S A F E T Y F I R S T B E C A U S E R E S U L T S C O U N T CTAV 2003 Expo Risk Management for Transit Operations

S A F E T Y F I R S T

B E C A U S E R E S U L T S C O U N T

CTAV 2003 Expo

Risk Management for Transit Operations

SafetyFirst & Selective

• Paul Farrell, CEO - SafetyFirst– 15 years – Insurance Industry, Loss

Control

• Selective and SafetyFirst have worked together for several years.

• SafetyFirst provides safety programs to Selective Policyholders

Overview of Session

• What is Risk Management?– Five Step Process– Practical Application for Transit Operations

• Resources for more insight

Risk Management

• Risk management is the method of dealing with uncertainty:– In your personal life & at home– In your business

• Risk management is the pursuit of control over those events we hope never happen, but could.

Risk Management

• We each practice risk management daily:– Retirement planning– How we drive (choosing route, seatbelts, etc.)– Car, home, life insurance– Managing investments with care– Planning for future– Learning from the past

Risk Management

• At work we see risk management:– Insurance– Proof of Insurance from others– Safety Programs– Hiring practices, audits, inspections– Review of past losses, crashes, injuries– Accident review boards

Lets define the process and look closer

Risk Management Process

• Five Step Process:1. Establish Context (Set Goals)

2. Identify Actual Risks/Threats

3. Analyze and Prioritize Risks/Threats

4. Select Plan and Implement

5. Monitor Effectiveness of Plan and Modify as Needed

Simple, Huh?

1. Establish context for concerns

• What are our goals for implementing a risk management program (“big picture goals”)?– Financial security– Free up resources for other business goals– Preserve goodwill in the community (credibility)– Minimize needless suffering from injury,

damages, business interruption

How would we define a “victory” in one year?

1. Establish context for concerns

• Specific examples from your company?

How do you safeguard your company?

–Safety Policy Statement

–Risk Management Policy

–Business Plan


• Four major categories:

– People

– Property

– Income

– Goodwill (sustain business through credibility)

(sustain business through economics)

(place to run business)

(make the business run)


• How do we identify risks?

• What is the process?– Surveys– Checklists– Questionnaires– Consultants


• People:– Employee Injuries? Customer Injuries?

• Vehicle Collisions• Falls (boarding), Falls on property (slip/trip)• Harassment, Employment Practices• Child endangerment

Hurt people lead to lawsuits


• Property (damage to or loss of):

– Buildings

– Computer Equipment, Communications

– Vehicles, parts, maintenance equipment

– Data, records, intellectual property (proprietary software, databases, etc.)

Property issues are typically infrequent


• Property (damage to or loss of):

– Property of others (in transit or stored)

– Highly specialized equipment

– Marine exposures (ferry?)

– Floods, Extreme Weather, etc.

Property issues are typically infrequent


• Income (unplanned reduction in income):

– Loss of grants, Contract cancellation

– Ridership losses due to terrorism threats

– Embezzlement, fraud, etc.

Income issues are generally unusual


• Goodwill (credibility):

– Unfavorable news coverage

– Reputation for collisions, or poor performance

– Employee morale leading to perceptions of poor performance among riders

Goodwill issues are potentially devastating

3. Evaluate and Prioritize Risk

• A question of likelihood and potential consequence:– Meteor collisions are devastating, but so

unlikely that we could spend our time elsewhere– How do we place proper emphasis on each

potential risk?

3. Evaluate and Prioritize Risk

• Study past losses and problems • Study the history of similar operations (trade

groups, associations, networking, journals)• Bring in consultants:

– Insurance agent– Insurance loss control staff– Transportation specialists (leasing

company,etc)

4. Select and Implement a Plan

• Avoidance

• Modification (or “Risk Control”)

• Retention

• Risk Sharing or Risk Transfer


• Avoidance:– The issue is likely to cause loss, the loss would

be consequential, no controls are practical and there is no opportunity to transfer or share the risk with someone else.

– Murphy's Law to the Extreme– “Just Don’t Do It”– Sometimes you walk away


• Modification:

• Can the situation be improved to lessen the likelihood or severity of the loss?– Safety programs– Hiring guidelines– Training for managers and staff– Education for customers?

We will revisit this issue later


• Retention (by design v. unintentional):– It may be efficient to take on the risk (or a

portion of the risk) directly• Deductibles• Self Insurance Fund

– Sometimes we take on risk without intending to do so (oops!)

• Coverage gaps• Pioneering new exposures

Consultant advice is helpful


• Risk Sharing or Transfer:– Insurance coverage is a form of risk sharing– Pay for a contract that covers some or most of

risk of loss– Sometimes contracts (other than insurance) can

be used to share risk• “Hold Harmless”

• Assumption of Liability

Contract review is vital

5. Monitor and Modify

• Is the plan working? – Are losses down?– Were deductibles placed at the right levels?

• How do you define a victory? (review your goals)

• Is the firm meeting it’s business objectives (have resources been deployed effectively?)

Clearly, if the plan is not working – Try Again


• Does the plan need to be updated to reflect:– new operations?– changes in case law?– changes in regulations?– changes in insurance availability (& price)?

The world never stops changing


• Any examples or experiences from your company to share with the group?

The world never stops changing

Remainder of Session

• Resources for more help on “Risk Management”

• If time allows, conduct brief reviews on:– General Safety (property, work comp)– Fleet Safety (drivers, crashes, passengers)

Help Me, Please!

• Risk Management Resource Center

• Queensland Government Risk Management Page

• Public Entity Risk Institute

• Nonprofit Risk Management Center

• Computer Assisted Risk Evaluation System (CARES)

The web links are on the supplement

Help Me, Please!

• Sample documents

• Email lists, bulletin boards

• Templates

• Training sessions

• Books

• Consultants


Help Me, Please!

• CARES – on the internet

• Intended for non-profit, but…

• Free to try out, VERY thorough

• Low cost to subscribe

• Some sections more critical than others

• Worth taking an hour to review in detail


Help Me, Please!

• The Risk and Insurance Management Society (RIMS)

• Free for non-member access

• Allows you to view and download conference slides, handouts, outlines

• ACTIVE email list (daily digest)


Help Me, Please!

• Insurance carrier and agent/broker as a “pre-paid consultant”

• Commitment beyond just paying claims

• If they can help you, they benefit, too! (this is a GOOD thing for both firms)

• “Loss Control” brings experience from other, similar firms (not a “safety slave”)

Hey, I used to be a Loss Control guru!

Help Me, Please!

• The folks in this room, and the staff of CTAV can help you, too!

• Benchmarking or simple discussions about past problems and how they were dealt with can make a big difference

Help Me, Please!

• What about SafetyFirst? – Watch out… here comes the “advertisement”

• We help fleets spot risk taking and deal with it quickly

• The program works very well

• Usually insurance carriers pay for it

• See me if you’d like to learn more.

That wasn’t too painful, was it?

Thank You For Your Interest

SafetyFirst and Insurance Providers Working Together to Improve Results for Everyone

Property Safety

• Fire controls:– Ignition sources (smoking, welding, electrical)– Fuel (paper, boxes, paint, junk)

• Suppression/Notification– Extinguishers– Sprinklers– Alarm systems (notifies who?)

Premises Safety

• Visitor controls (security)

• Slips/Falls (housekeeping)

• Attractive Nuisance (kids)

• Audits/Inspections

Employee Safety

• Do we have another couple hours?

• What are YOUR biggest issues?

• What resources have you discovered that help you out?

Fleet Safety

• Fleet Safety Components:– Driver Recruiting, Screening, Hiring– Regulatory compliance– Driver Training (safety awareness)– Maintain tenure (reduce turnover)– Monitor performance for results

The “Current” System

Drug Testing

Driver Screening

Background Checks

Training Events

Accident Reporting

Safety Dept. HR Dept. Compliance Dept. Training Dept.

Making Sense of It All

Drug Testing

Driver Screening

Background Checks

Training Events

Accident Reporting

Safety Dept. HR Dept. Compliance Dept. Training Dept.

Data Supplier

Insurance Carrier

Training Supplier

Magic, Black Box Database?

Fleet Safety

• Where do most collisions come from?– The “other” driver– Your operator

• Roughly 90% of all collisions due to driver behaviors, choices, actions

• The trick is knowing who needs help, before they have a collision

Use every tool available – try new things, too

Thank You For Your Interest

SafetyFirst and Insurance Providers Working Together to Improve Results for Everyone

Documents

S A F E T Y F I R S T B E C A U S E R E S U L T S C O U N T CTAV 2003 Expo Risk Management for Transit Operations