Liberty Mutual Insurance 1 General Liability – Prem/Op - Product / Completed op.

Liberty Mutual Insurance 2 Premises / Operations Liability Housekeeping Floor Cleaning Protocol Lighting Matting Systems Parking Lot Changes in Elevation Ice and Snow Control Security Life Safety

Liberty Mutual Insurance 3 Resources / References

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8 Resources / References

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10 Products / Completed Operations Checklists – Pre/Post Service & Inspections Housekeeping – Faulty Service Work

Liberty Mutual Insurance 11 Risk Transfer – Contractual Agreements  Additional insured endorsements  Certificates of insurance  Limits of liability  Hold Harmless  Indemnity clauses  Duty to Defend  Subrogation Waivers Where are our greatest exposures? Construction Premises and Operations Leases, On site services, hiring of services/individuals Products Contracts with vendors, component manufacturers, raw materials suppliers, distributors, dealers, third party sales/service/installation, even truckers (think food).

Liberty Mutual Insurance 12 Net Present Value (NPV) for capital budgeting decisions V = the summation of present values of future cash savings (penny saved is a penny earned) P = the initial investment amount (note: P can also be an annual expenditure into perpetuity (PV = P/K) where P is the annual expense and K is the cost of capital) C is the estimated cash savings in year t k is the cost of capital, discount rate or interest rate

Liberty Mutual Insurance 13 Cost of capital if you had to borrow Opportunity cost of capital Note: If your future cash savings are not inflation adjusted then you will have to reduce “k” by an inflation amount (3 to 5 percentage points) How to determine what “k” should be

Lets Look At a NPV Example

Liberty Mutual Insurance 15 It’s Not Just About Results Activities should also be measured  Examples: Job Safety Analysis Accident Investigations Safety Trainings New Hire Safety Orientations Employee Safety Perception Surveys Injury Reporting Lag Time Safety Inspections MVR Checks

Liberty Mutual Insurance 16 Studies show that corporations with an effective safety management system in place outperform the market by 38% (The West Australian, 2007) Use your resources – Insurance Agent – Insurance Company / Agency Loss Prevention – DOL – OSHA – MSSC – ASSE – Final Thoughts

Liberty Mutual Insurance 17 Summary – Duties of a Risk Manager!

Liberty Mutual Insurance 18 Questions and Comments