8 Risk-Management Resolutions for Small Businesses in 2012

A new year is right around the corner, and with each January we make resolutions. Here are eight top risk management resolutions you should make for your business for 2012.

1. Find a broker who understands your business needs. If your business is booming and we know some sectors are recovering or poised to recover, does your agent or broker thoroughly understand your market niche? Perhaps you are operating without critical coverages.

I recently spoke with an Arizona plumbing company owner with annual revenues of $300,000. He operates without workers’ compensation coverage, naively hoping if one of his workers is injured his “independent contractor” story will stand. It won’t. He needs an insurance broker with a deep understanding of middle market risks.

2. Beef up your training. Budget about three percent of your gross revenue on training. This can be technical or safety training, soft skills instruction, or sales training. Any form of employee education that produces a return on investment, improves productivity, or reduces risk will pay dividends.

3. Craft a return-to-work policy. If you don’t already have one, implement a stay-at-work/return-to-work policy. Then be sure that your supervisors will implement and support the program. Also ensure that beginning with employee orientation, workers understand that your organization expects them to work in a modified-duty position if they are injured.

4. Track your losses. If you’re not already getting them, ask for monthly loss runs on your open, closed, and reopened claims. Review them, don’t just let them sit. You can also ask for specialized reports, for example claims where no payments have been made for 90 days or where reserves have increased over a certain threshold.

If you have questions, call the adjuster assigned to the injury to determine the status of the injury and the adjuster’s plan of action to close the file.

5. Pick a medical provider. Pre-select a medical provider to treat your employees if they are injured on the job. A serious injury usually requires an emergency room visit; however, the majority of injuries can be treated with an urgent care or primary care visit. Developing a relationship with a local physician who specializes in occupational injuries can save your company a lot of money.

6. Ask your insurance carrier for safety assistance. Insurance companies have loss prevention members on staff, usually, and safety training videos and other communication that can help you keep employees safe. The cost for these services is built into your premium, so not using these services wastes your money.

7. Improve your injury reporting procedure. Late reports of injury exponentially increase claims costs. They also destroy any chance you have of properly investigating the accident scene. Adjusters often find when they investigate a claim that supervisors knew about the injury, but thought it was “no big deal” or just hadn’t reported it yet.

Any incident that occurs at work can develop into a “big deal.” In fact, it’s often those unreported, unwitnessed accidents that drive your claims costs through the roof.

8. Address employee turnover. Every company should treat its employees well. However, if your company relies on technical talent that is hard to replace, considering how you treat your employees is imperative. Recent human resources surveys show employee flight risk at up to an astounding 82 percent.

You may think you are treating your employees well, but they may not agree -- and you may never know until they hand you their resignation. You must learn the real reasons people leave; don’t remain ignorant about why people bail out. Once they decide to leave, it is usually too late to rectify problems.

According to human resource experts, the number one reason people quit is conflict with or lack of confidence in their immediate supervisors. Know how your employees view their supervisors. Instituting 360- degree performance reviews can help.

Next year, like the years since 2008, will continue to challenge small business owners. Taking even incremental steps toward reducing risks will help brighten your profits in 2012.