Loss Control

Creating a proactive, loss control report for you and your business.

 

Listen to the full episode here, or read the full transcript below

Paul Martin: Welcome to Risky Business, commercial insurance with Butler Byers. This is Paul Martin, the business commentator on CKLM. And joining me, Colin Rooke, the commercial risk reduction specialist with Butler Byers. And Colin, I guess first order of business, happy new year to you. And it’s that time of year when we turn over the calendar and we put a new date, a new number on the year, that it’s a time for reflection, for pause. People make resolutions. They say, “I’m going to do things differently this year”, or, “I’m going to sharpen my saw or my tools a little bit”. So in your world, when people come to you, business owners come to you, and they say, “Colin, this is a difficult market these days. We’ve got COVID overhanging us, you keep telling us about something called a hard market in insurance”. So as a business owner, your advice always is, get better at what you’re doing. So when they come to you and they say, “I’ve got a resolution this year, I want to do better, how do I do that?”, what advice do you give them? What do you say, “Do this, this, and this, and you’ll see an improvement”?

Colin Rooke: Really good question. And when you’re talking risk, it’s not like we point one thing out, we solve it, and then the risk goes away, there’s no more risk. We’re always working on risk mitigation. If we can avoid it entirely, great, but the goal is to reduce risk as much as possible. And so when you talk risk, and I’m certainly guilty of this, I think I have a way of producing an overwhelming list of risks or things that you could be doing better, and then the task, like I said, seems daunting or just too much to take on. I think if you’re thinking new year, it’s time to put more effort into the business, no different than people making resolutions to eat healthier, work out more, spend more time with family. Pick something.

Colin Rooke: If we’re talking about risk reduction, and there’s 15 topics that hurt you a bit, well what keeps you up at night? Pick that. Let’s work on that. If it’s a disaster recovery plan, if you’re feeling, “If I have a significant loss, what would I do? I have no idea where I’d work. I have no idea how I would work. I don’t know what I need. I don’t know what I don’t need, and I don’t know how long it would take me to get back up and running.” If that is one of the most significant risks you can think of, make a plan and say, “We’re going to tackle that this year.” We’ll sit down with you, we’ll build out the plan, we’ll assign duties, and we’ll make sure it gets done.

Colin Rooke: However, I think the idea of disaster recovery is relevant to every business. It’s just more or less impactful depending on the industry you’re in. So if you don’t have a plan, but you’re an office exposure, any office really, thanks to COVID I would argue that you wouldn’t have a particularly different, difficult time finding a place to work. And so maybe disaster recovery isn’t top of mind. However, depending on your operations, maybe incident response planning, what to do if we have a cyber breach, or planning for any PR related risks, that might be more impactful than an overall, what would we do if the building burned? But pick something, think about it, think about what you’re doing right, but think about what you want to work on and then plan for that and just get it done. Tick off a box.

Paul Martin: New year’s resolutions are a really intriguing piece of the human psyche. We get this artificial date, really, it’s a day on the calendar, and all of a sudden, well, we have to turn a page and look at things differently. And we generally go into a new year with a lot of vim and vigor, and two weeks into it we’ve pretty much written that off, or we forgot about … We lose the momentum on it. How do you he business owners who say, “I do want to get better at what I’m doing, on my risk management”, what help can you give them? What advice do you give them? How do you help them not lose that excitement two or three or four weeks into the year?

Colin Rooke: Really good point again. Traditionally, when you talk about the normal way insurance has been bought and sold, depending on the size of the company you might be dealing with owner operators, you might be dealing with a board, or you might be dealing with a chief financial officer, controller, or equivalent. When we talk risk, though, it’s bigger than the policy. In fact, it’s not about the policy really at all. And so when we decide on what we’re going to work on, we want consensus. We always say, “Well, who else would be relevant to this conversation of risk?”

Colin Rooke: And so we’ve all done this. It’s one thing to say, “New year, I’m never going to eat a piece of chocolate again”, and you you go strong for two weeks. And in fact and I do this, I’ve got a chocolate addiction. But when I say I’m not going to eat chocolate, then it’s suddenly all I can think about, because it’s on my mind because I’m thinking about not eating chocolate. But when you have a team come together and say, “Look, we had a scary moment last year. We had a breach and it could’ve been a lot worse. And luckily it wasn’t, but we noticed we didn’t have a plan. Nobody knew what to do.” Okay, let’s get together and say, “We’re not going to tackle the world, but we’re going to start at least by mapping that out. Do you understand cyber risk? Do you have a plan for when it happens to you? Because it will. And have you measured the impact to the organization? Is it worth doing this?”

Colin Rooke: If we get together and we say, “Worst case scenario, we’re talking a couple thousand dollars”, it’s probably not worth planning for. But if we’ve had a talk and we get the relevant parties together, and we determined this could be a significant thing … And when we have a group together we can assign tasks, it’s not entirely on one person’s shoulders. We build it out. Who are we going to gather this information from? Great. Who’s going to build this part of the plan? And when we really dive into it, it’s usually just a lot of people doing a little bit, and then we organize it. It’s not something that you say, “Well, the first hundred hours of the time I devote to working on my business is going to be this incident response plan.” No, because we have it primarily completed.

Colin Rooke: It’s just, it’s often assigning tasks and giving it some high level thinking like, what term would you use if you’ve found yourself in a situation where your breach hit the media? How would you handle it? It’s a discussion. We decided on who that would be, we mark it down, we put down phone numbers, websites, contacts, an idea of costs, and then we, next page. And if you want to contact that firm on your own and dig a little deeper, fine, but at least you’ve done something. And again, now it’s happened to us, and it doesn’t have to be cyber related. There’s a death at a construction site, right in the plan it says, we call this number. And in fact, it’ll say who will call this number.

Paul Martin: With the start of the new year, you’re always advising people that we have the step-by-step plan available. And I think you’ve updated some of those programs for the new year, correct?

Colin Rooke: Yeah, we are constantly working on looking for new resources that are going to help our clients. And we can’t get to everything. Risk is changing all the time. There’s always something new on the horizon. And if you ask those around the office, there’s always dozens of things that are on our wishlist. So we’re always working on collecting those. And lately, we’ve been on this idea of loss control. So depending on the industry you are in, the idea of having regular visits from loss control from an insurance company is not foreign to you. And so we thought, okay, well one, if we build out our own loss control questionnaire, we see the reports, we know what they’re after, we know what looking for, we know the impact of having a poor result. What if we performed our own? What if we went in advance out to our clients and said, “We know what they’re going to ask, let’s work on it today”?

Paul Martin: I want to pick that up, because that’s an intriguing context. We’ve got to take a little break, but we’ll come back and we’ll pick that up right after this. You’re listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers. This is Risky Business. Back after this.

Paul Martin: Welcome back to Risky Business, commercial insurance with Butler Byers. This is Paul Martin, and joining me Colin Rooke, the commercial risk reduction specialist with Butler Byers. Colin, just before the break, you were saying, you were almost teasing a little bit. You said, “We already know what the insurers, the insurance companies are going to be asking”, and these loss control programs that they are always running. What if they showed up at your office and you’ve already got it written? That’s an intriguing context, that you in advance guess what they’re going to be asking and prepare it so that when they show up, here’s the report card.

Colin Rooke: Yeah, absolutely. When you think about our system and what we do, it’s almost purely around communication, right? Having discussions about risk, communicating those back to our clients so our clients can communicate that back to the staff, and then we communicate with the insurance companies. And so when there’s the idea of loss control, what if we’re already having that talk? What if, when they arrive, you say, “We knew you were coming, we’ve given it some thought, we’re pretty sure we have all the areas that you want to look at, and here’s our report and you’re free to review it”? Or what if, a broker like me, I call you up and I say, “Paul, does May 15th work to have someone spend about a half day walking around the shop?” And what if a month out, we were able to send that loss control expert a detailed report that he or she could review long before they arrive? And at that point, they’re just double checking.

When you think about our system and what we do, it’s almost purely around communication, right? Having discussions about risk, communicating those back to our clients so our clients can communicate that back to the staff, and then we communicate with the insurance companies.

Colin Rooke: In our industry, for the most part, we’ll say, look, unless it’s a known risk, unless it’s a type of risk where you already know it’s not going to go well and the loss control may lead to the insurance company wanting [off risk 00:11:19], so I’ll just say with a caveat, assuming all clients are at least average, the loss control, they’re going to point out some things that need to be addressed. But we always tell our clients that they’re not going to walk around and then in 15 days, they’re going to say, “Now it’s a 40% increase because of what we found.” But it’s not entirely true. They’re not going to do it mid-year, but if loss control finds a lot of what they hope they wouldn’t find, it just comes at renewal. Every underwriter on earth will site and have a copy of any loss control performed.

Colin Rooke: So if we say, “Look, we’ve got 60 days to tackle some of this stuff, let’s make sure there are no flammable materials near a heat source. Make sure you do have all the background checks completed and filed for all of your drivers. Make sure that if you’re an excavation contractor, which we’ve got a new loss control questionnaire for, make sure that all of your job sites are properly roped off, or fenced off, and well lit, let’s all of them, and let’s document that.” Just imagine the report that goes back to the underwriter. And I think I have a bad habit of making it too much about the insurance, too much about the policy. But at the end of the day, if you’re an excavator, you don’t want a death at the job site, and you’re being picked on because the loss control experts think you’re going to have a death at the job site.

Colin Rooke: If you have a death at your job site, insurance is not your biggest concern, it’s the PR nightmare that follows. It’s all your competitors talking about referencing. It’s the media saying, “Look, here are their practices and someone died.” And so yes, it does impact the policy, but it’s really at the end of the day about the business. We want you in tip top shape, no different than going to the gym in January and committing to looking like a bodybuilder at the end of the year, we want you to be in tip top shape. And it’s putting in the work now that’s going to mitigate future risks. And again, it’s not about the policy. It’s about the operations. It’s about the performance of the company. It’s about the total cost of risk and avoiding downtime. And so it’s bigger than the policy. It’s bigger than the story we tell. It’s about your philosophy, how you work.

It’s about the operations. It’s about the performance of the company. It’s about the total cost of risk and avoiding downtime. And so it’s bigger than the policy. It’s bigger than the story we tell. It’s about your philosophy, how you work.

Paul Martin: It’s really interesting the way you put that, that it isn’t about the policy, but that theoretically is what we’re talking about. And people might be surprised to hear that you say, it’s not about the policy, it’s about good business practices, or just A, good business practices, good for the business, and B, by the way, incidentally, they’re good for your insurance premiums too.

Colin Rooke: Absolutely. I guess the message I want to portray is, don’t do it for me. Don’t do it for Colin Rooke, your risk reduction expert that’s assigned to your account. I’m indifferent. Do it for yourself. If you’re a commercial plumbing and heating contractor, and you’re on a major project, and your checks and balances aren’t in place, and there’s a leak that causes a claim, you’ll have insurance. Most brokers will have you covered. You’ll have insurance. But will your company survive this if it’s known throughout the industry that a colossal error was made that could have been avoided should the right checks and balances been in place? That’s what I’m talking about, the overall performance of your company that just so happens to have a trickle effect to the premiums you pay, to the availability of insurance. So yes, don’t do it for me, do it for you, and there’s a side benefit to that.

Paul Martin: That might be your new year’s resolution. How do I make my business better?

Colin Rooke: Yeah, absolutely.

Paul Martin: Yeah. And risk being one of those factors. Listen, just before we wind up the show, we’ve just concluded a year, for many it was a challenging year. Did we have, from your perspective in the insurance world, any lessons from 2020? What are the takeaways from 2020 for you?

Colin Rooke: Yeah, I think the lesson, and I hate to talk cyber again, but the lesson from 2020 is it’s getting worse. It’s not going away. It’s more important than ever. We’re seeing the number of claims, the nature of the claims continuously increase and change. And on a positive note though, I think we’ve all learned to be flexible. I think the insurance companies have learned to be flexible. I think some of the insurance companies did some great things in 2020 to help their clients. And I think we’ve all learned that we can adapt and pivot our business, and do it quite frankly in short order. We’ve changed the way we work. I never thought that I’d be doing risk reduction workshops staring into a computer screen from my living room, as opposed to in a boardroom with the full management team.

Colin Rooke:  But we’ve shown that we can do that. And we’ve also shown I guess, even as a company, that we talk a lot about traditional risks and then we get something like COVID thrown at us, and in short order we can change from talking about reputation risk, employee engagement, to return to work, and COVID, and pandemic, and the ramifications on a DNO policy. So I think the predictor for the future is work on cyber, it’s not going to go away. I think if the industry works on risk, we can get out of this hard market and return to normal pricing, but it’s going to take effort from each and every person listening to this show.

Paul Martin: That’s a message that sounds very familiar, with the COVID. Fighting COVID is stay home, wash your hands, wear a mask. You’re saying it’s pay attention to risk, and we’ll get through this together, and actually get back to what we would consider to be normal…

Colin Rooke: Absolutely.

Paul Martin: You’ve been listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers. I’m Paul Martin. This is Risky Business. Thanks for joining us. Talk to you next time.