Developing a Loss Prevention Program
There are many different approaches to property loss prevention programs. Can you identify what factors set your loss control program apart from the rest?
The better question may be: do you know the best practices to reduce your overall risk? This article is the first of a series designed to assist you in developing an effective property loss prevention program.
Step 1 and the most fundamental component of any loss control program is management commitment. This top level involvement should emphasize:
• Creating a culture where individuals accept loss control as a key part of business success.
• Requiring accountability throughout the organizational structure, from corporate to facility level, and
• Supporting a process of continuous improvement through various feedback mechanisms (e.g. loss control audits).
This top-down method pinpoints and reinforces what is considered appropriate performance throughout the organization. Corporate risk management programs should set the standard for all personnel to confirm they know what is expected of them and that they understand the overall consequences to the business if not followed.
At the same time, it is important for management to lead by example and set realistic expectations. Selecting recognized standards, such as the National Fire Protection Association (NFPA) standards, as the minimally acceptable criteria used for your property loss control program will provide consistency and help reduce future losses. Inspections, using those standards as the baseline, should be approached from the bottom up.
Local plant personnel are part of this process and should be responsible for continuously improving and ensuring compliance at their plant or facility.
For instance, you may have a corporate program on how to handle hot work. Maximum benefit from the program is not achieved unless all managers support this program to ensure it is implemented and managed correctly at all facilities.
To prevent fires caused by hot work, personnel must be trained to identify hazards and be required to take proper precautions every time hot work is performed. This additional time needs to be recognized and supported.
Corporate management may be required to make capital allocation decisions for loss prevention which may affect one or more facilities. Part of that decision making process is identifying how available capital will be allocated and the impact it will have on the overall loss potential.
Risks must be weighed to determine which are acceptable and which must be resolved. While fire codes are the minimum requirement you must comply with, your chosen loss control provider can identify risk exposures where the most effective solution exceeds the fire code.
Management must consider the requirements of the internal standards, fire codes and other laws/regulations. To reduce risk and protect your company’s assets, start by establishing a baseline level of compliance. Audit your program, implement improvements and provide periodic re-audits to establish a cycle of continuous improvement.
Management commitment is just the first step in creating an effective risk management program. In the next article we will discuss inspection, testing, and maintenance programs.