When something goes wrong in your organization, do you have a method to keep track of it? Will all the relevant details be recorded, ensuring that you are protected from legal liability? Whether reporting an employee or customer injury, a defective product, property damage, or any other type of incident, it is extremely important for a business to be able to easily and efficiently create incident reports. For best results, draft a template and use it consistently so that all incidents will have the same level of data and detail.
Here are just some of the benefits of drafting incident reports:
1. Avoid Lawsuits and Settlements
In recent years, courts have been awarding hundreds of thousands or even millions of dollars to victims in product liability, slip and fall, and similar cases where businesses are found to be negligent. Some “customers” even use this as a means of livelihood, exaggerating incidents and injuries in order to fraudulently profit from corporations. Of course, some damages are real and can be severe, but either scenario presents a dangerous financial situation to the accused. Having a detailed incident report can show that your organization was not at fault, or at least not fully responsible for what occurred. For example, if you can show that you have hourly employee inspections to check for spills in a store where somebody slipped, you will be looked upon more favourably than a company that did not have this mitigation procedure in place. Proving you attempted to take reasonable care can result in being able to win a court case (if the claim was not legitimate) or pay out less money in a settlement to the victim.
2. Reduce Fines and Claims.
When an incident occurs in your workplace, Occupational Health and Safety is informed and an inspector will be sent to the site to investigate the cause. Having detailed incident reports on file will show these organizations that you have reasonable risk mitigation measures in place, making it less likely that you will receive a fine. You will also be able to dismiss false claims, whether from customers or for workers’ compensation. Creating traceable data about the severity of an incident when it occurs will be useful if a lawsuit is filed several months later. Without retaining relevant information, it will be impossible to defend yourself against these claims, and you will have no choice but to pay on them.
3. Receive Lower Insurance Premiums
Any risk mitigation procedure, including tracking incidents and claims, can make insurers look upon you more favourably. If they can see that you are actively trying to prevent risk occurrences in your organization, you will become one of the “good” risk-takers that they want to insure. This can result in lower premiums and extra value-added services.
4. Identify Trends and Problem Areas
Risk management is all about proactive behaviour - taking steps to avoid incidents instead of handling them after they take place. But how can you expect to take preventative action when you don’t know what’s actually going wrong? You need a system to keep track of your incidents and compare them to each other: by location, by time of day or year, by employee, and so on. It’s one thing to know that you are spending $100,000 on claims per year. It’s another to realize that 50% of this cost is due to the same mistake, repeated over and over again. Often, an inexpensive and easy fix can reduce that claim to almost zero, saving you thousands of dollars and valuable time and resources. This kind of record keeping gives you new insight into problems in your company and what you can do to stop them from happening again. This is just one of the many benefits that ClearRisk’s Risk Management Information System provides. For an example of how a municipality did just that, check out our case study on the City of Saint John!
Even if your company is small, it is inevitable that you will experience incidents from time to time. When this happens, it’s important that you are able to document them accurately and fully. Doing so will support you in case of a lawsuit, allow you to save money in claims as well as insurance premiums, and identify areas for improvement in your organization. How in-depth you choose to go with your incident reports isn’t what matters; you just need to have them. Smartsheet has some excellent free templates that can get you started.