Strengthen relationships with clients by connecting them with a risk-control resource like US-Reports
When they’ve exhausted their internal cost-reduction options, business owners often turn to their insurance agents for help with the bottom line. Trouble is, most insurance agents are neither qualified, authorized nor inclined to offer advice on taxes, accounting, or legal matters. What they can do, though, is provide access to resources to aid clients in the cost-cutting effort.
For example, insurance agents who have manufacturing clients can help those clients reduce their products liability exposures and workers compensation claims by hiring a risk control consultant to conduct an onsite assessment. “It’s a real value-add for agents to offer their clients these assessments,“ explains Dick Ryther, ARM, CSP, CPCU, Vice President, Risk Control Services, at US-Reports. “The assessment tools we have help mitigate losses, so insureds have more money to invest in their business.”
Regardless of their size or the type of products they manufacture, businesses do benefit from a risk-control assessment — especially if it results in fewer claims, Ryther adds.
“We cover safety training and specific industry standards. We review their complaint logs to check their follow-ups [and] we look at their product recall process. We examine how a product is identified, the quality control of the product and, if it is food, its labeling and shelf life,” he explains.
Founded close to 25 years ago and headquartered in Colorado, US-Reports has built a national business providing premium audits, inspections, and risk-control services within the commercial insurance industry. For an average fee of $500 (the exact cost depends on the size of the policy), a US-Reports consultant who’s been trained in the industry he/ she is assessing uses a standardized risk scoring system to evaluate an operation. This standardized system, the METHOD Assessment Tool™ or MAT for short, is built to remove subjectivity and inconsistency from evaluations.
“We offer a customized and automated report,” Ryther says.
Using MAT, US-Reports representatives can offer an in-depth assessment of the insured’s current health and safety best practices, which helps identify any weaknesses and failures inherent in an operations process, he explains. “We assess their management, their employee practices, their training, their hazards, their organized medical disability, and their data collection and record keeping.”
Risk-control consultants with industry-specific training are vital to US-Reports providing insureds with an assessment that they can use constructively — and one that may prevent future claims. The risk-control force that US-Reports deploys throughout the United States is full of seasoned consultants who are familiar with a wide variety of business operations, and with OSHA and other regulatory standards. They’re experienced working with local management groups to help safety departments implement and maintain effective workplace safety programs.
“Our consultants also make the difference because of their experience. Our people are very familiar with the businesses they service, “ Ryther says. “If we send people to a hospital, they know the hospital business. If they go to a food production plant, they know that business.”
US-Reports consultants are Certified Safety Professionals. Many are Associates in Risk Management or Associates in Loss Control Management. Others have college degrees in Safety Management.
As an agent, how do you spot a situation where an assessment from such an expert is in order? Here are some of the red flags Ryther suggests watching for in reviewing a manufacturing client’s policy:
- Has the product been redesigned, recalled or discontinued?
- Is there a known hazardous material or toxic substance contained in the finished product? Is the product a component of a larger product that has another end use?
- Are there possible abuses with the product?
- Could the product be substituted for a similar product? Is the quality of the production process correctly documented?
- Is the quality of the materials received from suppliers certified?
- Does the manufacturer have enough records to identify a product batch if it is recalled?
“These are just some of the risks that can drive up products liability claims,” Ryther notes. “Think about the guy who manufacturers a small component that goes into a larger part that goes into a car, or airplane, that may ultimately have a product failure. There is a lot of risk associated with that small component.”
Case in point: Ryther recalls a claim involving a business owner who made crowns and bridges for dentists.“ Part of the process involved baking porcelain onto gold to simulate the white portion of a tooth. After doing all the casting involved in making crowns and bridges, and baking on the porcelain, as the work cooled down all the porcelain began to crack. All the work for that day needed to be discarded.
“The ensuing investigation found that the manufacturer of the porcelain had not performed adequate quality control processes and had in fact put out some inferior porcelain that was the main cause of the porcelain cracking,” Ryther continues.“ Consequently, the porcelain manufacturer paid for the claims made against it by all who had the inferior porcelain. Had the manufacturer conducted a risk-control assessment, he could have discovered the problem before it was shipped to his customers.”
Underwriters, like agents, can benefit from US-Reports risk assessment services. For example, the individual loss-control representatives often differ in their approach based on their training. As a result, underwriters may have issues with the consistency of judgment or the reliability of standards used to assess each potential policy holder. However, the standardized risk scoring system used by US-Reports representatives helps overcome those potential pitfalls.
With reliable, consistent evaluations, underwriters are better able to apply risk selection and pricing models that will improve underwriting performance and profit. That, in turn, can lead to more effective use of finite loss-control resources, resulting in greater client satisfaction and retention for themselves and their agents.