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Business , Columns

You snooze, you lose

Not preparing for a risk-management survey could cost you the chance to lower your insurance premiums. Not permitting a visit might mean a policy cancellation.

You snooze, you lose
A loss-control survey also can be an excellent opportunity to lower future insurance premiums.

Someone claiming to be from your insurance company calls to say he wants to schedule an on-site loss-control survey of your veterinary practice. Eight questions should immediately come to mind.

1. What is a loss-control survey?

Loss control is a risk-management technique that seeks to reduce the possibility of a loss or lessen the severity of an actual loss. The survey assesses a place of business to evaluate hazards and poor practices that might negatively affect the business or harm its employees.

2. Is the survey request legitimate?

Contact your insurance broker to confirm. Ask your broker to speak with the insurance company’s underwriters to determine what triggered the request.

3. Why would my insurer want an inspection?

An on-site loss-control survey typically is triggered for one of three reasons:

  • To confirm that underwriters correctly classified your business. That is, to ensure they are charging an adequate policy premium based on your specific exposure profile and risk-management practices.
  • To identify the presence and nature of safety or risk-mitigation deficits at a business that has a poor loss history.
  • You, the policyholder, requested it.

4. Must I comply with a survey request?

Yes. “Section III: Common Policy Conditions” in your business owners policy contains a subsection titled “Inspections and Surveys.” The wording effectively is, “We (the insurance company) have the right to make inspections and surveys at any time.”

Your failure to comply with a loss-control survey request provides legal grounds for the insurance company to cancel your policy. The company will assume that you are hiding one or more material exposures that put the insurer at an increased risk of paying higher-than-anticipated claims.

5. Why would I ever request an on-site inspection?

Think of it as a free resource for determining whether your risk-management program adequately mitigates injuries and property damage, both of which would negatively affect your business. Your productivity, financial status and ability to deliver quality medical services are all impacted when improper safety and operational protocols exist.

A loss-control survey also can be an excellent opportunity to lower future insurance premiums. After all, how much does your insurance company actually know about you and your business? The answer is, not much! Excluding what can be gleaned from your hospital’s physical address, age, construction type, building updates and loss history, your business is basically perceived as the same as every other provider of veterinary medical services.

But that’s not who you are. Every practice has a unique history and culture. A loss-control visit allows a practice owner to engage surveyors personally by educating them about who you are, what you do and how you do it. Consider the visit an opportunity to tell your story, show off your practice, highlight your team and promote your commitment to quality medicine, employee safety, and state and federal regulatory compliance.

6. How can I prepare for a survey?

First, request a list of documents to be reviewed during the visit, which typically lasts two hours. These likely will include all written policies and procedures under your regulatory and risk-management program. Specific items might include job descriptions, hiring and corrective-action procedures, background checks, safety training records and protocols, Occupational Safety and Health Administration forms, return-to-work protocols, and driver safety and facility maintenance programs. Formalized facility maintenance protocols and service contracts are an important but often overlooked aspect of an overall risk management program.

Surveyors also might ask about:

  • Fire protection equipment, such as extinguishers, sprinklers and an alarm system.
  • Computer equipment and network support, including cyberprotection.
  • Diagnostic and therapeutic equipment, such as CT, MRI, radiography, laser and laboratory.
  • Building and property maintenance, including the heating, ventilation and air conditioning system, roof, parking lot, and trees and brush.
  • Security and surveillance equipment, such as burglar alarms and video cameras.

Second, conduct a pre-visit team meeting. Make sure everyone understands the purpose and value of the loss-control survey. Encourage everyone to be friendly and respectful. Loss-control consultants understand that they are not typically perceived as invited guests but rather as necessary distractions to be tolerated.

Third, ensure that the appropriate people are available during the inspection and that all participating personnel understand the importance of providing a complete and accurate picture of your practice’s overall operation.

Finally, recognize that loss-control consultants are highly trained, certified and licensed professionals who have conducted hundreds, if not thousands, of on-site inspections at a diverse array of businesses and industries. Attempts to hide or misdirect material information will not go unnoticed.

7. What should I do during the survey?

Take it seriously, and be present in both mind and body. Don’t attempt to rush the inspection. Allocate as much time as necessary for the consultant to do a complete evaluation. This is your one chance to make a positive impression, so take full advantage. Also, be welcoming. Make the surveyors feel at home. Veterinary professionals are thoughtful, compassionate and caring by nature, so display those qualities during the visit.

The person most familiar with a specific area of the practice should provide the requested information to the loss-control inspector. In some instances, the person is the owner or practice manager. In other cases, multiple individuals might divide responsibilities. For example, the human resources expert should provide information on hiring and disciplinary procedures. The person responsible for property and equipment maintenance should handle those aspects. The person in charge of hospital operations should lead the hospital tour and address questions about animal handling and equipment use.

Understand that any ambiguity could lead to incorrect assumptions being made by the consultant and ultimately the insurance company. Take the opportunity to ask questions and discuss ideas. Most loss-control consultants welcome interaction after an on-site survey when they think their insights and expertise are valued.

8. What should I expect after the survey?

Look for a written summary within two weeks and a list of essential or nonessential recommendations. Be advised that the insurance company will require all essential fixes to be made and documented. I strongly recommend that all nonessential recommendations be addressed.

If you think a recommendation is unreasonable, don’t ignore it. Talk with the consultant about alternatives. Complying with all recommendations will go a long way toward lowering your insurance premiums.

Protect & Defend columnist Dr. Ed Branam is veterinary and animal services program manager for Safehold Special Risk Inc.

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