Preventing Assess Losses

State employees have an ethical and legal responsibility to protect state assets in their custody and control. Often we focus on the major, high cost property losses like building fires. But small property losses occur more frequently and many of them are preventable! All losses are not covered by insurance and can directly impact your budget. Even if they are covered, your agency generally incurs a deductible of some sort.

Steps for Loss Prevention

Learn from the past. Ask Risk Management for your agency's prior loss experience. What types of losses have you experienced?

  • Losses caused by:
    1. Persons. Such as: theft; vandalism; breakage; vehicle collisions; fraud; embezzlement, pollution, arson.
    2. Acts of nature. Such as: fire; water leaks or seepage; flood; wind; power interruption, landslide, mold growth.
    3. Errors and Omissions. Things done or not done that result in a loss.
  • Type of property lost or damaged:
    1. Vehicles, boats, aircraft.
    2. Buildings or other structures.
    3. Property: landscaping; parking lots, benches, signs.
    4. Building contents: office furnishings; computers; servers; phone systems.
    5. Field Equipment: lap top computers; scientific equipment; cameras; palm pilots.
    6. Cash and securities: negotiable notes; bonds; checks.
  • Where are the losses coming from?
    1. Particular programs or activities: training, use by others such as clients or the public; displays.
    2. Geographic locations: urban vs. rural; particular offices or cities.
    3. Category of user: employee or staff; volunteer; trainee, client, student/intern, contractor or temporary service employee.

Then use incident analysis techniques to determine system issues. Investigations gather and document the facts. The next step is to analyze the evidence. This allows you to determine all the things that led up to the incident or loss. Not to place fault or blame but to make improvements.

  • Do you regularly investigate each property loss?
  • Do you document facts and establish corrections or future improvement activities?
  • What systems do you analyze?
    1. People
    2. Environment
    3. Equipment
    4. Management
  • Do you follow-up to be sure improvements are implemented?
  • Do you track and address repetitive losses?

Accountability for loss prevention. Do employees know what they are supposed to do it? Do they know how? Do they get any feedback?

  • Who is responsible to investigate losses, analyze causes and implement improvements?
  • Do they know how to investigate, analyze and improve?
  • Do they have the resources, authority and executive backing to make needed changes?
  • Who pays for the loss? Who pays for the improvements?
  • How does your agency recognize good performance for loss prevention or mitigation?

Do you have specific programs to prevent asset losses? Your immediate goal is to prevent loss frequency since you pay from the first dollar of loss up to your deductible.

  • Loss prevention is specific to the type of loss. Remember you reviewed your data earlier. For example;
    1. Fire prevention: control ignition sources or fuel; suppression systems.
    2. Water Incursion: prevent leaks from roofs, windows, faucets, storage tanks, piping.
    3. Power Fluctuations: power conditioning, reliable sources.
    4. Theft and Vandalism: security protocols, background checks, tools to tie down or lock up equipment or property that is portable and easily stolen.
    5. Damage and Breakage: preventive maintenance, user instructions and training, familiarity with equipment.
    6. Exceptional items: special programs to protect one of a kind, fine art, historic properties, cash, securities.
    7. Vehicles: passenger cars, vans, trucks, specialty vehicles.
  • Loss mitigation. Can you respond quickly to a minor problem to prevent it from developing into a more costly loss? For example, boarding up a broken window to prevent water damage to the interior due to rain.
    1. Policies and procedures to guide and direct action.
    2. Effective, prompt reporting systems.
    3. Rapid response plans.

Contract, Warrantees and Agreements. These can be effective tools to transfer risk and recover losses. Conversely, they could make you responsible for someone else's negligence.

  • Do you hold people responsible to prevent or pay for a loss?
  • Do you require written agreements to protect vehicles, equipment or buildings used by others?
  • Do you follow requirements to be able to recover under warrantees?
  • Do people know their authority to sign contracts or agreements?
  • Are you able to recover losses from other funding sources, such as grants?

Subrogating or Recovering Costs. Through this process Risk Management can recover some of the loss from third parties who cause loss. You will need to help us establish that the other party is at fault.

  • Who is responsible to recover losses? Is a person assigned and trained?
  • Do you have a policy and procedures to guide recovery?
  • How do you account for recoveries? How is the recovery used?
  • Do you have procedures to preserve evidence or prove your loss?

Risk Management can insure your assets and can assist you in preventing losses, but each agency and state employee has a responsibility to protect the assets under their control.