City of Miami General Safety Manual
Section IV
Risk Management and Loss Control Theory
RISK MANAGEMENT AND LOSS CONTROL THEORY
Section Summary
This section provides an introduction to the theory of risk management
and loss control, which is the foundation of all prevention activities in
safety and health.
Key Concepts
The following concepts should be understood upon completion of this section:
Accidents are typically the result of a series of interrelated or linked events, and
that once the root cause is identified, in many cases, the accident could have
been prevented;
The basic five-party hierarchy of controlling risk;
The meaning of the terms, “authorized employee,” “affected employee” and
“other employees;” and,
The eight parts of risk analysis and safety planning.
Overview of the Subject
General: All employees have a legal, ethical, and moral obligation to conduct their
operations in a manner that is both safe and environmentally protective. These
obligations involve not only employees, but the general public. These obligations
require that the employer identify risks and hazards associated with their operations and
take steps to eliminate or control them.
Loss Causation: Most accidents are not simply the result of a single event. They indeed
may be the result of human error, but the root cause of the human error must also be
discovered.
Employees may be fairly well educated and experienced, but if a new machine or
process is introduced into the workplace, it may present new features that, if not
handled properly, could create hazards. Authorized personnel may follow procedures,
but other employees who have no knowledge of the hazards present may
unintentionally place themselves in danger. The City may have a detailed safety
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Section IV
Risk Management and Loss Control Theory
program, but if it is not updated and employee compliance with the policy is not
enforced, it is soon compromised.
Thus, a complicated chain of events may exist, and if any one element of the causal
chain can be removed, the accident will not happen. This can be illustrated by a classic
accident causation theory:
HEINRICH’S DOMINO THEORY OF LOSS CAUSATION (MODIFIED)
COMPANY ENVIRONMENT
triggers a
HUMAN ERROR
leading to
EXPOSURE TO HAZARD
causing an
ACCIDENT
resulting in an
INJURY
Risk Control Hierarchy. In order to systematically address and reduce the possibility for
incidents with the potential to produce accidents and injuries, a hierarchy should be
considered by management. There is a five-step approach which is commonly used
throughout the safety and risk management profession.
Recommended Safety Practices
1. Compile and Organize Control Policies and Procedures
a. State organization, identification, and general safety policy regarding the
hazard;
b. Organize, preventative measures according to classes of machines,
processes or operations and employees to be protected; and
c. Specify policies for review of program performance, training of new or
transferred employees, and recurrent training of authorized employees;
delineate authority for supervision, training, and review.
2. Designate Authorized Employees
a. Set out training and experience levels required for an employee job
description to include authorization to control equipment or operations
involving identified hazards;
b. If limited authority is given to certain employees, such as drivers or
machine operators, so define; and,
c. Organize authorizations by classes of machines or hazards.
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Risk Management and Loss Control Theory
3. Conduct Training for Authorized and Affected Employees
a. Each job classification should receive complete
training prior to being assigned to equipment service duties
or duties that involve potential hazards;
b. Other classes of employees should receive training in recognition of
hazards as part of general orientation; and,
c. Employees should be provided with or have ready access to written
procedures and/or equipment operating handbooks for reference while
performing their job functions.
4. Document Training
a. List names and the dates of training. If employees work on
different types of equipment or operations, documentation
should
cover training for each major category of equipment; and
b. When employees are transferred or promoted, training records must
document that training is updated.
5. Follow-up, Evaluation of Effectiveness (Periodic Review)
a. Review accident and incident reports for evidence of injuries
or dangerous occurrences involving failure of the hazard
control program; and,
b. Supervisory review of employee performance should cover proper
understanding of organization procedures.
6. Continuing Modifications and Revisions
a. Review new types of equipment or applications introduced
since the last review to determine if new hazards exist and if
established procedures are appropriate; and,
b. Document that procedures are changed to reflect inadequacies
discovered during the review.
Duties and Responsibilities
All personnel are part of the safety chain and all have obligations to:
Be educated about the safety issues which are related to their job
assignments;
Adhere to safe practices and directives; and,
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Communicate with other employees and their supervisors regarding changes in
conditions or problems in the workplace which may expose themselves or their
fellow workers to hazards.
Managers and Supervisors: Managers and supervisors have a responsibility to
understand the nature of the operations for which they are responsible as well as the
hazards and risks associated with those operations. They need to have an awareness
of the technical nature of regulations and standards that apply to these operations and a
detailed knowledge of the employer’s responsibilities under those regulations and
standards. These individuals must have an understanding of their employer’s risk
management plan and must provide feedback in order to make the plan effective and
current to respond to changes in the workplace.
Managers and supervisors must assure that only properly trained employees are
authorized to perform duties where such specialization is required, and that employees
in all jobs receive training that is adequate to allow them to recognize and protect
themselves against workplace hazards.
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