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The Importance of a Service Plan for your Risk Management Program

Updated on October 24, 2010

Most customers have never been presented with a detailed and shared service plan.

To ensure accountability and set the ground rules between client and risk manager I am a big proponent of the establishment of a detailed and shared service plan. The best time to discuss this is in the first meeting after a new relationship has been formed between client and risk manager. This is the perfect opportunity for the risk manager to share what services he/she will provide for his/her client. Depending on the complexity of the client, some of the common items includes; 1. Review of current insurance policies. 2. Review of loss runs. 3. Payroll analysis. 4. Audit review. 5. Changes in operations. 6. Stewardship review. 7. Renewal.

1. Review of current Insurance Policies

Once the new insurance policies has been put in place and delivered by the carrier it is time to discuss and review this with the insured. Don't rush through this step and make sure the insured is in agreement with what policies are in place, what was recommended and perhaps rejected. This is also an important time to get signed off E&O protective language. Present the client with a binder of all policies and contact information for the agency as well as claims contacts. Make it easy for the client to find and enable them to review on their own time. This will also save you time when discussing in the next meetings because you can always refer back to the binder with tabbed information.

2. Review of Loss Runs

Request up to date loss runs from current carrier and up to date info from prior carriers. The best time to do this is in the middle of 1st and 2nd quarter from when policy was put in place. Review open claims, trends of new and old claims and provide a summary of action items for the insured, carrier and risk manager. This is a critical time to address overestimated reserves, open claims, return to work issues, etc. If you miss this step you will not be able to make an impact on the mod. in time for the reporting by the carrier to NCCI.

3. Payroll Analysis

This step can be performed quarterly but at least once in the middle of the policy year to identify differences between estimated and actual payrolls. Another issue is to review employee breakdown and identify new employees to make sure they are in the correct class code to avoid surprises at audit. Work with the payroll company or internal payroll person to develop reports that enables the insured to review on more frequent periods on their own time and teach how to and the benefits of period reviews.

4. Audit Review

Assist the client with preparing and analyzing the carrier audit to ensure no errors. Prepare an audit binder of what an audit are the benefits, what documents to have in place and space for previous years audit worksheets. This way you can ensure you actively participate proactively with your client to avoid errors of overcharging and surprises.

5. Changes in Operations

At any point in the policy period, review new or changes in operation by comparing with class codes, safety and loss prevention assistance, etc. Is the company hiring or lying off. New acquisitions or divestitures. New operations in other state, new contracts. These are all things that can impact the insurance policies and show up as landmines if not identified proactively.

6. Stewardship Review

This is the time to discuss what you and your team has done for the client the entire year and to hold yourself accountable for what you outlined in the beginning of the relationship. If everyone are holding up their end of the bargain there should be no issues but enable you to build the relationship base even stronger. Clients tend to forget what you have done for them last year so it may be good to provide a stewardship report that is annually updated each year and track the changes in results as well. This will also set up the last step, which is renewal discussion.

7. Renewal

If your client is happy with what you have done for the client, why should he/she want to look elsewhere for insurance and risk management advice? Get upfront commitment of what the client wants to do. Are they happy with the carrier, do you have new carrier relationships that need to be introduced. What are the goals of the new year?

The circle of the service plan now is complete and this enables you to establish a new service plan for your client.

 Jacob Dahlin is a Risk Management Specialist with G.W. Mountcastle Insurance in Winston-Salem, NC and can be reached at


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