Loss control activities of abusiness focus on finding and implementing solutions to reducethe probability of loss (loss prevention) and/or reduce the actualamount of loss (loss reduction), and therefore reduce thetotal cost of risk to maximize firm profitability.
Loss control techniques have beenwidely used in environmental loss prevention, catastrophic lossprevention, and employee-related risk management. Many firms faceloss exposures caused by using, storing, and transporting hazardousmaterials, caustic substances, gasses, acids, etc., and may haveunique issues posed by deployment of “greener†vehicle fleets usingCNG, LNG, and bio-fuel solutions. Catastrophic risks, such asearthquakes, tornado, hurricanes or big fire, also pose significantthreat to the property safety and business continuation for firms.Employee behavior-related risks and product safety are alsoimportant concern of corporate risk management.
Lack of effective loss control (suchas inadequate systems, inadequate standards, and inadequatecompliance with safety standards) may cause significant damage to afirm, such as injury costs, property damage, liability damage, badpress, lower sales, loss of employee morale, so on and so forth, asBritish Petroleum (BP) or Toyota had suffered in the past.
In this project, select an S&P 500company and analyze its loss control policies focusing on eitherenvironmental loss prevention, or catastrophic loss prevention, oremployee-related risk management.
Your analysis should address thefollowing questions in the least:
- How likely the firm is subject to catastrophic losses?
- Has the business suffered losses of the kind in the past?
- What losses could be caused to the firm if a catastrophic eventoccurs?
A. Direct Property Loss
B. Indirect (or consequential)Property Loss
C. Liability Loss
   D. PersonnelLoss
    E. Crime
    F. Other LossExposures
- What loss control activities has the firm implemented to reducethe loss?
- E.g. For Property loss control, comment on Facility design andconstruction, Automatic Sprinkler Protection, Preventativemaintenance, Equipment and Process controls and safeguards, HumanElement programs, Pre-incident planning and Business continuityplanning
- Proactive Safety procedures vs. Reactive Safety & Recoverypolicies
