2. Workers’ Compensation Loss Prevention
Title screen. Copy and paste this image into the slide sequence shown at left, wherever you want to add a title slide.

3. Safety as a profit center

4. Stop Injuries
What is the single most important factor to prevent employee injuries and vehicle accidents?

5. Overt management commitment
Stop Injuries
Overt management commitment
When the employees believe that you are committed to their safety, they will stop having accidents…Uncomfortable?

6. Stop Injuries Case studies Fatality investigation Fingers crushed
Internal audit response… disappointed
Steel
Pigment manufacturer
Eastern Region… post fatality

7. Case History #1 – Fatality
Tommy Brubaker
Machinist
Midnight shift
Lathe
Warnings? Jackets
Accountability?

8. Case History #2 – Crushed Fingers
Trailer manufacturer
Punch press operator
Dual actuator buttons
Three fingers crushed
Warnings?
Accountability?

9. Case History #3 – Audit Response
Bhopal tragedy
UCC internal audit
Cleanup
True commitment?

10. Case History #4 – Steel Company
High quality rail road wheels
Poor labor relations
Emerged from bankruptcy
Projection of $1.1 million in workers compensation losses per year.

11. Case History #4 – Steel Company
$38M sales, $3.5M W/C premium
Significant evidence:
Exaggeration
Misapplication of benefits …workers’ compensation was used in lieu of health or unemployment benefits

12. Case History #4 – Steel Company
The Solution
Successful proactive loss prevention program
Supervisors trained in accident investigations, modified duty, and profit consequences
Safety committee was refocused from complaint evaluation to injury prevention

13. Case History #4 – Steel Company
Results…
First year:
50% reduction in injuries
66% reduction in costs
$1M premium reduction

14. Case History #5 – Pigment Manufacturer
PA company bought similar VA company
Due diligence – W/C insurance
Zero reported injuries
True?

15. Case History #5 – Pigment Manufacturer
Facility inspection
FX, floor holes, open vats, bicycle chains/gears, housekeeping, machine guarding
Owner interview – 0 injuries

16. Case History #5 – Pigment Manufacturer
How was injury rate so low?
Onsite owner impact, owner attention
Remote owner… prediction

17. Case History #6 – Eastern Region
Fatality
New safety consultant
12 months (training, investigations, STOP, etc.)
Worst to first

18. The maximization of profits comes from the minimization of losses
Peter Drucker
The maximization of profits comes from the minimization of losses
Proactive Loss Prevention

19. Proactive risk management vs. traditional loss control Applies to
Two Safety Paradigms
Proactive risk management vs. traditional loss control
Applies to
Workers’ Compensation
Vehicle Liability

20. Where proactive risk management works?
Security Services
Grocery
Delivery Fleets
Temporary Service Employers
Restaurants
Iron & Steel Manufacturing
Hospitality & Healthcare Institutions
Welding Gas Distributors

21. The Complete Risk Management Program

22. Loss Control vs Risk Control
Loss Control (Traditional Approach)
Manages Costs After Loss Experience
In Short, “Reactive”
Insurance company responsibility
Risk Control (Alternative Approach)
Manages Performance Before Experience
In Short, “Proactive”
Your responsibility

23. If Common Today
Poor Planning
Lack of Training
Unsafe Conditions
Possible Tomorrow
On Site Accidents
Injury/Death

24. Case Study #1 Client – Midsize Welding Gas Distributor Problem
30 vehicle units - 6 months
9 preventable accidents
2 non-preventable accidents
Solution - A structured program
Outcome
0 preventable accidents

25. What made the difference? Commitment! Accountability
Case Study #1
What made the difference?
Commitment!
Accountability
First Executive Safety Committee meeting – all OK
Second meeting – commitment
Third meeting - performance

26. Why Practice Prevention???
Preventing losses IS possible!
Always less expensive than traditional loss control approaches
Less equipment damage and downtime
Fewer customer issues
Professionalism rises
Profit is improved

27. 10 essential elements 1. Management leadership
2. Assignment of responsibility and accountability
3. Maintenance of vehicles, equipment
4. Pre-employment checks
5. Establishment of effective safety committees and training

28. 10 Essential Elements 6. Accident record keeping system
7. Medical and first aid systems
8. Acceptance of personal responsibility by employees
9. Post loss management activity
10. Results monitoring and program evaluation

29. Management Techniques
Systematic accident investigations
Major, minor, near miss
National Safety Council guidelines for determining preventability
Operator and driver/supervisor training
Personnel and vehicle safety incentives & communication
Discipline & accountability

30. Benefits of Prevention
Humanitarian
Less pain
Regulatory Compliance
Avoid OSHA/DOT hassles, citations
Financial
Lower costs, liabilities, down time
Business/Officer Protection
Documentation, manual, program

31. How to measure the company’s real safety performance?
Whose performance?

32. Your performance How to measure…
You (owners, line managers) are accountable … or can become accountable
Case Study – Temporary Service Employees
Case Study – Fraud, Pasadena, CA

33. Industry Comparison

34. How to measure your real safety performance? Long term – W/C rate
Professional, unbiased numerical appraisal

35. How to measure your real safety performance?
Short term
Non-injury incidents (near misses)
First Aid Cases
Recordable injuries
Lost workday cases

36. Fatalities
Lost
Time Cases
Recordable Injuries
Medical Visits/First Aid Cases
Unsafe Behaviors/Unsafe Acts

37. Insurance company structures (policy, rent-a-captive, captive, self)
W/C Insurance
Insurance company structures (policy, rent-a-captive, captive, self)
Premiums adjust for 3 years plus 1
Do some insurance companies care about your performance?

38. W/C Insurance
Insurance companies are designed to make more money when you have more injuries
Case Study - Rapid City

39. Experience Modification Factor (XMod)
W/C Insurance
Experience Modification Factor (XMod)
Frequency – each injury counts as 1x
Severity – Lost workday cases count about 10x

40. W/C Insurance - Frequency
Control your frequency by stopping accidents
Accountability
Measurement
Training
Overt commitment

41. Dupont STOP Program

42. STOP For Employees Concepts

43. STOP Safety Cycle

44. W/C Insurance - Severity
Control your severity by managing the case:
Assertive return-to-work
Professional medical treatment
Trusted doctors (2-way trust)
Fight suspected fraud

45. The maximization of profits comes from the minimization of losses
Peter Drucker
The maximization of profits comes from the minimization of losses
Proactive Loss Prevention

46. Q&A