk management and loss prevention can help you avoid common financial consequences

to your small business. Loss control, in conjunction with a solid risk management

plan, can keep you in business, while helping to maintain a good reputation among

existing and prospective customers.



What is loss control?



Loss control involves several different approaches taken to reduce both the severity

and frequency of loss to employees, customers, equipment, and products. Put simply,

loss control is minimizing risks.



This multidisciplinary approach takes into account risk management, human management,

and technology management in an effort to prevent or minimize financial loss. Loss

control takes puts an action plan in place to reduce, minimize, or eliminate hazards

and risks that could potentially lead to claim or accident which results in a loss.



Loss control includes a combination of risk control techniques including insurance

and noninsurance transfer of risk. Other techniques that minimize the risks of an

individual or business include segregation of exposure risks, risk avoidance, workplace

safety, machine guarding, industrial hygiene, fire and explosion safety, noise control,

product control, and risk retention. Safety award programs for employees, including

drivers, are another good loss control technique.



Hazards may be from unsafe acts, human error, or from the workplace itself through

unsafe environmental conditions. An explosion, fire, or accident in your place of

business can not only result in a temporary (or permanent) business stoppage, but

can mean a loss of god will.



A sound loss control plan analyzes past claims to determine causes and patterns

of losses. It also involves evaluating current loss control measures and compares

them against expected results. It may also include the implementation of specific

risk management programs.



In summary, loss control can be:



1) Transferred to another person or entity, such as an insurance company.


2) Retained through self-insurance or high deductible


3) Avoided. Although not all risks can be avoided.

4) Reduced through education and training, installing safety devices, implementing

workplace safety programs.



The overall goal of loss control is the reduction in the frequency and severity

of insurance claims. It behooves every small business to have a sound loss control

program to minimize accidents, repairs, business downtime, fines, lawsuits, and

insurance claims.