Every business has the responsibility to mitigate their company’s risks. Loss control is a process that establishes standards, practices, and training programs to reduce risk exposures. It also includes assessing and evaluating losses.
For business owners and managers, loss mitigation is about making intelligent decisions to avoid undesirable outcomes for your company. It can be challenging to know when it’s time for a company to take on a more active approach by evaluating its risks from loss prevention or managing them by assessing losses before they occur, as well as practicing preventative measures through ongoing loss control activities. Here are three reasons why every business needs this critical evaluation.
1. Helps Determine the Cost of Doing Business
Every business should consider the cost of doing business. Every product and service a company provides can potentially be a loss exposure for that business, meaning those exposures can create liability for the company.
While it may be easy to identify specific areas that could cause problems, sometimes these exposures lurk in places you may not have thought of before – including in locations such as your office or warehouse. Therefore, it is crucial to evaluate every area of your company so you can make changes and take appropriate preventative measures, so exposures are minimized. Watching trends and reviewing data can help paint a picture of where your business is most susceptible to losses and how it could improve.
2. Increases Company Efficiency and Performance
Companies of all sizes should focus on performance evaluation. Anything doable to enhance a company’s performance can help make it more efficient, including loss control activities. Evaluating loss exposures can give management valuable insight into where and how risk is created and where improvements are necessary.
A good risk management program involves communicating with employees at all levels and informing them about their responsibilities. A clear understanding of workplace risks will allow for developing a plan for managing these risks and identifying the proper procedures that need to be used to adequately protect the company from known and unknown hazards.
3. Reduces Unnecessary Stress and Issues
Most employees deal with a great deal of stress daily. It is common for people to begin to feel overwhelmed when the workload is growing or even when there are new risks to be addressed. These feelings can make it difficult for employees to perform their jobs.
To minimize these feelings of stress, employers can offer support to their employees by facilitating loss control training. Topics to cover during this training may include identifying hazards, emergency response procedures, and how to report accidents and incidents properly. Training can allow employees a higher level of understanding regarding how they can better protect the company from losses while at work.
Just like a company needs to evaluate its products and services, it should also assess its potential loss exposures. Evaluating loss exposure allows a company to make intelligent decisions, manage risk and reduce unnecessary stress in the workplace. Whether you’re looking to limit your exposure to losses now or want to be proactive in creating a better system for preventing failures before they occur, evaluating your negatives can help keep your business on the right path.