Roundtable Report: Outmaneuver Risk

Preparation, plans, people key to controlling challenging situations

By  Samantha Oller, Senior Editor/Special Projects Coordinator

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Neither tornado nor robbery nor slip-and-fall accident prevents c-store retailers from closing their appointed sale.

Staying ahead of the unexpected is simply part of the retail business. The more than two dozen attendees of CSP’s 2014 Leadership & Crisis Prevention Forum could tell you stories: tales of misbehaving customers destroying bathrooms, of natural disasters that rearranged towns, and of workers’ compensation claims that threatened to spiral out of control.

But retailers could also share how they took control of these situations, kept their businesses running and made each incident a true learning experience—all while maintaining perspective.

“My goal is to laugh out loud every day,” said Nancy Couch, loss prevention and safety director for North Salt Lake, Utah-based Maverik Inc. “And when something comes, take care of it the best you can and get on task so you’re ready for the next one.”

Topics at the 12th annual forum, which took place in May in Nashville, included the latest developments in the insurance market, how to get a handle on claims, staying on top of product recalls, and recovery from natural disasters and robbery. Read on for highlights of the presentations and discussion.

Managing and Reacting

When it comes to insurance claims, retailers often rely on service providers to keep track of trends. But as the retail business grows in complexity and the potential liabilities multiply, it could pay to take greater control of claims data.

Couch has been with Maverik for more than two decades, and she has witnessed this change firsthand.

“People are more litigious in society now,” said Couch. “The entitlement factor’s out there. [On] social media—people communicate everything. You don’t get a pass if you mess up. It’s posted out there.”

Until recently, Couch and an associate made up the entire risk-management team for the chain, which stretches across 264 stores in 10 states. “When you have more than 4,000 employees, you’re always being reactive,” she said. “We reacted to issues [employees] came in with. We had no resources to collect the data and no information to train on the relevancy.” But it quickly became clear that the department needed more help, so Couch got the go-ahead to hire Travis Goff as risk and safety supervisor, and to help her form a more robust risk-management team at Maverik.

Goff ’s background includes time as facilities and maintenance manager for Family Express Corp., a 60-store chain based in Valparaiso, Ind. His responsibilities included everything from manning the help desk to overseeing Americans with Disabilities Act (ADA) compliance efforts. “When you’re small, everyone’s a risk manager,” said Goff. At Maverik, it became clear that quantifying risk would be key to managing it at the large chain.

One of Goff’s first efforts was examining how Maverik quantified its insurance claims. At the time, it relied mostly on loss run reports from its insurance providers, its own internal reporting and safety inspections. This decentralized approach often resulted in incomplete data that didn’t show the true costs of each claim.

“The most important step in the risk management process is identification,” said Goff. “If you don’t know your true risks, if you don’t know your true costs, then how do you know what you’re doing?”

To solve this problem, Maverik created its own risk-management information system (RMIS), based in a series of Excel workbooks that catalogued claims for workers’ comp, general liability and property damage. In workers’ comp alone, it tracked more than 20 characteristics for each claim, including the area in the store where the incident occurred, employee actions at the time of the incident and the cause of injury.

In embracing such a degree of detail, the Maverik team could identify where most claims were triggered. For example, 80% of losses occurred in five spots: the parking lot, bakery, ice machine, freezer, dumpster and sales floor. Eighty percent of losses happened when employees were walking, stocking, cleaning or throwing away the trash.

This has helped the company neutralize issues. A safety analyst for Maverik’s workers’ comp provider told the retailer that, based on the growing number of laceration claims, employees clearly were not wearing their protective gloves when cutting bread at the in-store bakeries.

Based on information from the RMIS showing what was causing most of the cuts—scissors and chef knives—and the nature of the injuries, Maverik was able to determine the real issue: Employees were using the wrong implements to open packaging instead of the ergonomic tools intended for that purpose.

“We’ve been bugging [employees] for two years about wearing the gloves,” said Couch. “Now we really know where to train them so we can make a difference.” The result: a 15% drop in laceration claims.

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