The Total Cost of Your Insurance Program, Part 4

As an illustration of the principles discussed so far, we offer these service level guidelines which have been developed by InterWest Risk Control for both Property & Casualty and Workers' Compensation clients.|

This is the fourth article in a five-part series on understanding the total cost of your insurance program. Preceding and subsequent articles in this series can be found here: Part 1, Part 2, Part 3, Part 5. As an illustration of the principles discussed so far, we offer these service level guidelines which have been developed by InterWest Risk Control for both Property & Casualty and Workers' Compensation clients: Property and Casualty Service Level Guidelines (not including Workers Compensation) Due to the significant variable revenue levels generated from either a mono-line or multiple lines of coverage (fire, inland/ocean marine, boiler/machinery, general liability, products liability and completed operations, auto liability, etc.) any client generating at least $10,000 in revenue would qualify for risk control service. Based on the above, for all Property & Casualty requests, please contact your InterWest Risk Control Consultant to determine your customers' needs and services and timelines including the following: Property Protection/Fire Prevention
  • Interpret and prioritize insurance company loss control recommendations.
  • Evaluate sprinkler system installations utilizing NFPA 13, 231, and 231C.
  • Assist clients with automatic sprinkler system and fire hydrant testing.
  • Analyze building valuations and construction class codes.
  • Site inspections and audits including: cooking equipment, spray painting, flammable liquids and chemical storage, indoor/outdoor pallet/tire storage, in-rack arrangement of stock.
  • Course of construction/builder’s risk accounts for fire prevention and security.
Boiler and Machinery Protection
  • Interpret and prioritize insurance company loss control recommendations.
  • Determine state operating permit criteria based on objects such as high/low pressure steam boilers, air tanks, LPG tanks, storage water heaters, etc.
  • Provide on-site consultation of machinery and equipment, unique business interruption exposures, and preventative maintenance and inspection activities and forms.
General and Public Liability
  • Interpret and prioritize insurance company loss control recommendations.
  • Provide on-site assistance for life safety concerns with risks such as educational institutions, restaurants, hotels and motels, shopping centers, office properties, and residential risks.
  • Evaluate public safety such as emergency exits and lighting, walking surfaces, ramps, stairways and steps, lighting, guardrails and handrails, maximum occupancy limits, and similar items.
  • Assist with complying with the Americans with Disabilities Act (ADA).
  • Analyze public injuries and illnesses to determine loss trending and corrective measures for preventing reoccurrences.
  • Attend and participate at supervisory and management-type training sessions to provide information on accident investigations and accident review board committees as well as follow through on any relevant loss prevention remedies arising from these sessions.
  • Evaluate playground equipment for parks and school risks.
Product Safety
  • Interpret and prioritize insurance company loss control recommendations.
  • Coordinate loss control activities between insurance companies and clients for loss prevention services.
  • Review existing quality assurance and control manuals relating to standards such as ANSI, ASME, CPSC, voluntary industry product safety guidelines, etc.
  • Provide on-site plant tour and analysis of manufactured products. Evaluate quality control measures, plant reviews, blueprints, and drawings.
Fleet Safety
  • Interpret and prioritize insurance company loss control recommendations.
  • Provide clients with technical information on DOT and CAL-OSHA regulations.
  • Specifically offer the following services for our clients:
    • Audit fleet safety program including driver selection, vehicle inspection and maintenance, accident investigations, motor vehicle record check criteria, driver logs, etc.
    • Perform on-site surveys of vehicles, inspection and maintenance activities, and premises.
    • Complete vehicle observations and evaluations of straight trucks, cab-overs, private passenger automobiles, and tractor/trailer rigs for backing, lane changing, following distances, and speed of travel.
    • Review driver qualification files with management to determine driver logs, Commercial Driver License, physical examination, written/road test certification, safety incentives and awards, and similar documents.
    • Perform “ride-alongs” with company drivers to evaluate speed of travel, following distances, lane changes, backing, product control and security, and customer interfacing.
    • Attend and participate at fleet safety meetings and accident review board committees on defensive driving topics, vehicle losses, and accidents, and safety incentive awards, etc.
Additional Services
  • Access to defensive driver training, property management, online risk management training on InfoSource Café (InterWest's extranet to provide clients with important resources to be better prepared for dealing with emergencies, to find answers for Cal-OSHA compliance issues, to improve their injury prevention efforts, to manage risks associated with property and products, and to maximize value of employee benefit programs)
  • Access to fleet safety videos including defensive driver (fee may apply)
  • Disaster response plan development and review.
  • Sexual harassment prevention training for managers/supervisors and employees.
  • HR consulting available (may be fee based).
  • Customized inspection/audit forms for buildings, equipment, vehicles and premises.
  • "Tailored" forms for accident investigation and training, including property, liability, and fleet.
  • Liquor Liability awareness training.
  • Assist in determining root causes of losses and accidents with internal and external claims departments.
Workers Compensation Service Level Guidelines ($4,000 - $20,000+ in Revenue) InterWest brokers can also use a Service Time Line Report (including above risk control service levels) once agreed upon between the customer to monitor activities from risk control, claims, accounting, etc. Here is a sample Service Time Line Report. Loss Control Service Level: Level I Total Revenue: $4,000 to 6,500 Description of Service Levels/Sample Services Contact will be informal, Access to all appropriate services via InfoSource Café, phone consultation and workers compensation safety survey/audit. Follow up on a consultative basis and electronic review of current safety plans and newly completed templates for accuracy and detail. They will be invited to participate in regional workshops and safety webinars. Loss Control Service Level: Level II Total Revenue: $6,501 to 12,500 Description of Service Levels/Sample Services One to two visits annually based on need; Contact will be formal and informal, will receive a formal safety/audit and review, receive written recommendations for priority based services, safety one-on-one training for supervisors, specific safety training based on need. Follow up on a consultative basis and electronic review of current safety plans and newly completed templates for accuracy and detail. They will be invited to participate in regional workshops and safety webinars. Loss control to provide recommendations for the written service timeline. Loss Control Service Level: Level III Total Revenue: $12,501 to 20,000 Description of Service Levels/Sample Services Two to four visits annually based on need; Contact will be formal and informal, will receive a formal safety/audit and review, receive written recommendations for priority based services, safety one-on-one training for supervisors, specific safety training based on need. A loss control representative will be available to sit in on claims reviews, follow up on a consultative basis and electronic review of current safety plans and newly completed templates for accuracy and detail. They will be invited to participate in regional workshops and safety webinars. Loss control to provide recommendations for the written service timeline. Loss Control Service Level: Level IV Total Revenue: $20,001 and Up Description of Service Levels/Sample Services Minimum four contacts with the client and service open based on need and structured service plan. Loss control representation will be available to sit in on claims reviews. Related Articles The Total Cost Of Your Insurance Program, Part 1 The Total Cost Of Your Insurance Program, Part 2 The Total Cost Of Your Insurance Program, Part 3 The Total Cost Of Your Insurance Program, Part 5 Authors Dirk Duchsherer collaborated with Jim Newberry (CHST, Bsc Safety Management) in writing this article. Jim is the AVP and Risk Control Manager for Island Insurance Company, LLC in Honolulu, Hawaii.

Dirk Duchscherer

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Dirk Duchscherer

Dirk Duchscherer confers with CEOs, risk managers, production supervisors and facility directors to identify problems and suggest cost effective solutions. He reviews compliance with such agencies as CALOSHA, NFPA, ANSI, ASTM and DOT and provides clients with technical information on standards, codes and regulations.

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The Total Cost of Your Insurance Program, Part 3
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Now more than ever, customers need to understand their Total Cost of Risk (TCOR). In C.R. "Rob" Ekern’s book "Consultative Brokerage: A Value Strategy," the TCOR model states four crucial cost areas: Insurance Premiums, Loss Costs (direct and indirect), Administrative Costs, and Premium Taxes and Fees. By adopting the TCOR model, clients can measure the effectiveness of their entire safety and risk management programs and not just the premium costs. Research has shown for every $1 paid out in direct costs, an additional $1-4 of indirect loss costs are paid by the client.|

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