How a Loss Prevention Program can Help Save Your Business
Preventing a loss may seem like common sense, but there’s more to it than you might imagine. When it comes to loss prevention strategy, locking up after the workday is just the tip of the iceberg.
Smart business means doing your best to do things right the first time. Comprehensive loss prevention programs begin with good risk management, and though this will demand some investment, consider it a vital expense for the long-term success of your business.
Covering all your bases
Loss prevention refers to all the steps you take to prevent a loss, including how you protect your workplace and how you equip your employees. Updating or servicing equipment to improve safety and efficiency, installing a monitored alarm system and equipping your buildings with sprinkler systems are excellent ways to help defend your physical assets. However, providing safety manuals and guidelines to staff, along with hands-on training sessions on how to properly use the equipment – and what to do in case of a malfunction – are equally important loss prevention measures.
Costs that loss prevention can help you avoid
There are insured and uninsured costs that can come with a loss. In the case of an insured loss, business operations can still be disrupted despite the fact that the policy fully covers the loss. For instance, a retail store that suffers property and product damage due to a flood would receive compensation for that damage, but the temporary closure would still be disruptive and stressful.
In contrast, uninsured costs aren’t covered by insurance. This would apply to any business that simply doesn’t have insurance coverage, but uninsured costs can also affect insured businesses. For example, they can come in the form of deductibles, equipment replacement due to age or wear and tear, setting up in temporary locations, increased insurance premiums and hiring or training replacement employees.
Uninsured costs are generally much higher than insurance payouts after a loss. For many, the uninsured loss sets them back thousands more than the loss itself, given how much time it will take to recoup those out-of-pocket costs. Every functional business operation should contribute toward profit, and in the case of loss prevention, planning ahead can help save your bottom line.
Loss prevention program benefits
The most obvious return from an effective loss prevention program is no loss at all. But consider these other ways that a sound strategy can protect and strengthen your business:
- Guidance for employees. Properly trained employees who understand workplace hazards are often more efficient employees. Careful and knowledgeable employees are able to perform their work more effectively, and the rise in productivity will very likely increase profits.
- Hazard spotting. Loss prevention programs that include regular inspections, quality control and procedures to handle accidents or disruptions will uncover more potential issues that you can mitigate before they lead to a loss.
- Learning opportunities. Near misses and minor hiccups can seem like lucky breaks, but if you treat them as important lessons, your entire workforce can benefit and more losses can be averted.
- Emergency procedures. Emergency response training equips employees to act quickly, carefully and accurately during an accident. This competency can make the difference between averting a crisis and suffering a substantial loss.
- Legislative compliance. Keeping your daily operations in line with all safety legislation may minimize your workers’ compensation dues and help you avoid penalties or punitive damages for accidents.
A loss prevention program should be a group effort: when employees at all levels take part in creating, maintaining and enforcing the program, your chances of avoiding a loss and building success can increase substantially!