ISAD 34 Loss Prevention 02june2023

Loss control is a risk management technique that seeks
Loss to reduce the possibility that a loss will occur and reduce
the severity of those that do occur. A loss control
Prevention program should help reduce claims, and insurance
companies reduce losses through safety and risk
management information and services.
Prof. Junnel D. Espedido, MMSDA, RCrim, CSP
02 June 2023
https://www.google.com/search?q=loss+control+management&rlz=1C1GC
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✓ Helps ensure safety workers,
equipment and the environment
✓ Helps minimize accident rate and its
severity
✓ Prevent or minimize Insurance claims
✓ Enhance production
Importance Of Loss ✓ Improves workers efficiency
Prevention ✓ Boost worker’s job satisfaction
✓ Give organization competitive edge in
business
✓ Reduce workers turn over
✓ Reduce insurance premium
✓ Boost profit, etc.
https://hsewatch.com/loss-prevention/
Duties
1. Conducts loss prevention surveys / physical inspections of
commercial accounts.
2. Provides underwriters with an accurate description of the
physical and operational details of an insured.
Duties And 3. Identifies hazards and potential loss exposures and makes
Qualification Of A
recommendations to eliminate or reduce the potential loss.
4. Consults with underwriters and other staff regarding account
Loss Preventive / line-of-business acceptability, exposures and controls

pertinent to the various lines of business.
Specialist 5. Assists underwriters and other staff relative to account
operations, exposures, construction and protection.
6. Conducts accident investigation and loss analysis to identify
causes.
7. Employs effective sales and communication skills to achieve
compliance with recommendations and provides safety and /
or supervisory training to insureds.
Duties
8. Conducts joint marketing presentations, in conjunction with
Underwriting, Claims and Marketing, to accounts and agents.
9. Maintains specialized knowledge of company / department
manuals and procedures, and relevant Federal, State and
Duties And other pertinent codes and regulations applicable to Property,
Qualification Of A
Liability and Casualty lines of coverage.
10. Provides technical advice to lower level positions and other
Loss Preventive functional areas. May review the work of and / or assist in
training new employees.
Specialist 11. May lead the work of others (mentors, prioritizes, delegates
and reviews assignments).
12. May have responsibility for the performance and coaching of
staff and may have a participatory role in decisions regarding
development, hiring, firing, performance management, pay
increases, etc., for direct reports.
13. Performs other duties as assigned.
Qualifications
✓ Bachelor’s Degree or equivalent experience

✓ 5 or more years of related experience.
Duties And Certification in area of chosen expertise
may be required; appropriate certifications
Qualification Of A could include Certified Safety Professional
Loss Preventive (CSP), Certified Fire Protection Specialist
Specialist (CFPS), Associate Risk Management (ARM),
Certified Safety and Health Management
(CSHMS), Associate Loss Control
Management (ALCM) or Occupational
Health and Safety Technician (OHST).
✓ A commitment to loss prevention rather than the traditional
safety approach.
✓ An irreverent attitude towards some of the established views
and customs of many safety professionals. See, for example,
the lost time accident rate and human failure. In safety, as
everywhere else, it is no bad thing to question the accepted
wisdom from time to time. Most of what we have learned is
good, sound stuff but there is some chaff amongst the wheat.
✓ A belief that we know the answers to most of our problems
A. Safety Aspect but lack the win to apply the knowledge we have. See, for
example, philosophers* stone and production or safety?
✓ A belief that many of our problems are older than we think
and that solutions have been known for a long time.
✓ A preference for specific rather than general advice. See
attitude and policy. The historian Barbara Tuchman writes,
*When I come across a generalization unsupported by an
illustration I am instantly on my guard; my reaction is show
me.'
file:///C:/Users/jdespedido/Downloads/Critical_Aspec
ts_of_Safety_and_Loss_Prev.pdf
Abdication, management by
We have heard of management by delegation,

management by participation, and management by
exception. More common but less often mentioned is
management by abdication. This is illustrated by
accident reports which say that the accident was due
A. Safety Aspect to human failure and that the injured man should take
more care; this does nothing to prevent the accident
from happening again and is merely an abdication of
management responsibility. In some factories over
50%, sometimes over 80%, of the accidents that occur
are said to be due to human failure. In other factories,
it is 10%. There is no difference in the accidents, only
in the managers. Another example of management by
abdication is turning a blind eye.
Abdication, management by
We have heard of management by delegation,
management by participation, and management by
exception. More common but less often mentioned is
management by abdication. This is illustrated by
accident reports which say that the accident was due
to human failure and that the injured man should take
A. Safety Aspect more care; this does nothing to prevent the accident
from happening again and is merely an abdication of
management responsibility. In some factories over
50%, sometimes over 80%, of the accidents that occur
are said to be due to human failure. In other factories,
it is 10%. There is no difference in the accidents, only
in the managers. Another example of management by
abdication is turning a blind eye.
Acceptable risk
A phrase used, mainly by engineers, to describe a risk which is so
small, compared with all the other risks to which we are exposed,
that we would not be justified in using our resources of time and
money to reduce it even further.
However, the phrase is best avoided when talking to a wider
audience as it may cause them to switch off. 'What right have
you', they may say, *to decide what risk is acceptable to me?' and,
of course, we have no right to decide what risk is acceptable to
A. Safety Aspect others. We should never knowingly fail to act when someone else
is at risk but we cannot do everything at once. We have to do
some things first and others later so we should talk about
priorities rather than acceptable risks. Everybody has problems
with priorities and if we talk about them we are more Ukely to
keep the attention of our audience.
The phrase 'tolerable risk' may be more acceptable than
'acceptable risk' and is used in the official UK publication. The
Tolerability of Risk from Nuclear Power Stations
Accident
An accident is often defined as something that happens by
chance and is beyond control. If this is so, then there are
very few, if any, accidents in industry (or on the roads or in
the home). Most accidents are predictable. I know that
during the coming year, in every large chemical works and in
many small ones, a tank will be sucked in, a tanker will be
overfilled and another will drive away before the filling or
emptying hose has been disconnected. A man will be
A. Safety Aspect injured while disconnecting a hose and someone will open
up the wrong pipelined I do not know exactly when or
where but I am sure these accidents will occur. More
serious accidents are also predictable but they occur less
often. Most accidents are preventable. We know how to
prevent them or someone does if we do not but we lack
the will to do so, or to find out how to do so. We cannot
make gold from lead because we do not know how. In
contrast, accidents do not occur because we lack knowledge
file:///C:/Users/jdespedido/Downloads/Critical_Aspec but because we lack energy, drive and commitment.
Acts of God
This phrase is used to describe natural phenomena such as
lightning, earthquakes and floods. It is an unfortunate expression
which we should avoid, as it implies that we can do nothing about
them. However, to quote from a book on natural disasters:
Some disasters (flood, drought, famine) are caused more by
environmental and resource mismanagement than by too much
or too little rainfall. The impact of other disasters, which are
triggered by acts of nature (earthquake, volcano, hurricane) are
A. Safety Aspect magnified by unwise human actions.
Humans can make land prone to flooding by removing the trees
and other vegetation which absorb this water.
Humans can make land more drought prone by removing the
vegetation and soil systems which absorb and store water .
In other disasters, such as cyclones and tsunamis, humans can
increase their vulnerability by destroying bits of their natural
environment which may act as buffers to these extreme natural
forces. Such acts include destroying reefs, cutting mangrove
forest and clearing inland forests.
Assessment
After we have identified the hazards on a new or existing facility,
using one or more of the methods described under identification, we
have to assess them, that is, decide whether they are so large that we
ought to remove them (or protect people from their consequences)
or so trivial or improbable, compared with all the other risks around
us, that we can leave them alone, at least for the time being.
Sometimes the answer is obvious. Sometimes our experience or a
code of practice, even 'gut feel', may tell us what to do. Sometimes
the answer is not obvious, we have no experience, there is no code
A. Safety Aspect
and the arguments seem finely balanced. It may then be useful to use
quantitative hazard analysis to work out the probability that there
will be an accident and the size of the consequences and to compare
the results with a target or criterion.
The biggest errors made in hazard assessment are not in the
assessment itself but in the preliminary identification. People spend
time and effort assessing hazards which have been brought to their
attention, by an accident or in other ways, and fail to realize that
there are greater hazards which ought to be dealt with first. Before
assessing hazards we should ask , 'Are we sure that we have
identified all the major hazards and all the ways in which they can
file:///C:/Users/jdespedido/Downloads/Critical_Aspec occur?'
Communication
In a small organization everyone knows what everyone else is
doing without making any special effort. In a large organization
this is not the case; systems have to be set up so that people are
told at least what they
need to know. These systems do not always work very weU, so far
as as safety is concerned. An accident in one factory or
department has lessons for others. Often the right people are not
told, or do not get the message or soon forget.
A. Safety Aspect If they do not get the message, perhaps it is not clear. Often the
essential message is lost inside a mass of detail, of no interest to
other factories or departments. The safety professional should
not just circulate an accident report as it stands but should pull
out the essential messages and rewrite them. His readers are
busy people who will look at his reports in odd moments so he
should write clearly, so that 'He who runs may read', not so that
he who reads will run away. We should give our safety bulletins as
much care, in preparation and presentation, as we give our sales
literature.
Complacency
When there have been no accidents for some time people
become complacent, relax precautions and an accident often
occurs. During the 1939-45 war a factory produced a very toxic
chemical. When accidents were steady at a moderate level, the
managers were happy. When the accidents were very few and far
between they got worried. Experience had shown that people
became careless and then there would be a sudden jump to one
or more serious accidents.
Today we would not, of course, try to steady out accidents at a
A. Safety Aspect moderate rate in order to keep people alert. We would try to
make the accidents as few as possible and would try to keep
people alert in other ways. For example, by reminding them of
accidents that had happened in the past this can be done by
discussing them regularly and describing them in safety bulletins
(see communication) and by involving people in audits of the
workplace and of operating procedures. At least that is what we
should do; do we always do it? Left to themselves people have
short memories, but there is a lot we can do to remind them of
the hazards around them and keep them alert.
Damage control
Damage control (or total loss control) is a systematic
attempt to record, cost and investigate all forms of
loss: damage to plant and materials, consequential
losses and plant upset as well as injuries. Often only
A. Safety Aspect the injuries are followed up and we fail to realize the
size of the company's financial loss or the number of
accidents that nearly happened. Directors might be
more effective in preventing accidents if they kept
their eyes on the profits and practiced damage control
as well as taking a humanitarian interest in injuries.
Dangerous occurrence
Accidents which do not cause death or injury, only
damage to plant or loss of production, are often called
dangerous occurrences, dangerous incidents or near-
misses and in some companies the safety professionals
take little interest in them; this is a mistake. The next
time the dangerous incident occurs someone may be
killed or injured and, in any case, damage and loss of
profit should be avoided. In loss prevention and
A. Safety Aspect damage control attention is paid to all accidents.
If those concerned had learnt from dangerous
occurrences the disaster at Aberfan would not have
occurred.
It is sometimes said that that dangerous occurrences
will never be reported unless the damage is major, and
that it is, therefore, impossible to analyze them and
learn from them in the same way as we analyze and
learn from accidents that cause injury.
Drugs
No study of the extent of drug taking in the
industry or its effects on safety. The general
view is that it is less of a problem than alcohol,
but growing.
A. Safety Aspect Κ. Hayton gives some advice on recognizing
signs of drug taking and responding to them:
We should avoid moral judgements; a decision
to intervene should be based solely on
deteriorating performance i n the job; if we
intervene early, chances of recovery are better.
Dusts and powders
Many dusts are explosive. To prevent explosions we can :
• Use nonexplosive or less explosive dust instead.
• Use the dust in a nonexplosive or less explosive form. For
example, some powdered dyestuff s can be handled as slurries, an
example of attenuation.
• Eliminate all sources of ignition. Dusts have higher ignition
energies than gases so this policy, impracticable for gases, is
sometimes followed. However, it is difficult to be certain that all
sources of ignition have been eliminated, especially if there are
A. Safety Aspect
any moving parts. Dusts, like gases, can be ignited by static
electricity.
• Use explosion venting; it is widely used .
• Inert wit h nitrogen or other inert gas .
Dust explosions can occur in equipment and in buildings. A
feature of explosions in buildings is that very often a small
explosion disturbs dust which has settled and this dust then
explodes causing far more damage than the original explosion.
Buildings in which dust s are handled should therefore be
designed so that surfaces on which dust can settle are as few as
possible and access should be provided so that those surfaces
ts_of_Safety_and_Loss_Prev.pdf that cannot be eliminated can be kept clean.
Explosions
Most of the materials handled in the oil and
chemical industries will not burn or explode by
themselves but only when mixed with air (or
oxygen) in certain proportions. To speak of a
petrol tank o r tanker as a bomb is therefore
absurd. For an explosion to occur either air has
A. Safety Aspect to enter the vessel or the contents have to leak
out, vaporize, mix with air, and be ignited.
In the open air several tonnes, usually several
tens of tonnes, of explosive material, are
usually necessary for an explosion but indoors
much less is sufficient. Flammable liquid and
gases should therefore be handled in the open
file:///C:/Users/jdespedido/Downloads/Critical_Aspec air, whenever possible.
Fire Hazard
A. Safety Aspect
Many people fail to follow up on their actions to see if
they had the desired effect. Magistrates, for their
clients, responded to treatment or continued in a life
of crime.
A. Safety Aspect
The goal of physical protection of assets is to
reduce and/or limit the exposure of assets to
threats and vulnerabilities by developing
appropriate protective measures. These measures
are intended to reduce the likelihood and
consequences of a disruptive event, by preventive
and preemptive measures and/or effective response
measures for recovery to a predetermined level of
performance.
B. Security Aspect
An acceptable level of protection is achieved by
developing, designing, deploying, and evaluating a
fit-for-purpose physical asset protection program
based on the organization’s acceptable level of risk.
The organizations should establish a physical asset
protection (PAP) program following the guidance
based on the plan-do-check-act (PDCA) model, as
follows:
Plan
(establish the program)
Establish management policy, objectives, processes, and
procedures relevant to managing risks and improving response
and recovery processes that deliver results in accordance with
the organization's strategic needs.
Do
(implement and operate the program)
Implement and operate the program policy, controls, processes,
and procedures.
B. Security Aspect Check

(monitor and review the program)
Monitor, assess, measure and review performance against
program policy, objectives, and practical experience; report the
results to management for review; and determine and authorize
actions for remediation and improvement.
Act
(maintain and improve the program)
Take corrective and preventive actions, based on the results of
the internal program audit and management review, re-
appraising the scope of the PAP program policy and objectives
to achieve continual improvement of the program.
Quantifying and Prioritizing
Loss Potential
There is no such thing as a

“cookbook” receipt solution to
B. Security Aspect security problems.
The most effective programs are
tailor-made.
—John J. Janson, Jr. PhD, CPP
(deceased)
Risk
Risk assessment analysis is a rational

and orderly approach as well as a
C. Risks, Perils, comprehensive solution to problem
and Hazards identification and probability
determination. . . While it is not an
exact science, it is, nevertheless…
the art of defining probability in a
fairly precise manner.
—James F. Broder, CFE, CPP, FACFE
What Is Risk?
Risk is associated with virtually every activity one can
imagine, but for the purpose of this text, we limit the
meaning of the word risk to the uncertainty of financial loss,
the variations between actual and expected results, or the
probability that a loss has occurred or will occur. In the
insurance industry, risk is also used to mean “the thing
insured”—for example, the XYZ Company is the risk.
C. Risks, Perils, Additionally, risk can mean the possible occurrence of an
undesirable event.
and Hazards Risk should not be confused with perils, which are the causes
of risk—such things as fire, flood, and earthquake. Nor should
risk be confused with a hazard, which is a contributing factor
to a peril. Almost anything can be a hazard—a loaded gun, a
bottle of caustic acid, a bunch of oily rags, or a warehouse
used for storing highly flammable products, as an example.
The end result of risk is loss or a decrease in value.
Risks are generally classified as “speculative” (the difference
between loss and gain— for example, the risk in gambling)
and “pure risk,” a loss/no-loss situation, to which insurance
generally applies.
Role of Management in Risk Analysis
The success of any risk analysis undertaking is
contingent on the role top management plays in
the project. Management must support the
project and express this support to all levels of
the organization. Management must define the
C. Risks, Perils, purpose and the scope of the risk assessment. It
and Hazards must select a qualified team and formally
delegate the authority necessary to accomplish
the mission. Finally, management must review
the team’s findings, decide which
recommendations need to be implemented, and
then decide on and establish the order of
priorities for implementing the
recommendations made in the survey report.
Risk Assessment
Risk assessment analysis is a rational and
orderly approach, as well as a comprehensive
solution, to problem identification and
probability determination. It is also a method
C. Risks, Perils, for estimating the expected loss from the
and Hazards occurrence of an adverse event. The key word
here is “estimating” because risk analysis will
never be precise methodology; remember, we
are discussing probabilities. Nevertheless, the
answer to most, if not all, questions regarding
one’s security exposures can be determined by a
detailed risk assessment analysis.
✓ Managing risk is part of governance and leadership, and
is fundamental to how the organization is managed at all
levels. It contributes to the improvement of
management systems.
✓ Managing risk is part of all activities associated with an
organization and includes interaction with stakeholders.
✓ Managing risk considers the external and internal context
of the organization, including human behavior and
C. Risks, Perils, cultural factors.
and Hazards

ISAD 34 Loss Prevention 02june2023

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Loss control is a risk management technique that seeks

Prof. Junnel D. Espedido, MMSDA, RCrim, CSP

Loss Preventive / line-of-business acceptability, exposures and controls

✓ Bachelor’s Degree or equivalent experience

We have heard of management by delegation,

B. Security Aspect Check

There is no such thing as a

Risk assessment analysis is a rational

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