On days when rain or snow is forecast for the Texas panhandle region, the managers of all 66 Toot ‘n Totum convenience stores receive early-morning e-mails reminding them to put out “wet floor” signs, mop up any water and do whatever else might be necessary to prevent slips and falls.
The e-mail reminder is a relatively minor item, but it serves to illustrate one of the prime truisms of effective risk-management: little things mean a lot. It’s just one of many little things adding up to a comprehensive risk management program that has helped the Amarillo, Texas-based c-store chain reduce accidents, injuries, thefts and other losses, while reaping significant savings on insurance and workers’ compensation costs.
Obviously, not all c-store companies are large enough to have a full-time director of risk management. Still, Toot ‘n Totum’s comprehensive approach to loss control is a useful example for anyone hoping to achieve similar results.
“They’re very proactive; they do a tremendous amount of prevention,” said risk consultant Daniel Romo of insurancebroker HRH International, which provides coverage to Toot ‘n Totum. “They don’t just work on the back end. They have a lot of training and store inspections integrated into their daytoday function. They bring in district and regional managers for training pretty regularly and they, in turn, go out and execute. And they have good internal communication with all of the departments; they’re all hearing the same things, so they work well as a team.”
The safety audit is one of Toot ‘n Totum’s most useful tools, according toAndy Andrieu, the company’s director of human resources and risk management.”We track everything that happens, identify common denominators (causative factors)and present a report at the end of the year,” he said. “Then we develop risk-managementpolicies and procedures based on that.”
Along with the internal measures, Romo’s input is also important to identify problem areas and corrective measures, Andrieu noted. “It’s very effective to have someone from the outside who has an eye on your company, because they have a risk-management ‘eye’ and can see specific things we don’t pick up,” he said.
Romo developed a four-page list of recommended improvementsto reduce hazards, ranging from covering exposed wiring in store back rooms,to making sure lubecenter employees wear safety glasses while working.
New employees complete a computer-based safety training course and are given a copy of the company safety manual. Twice a year, Toot ‘n Totum also conducts a company-wide safety audit for all employees.
“The district managers go over each item and post copies in stores listing everything that needs to be corrected,” Andrieu said.
Toot ‘n Totum’s efforts to prevent losses also include a negative incentive. In the event of an occupational injury caused by negligence or carelessness, costs are subtracted from store manager commissions. “We want to make sure efforts are being made to prevent accidents,” Andrieu explained.
Of course, not all c-store companies are large enough to have a staff positiondedicated solely to risk management. Fortunately, having a full-time risk managerisn’t essential to achieve positive results in controlling losses, accordingto Dave Cameron, Federated Insurance’s risk manager for national accounts.
In some small companies, which don’t have a formal human resources department, regional managers or store managers might handle the risk management function. “The key is to have someone who is a designated risk manager, with the authority and support from management needed to do the job,” Cameron said.
At its Learning Center in Owatonna, Minn., Federated offers a free, two-day “Designated Risk Managers Training Program for C-Store Operators.” More than 165 companies have attended the program, and those that have completed it more than one year ago are averaging 30% lower loss ratios than companies that have not attended, according to Cameron.
Another important component of any risk management program is maintaining a system to report all loss related incidents, analyze them to identify patterns and ensure that appropriate corrective action is taken. “Risk mapping” has been a useful tactic for Holiday Stationstores Inc., according to Lee Hacker, director of risk management for the Minneapolisbased chain.
Hacker uses risk mapping in two ways. He maps incidents on graph paper, with one axis for incident severity and one for frequency. The data picture is used to analyze whether a particular type of loss-causing incident merits insurance coverage, or can be addressed with “self-insurance.” High-frequency, low-severity types of incidentssuch as gasoline spilled on clothes or shoes”would fall under our deductible,” Hacker said.
The company also “risk maps” using store diagramsmost of Holiday’s 300-plus stores have identical or similar layouts to show where loss incidents most often occur. “I can use one map for a whole month and show where stores have the highest frequency, pinpoint what causes the most problems and what kind of corrective action might be needed,” Hacker said.
For example a spike in falls just inside store entrances might indicate a problem with wet floors, one that could be remedied by placing rugs inside the door. The primary benefit of using graphs and mapsrather than written reports and dry columns of statistics. “They are very visual,” Hacker explained, “and a lot easier to read than numbers.”
Cameron, of Federated Insurance, is also a proponent of mapping. “You can use it to immediately spot trendssuch as a crime problem in a particular area, a problem with back injuries, or one or two bad drivers who are causing accidents,” he said. “It’s best to look at three to five years for trends, patterns, locations, etc. Focus on areas that are high frequency, high severity or both.”
Tracking is Key
Sheetz Inc., Altoona, Pa., has two vehicles for reporting and tracking incidents,according to Mike Magner, director of quality assurance and safety. First, anonline incident report is filled out at store level and submitted electronically.Second is Store Solutions, which is the Sheetz call center. It’s open 24/7 tohelp field calls, answer questions and handle any type of situation that arises.Information from these sources is analyzed for trends and helps focus followup efforts and training in an effort to reduce frequency of claims.
As a preventive measure, Sheetz conducts periodic risk assessments at each store. Quality assurance and unannounced safety audits are conducted a minimum of twice each quarter. In addition, Sheetz safety managers follow up with accident investigations. At Sheetz, quality assurance and safety audit results are tied to store bonuses. “It is an added incentive to do well and keep stores safe,” Magner said.
Another vital risk management component is post-injury management to ensure proper rehabilitaion, get workers back on the job sooner and reduce workers’ compensation costs, Cameron noted. “You need good system of follow-up to let people know, ‘We care about you and we want you back here,’” he said.
Return-to-work may involve assignment to light duty work rather than risking re-injury by resuming previous work duties.
While the importance of video cameras as a deterrent to robberies has been well documented, the Circle K convenience store chain has found another: loss-prevention.
Since Circle K installed video cameras in its stock rooms several years ago,it has dramatically reduced employee injuries and workers comp costs, accordingto Kirk Luke, director of loss prevention and safety. Video can help supervisor
sspot employees using incorrect lifting techniques that lead to injury. The videosystems also provide a safeguard against fraudulent claims.
Fall prevention is another key area. To prevent customer or employee slipsand falls, store employees must be vigilant both inside and outside the store.Cameron recommends a regular “All’s Well Walk” so that every shift, someoneis completing a checklist both inside and outside the store of slip, trip andfall hazards. “The other key is to train store employees so they know what todo and not to do when a customer does slip and fall,” he said.
Obviously, the most proactive way to head off potential problems is hiring the right people in the first place. Along with careful, pre-hiring background checks for each applicant, Cameron recommended checking motor vehicle reports if the prospective employee will do any driving for the company, whether in a company vehicle or the personal vehicle of the employee. “The number one loss issue in the industry is driving and the liability associated with operating vehicles,” he said.
Along with checking all references, “it’s a good idea, once you’ve given them a conditional offer of employment, to have them drug screened and take a physical, if at all possible,” Magner advised.
Since risk management is an area that manifests itself in every aspect of runninga business, space doesn’t allow a comprehensive list of strategies. But thesampling included here conveys the importance of a detail-oriented approachto prevention.