What are Lagging Indicators in Safety?
Here’s the hard truth: If you’re not focusing on workplace safety and risk control, you’re setting yourself up for future problems. Lagging and leading indicators help measure risk and safety, and they are key metrics that reflect past performance and are invaluable for understanding how to prevent future incidents. This article will discuss examples of lagging indicators in safety–particularly why reviewing OSHA logs, the OSHA Incident Rate, and insurance loss runs are critical. In addition, we will also address why establishing a process, assigning corrective actions, and communicating improvements with your insurance carrier is crucial. To learn more about leading indicators, see our blog post (https://smarterrisk.com/english/blog/understanding-leading-indicators/).
Examples of Lagging Indicators
1. OSHA Logs: A Record of Safety Incidents
The Occupational Safety and Health Administration (OSHA) logs provide a record of safety-related incidents at your workplace. By regularly reviewing these logs, businesses can:
- Identify Patterns: Certain issues may be recurring, indicating areas that need targeted interventions.
- Enhance Workplace Safety: By proactively addressing recorded incidents, businesses can take steps to prevent future occurrences.
2. OSHA Incident Rate or TRIR: Gauging the Frequency of Incidents
The OSHA Incident Rate is a standard measure lagging indicator that provides insights into the frequency of workplace injuries and illnesses. It’s calculated using a specific formula (# of OSHA recordable injuries X 200,000 / total person-hours) that considers the total number of incidents in relation to the total work hours. For small businesses, a high incident rate can be a red flag, indicating:
- Operational Weaknesses: An unusually high rate might suggest lapses in training, equipment maintenance, or other safety protocols.
- Financial Implications: A higher incident rate can result in lost contracts and other costs.
Just be aware that this metric only takes frequency into account, not severity. For example, two companies both have OSHA-recordable injuries. One injury is minor, and the person is back to work within a few days, but the other is severe, and the person is out for months – theoretically, they could have the same OSHA incident rate. The point is that the OSHA incident rate is a good metric, but it has limitations. For this reason and many others, insurance loss runs reviews are critical.
3. Insurance Loss Runs, A History of Claims
Insurance loss runs are reports detailing the history of claims against a business’s insurance policy. Reviewing loss runs can:
- Highlight Risk Areas: These reports can show vulnerabilities in operations or areas of frequent accidents.
- Affect Premium Rates: A business with numerous claims might see a spike in insurance premiums. Conversely, a company that addresses these issues proactively can, in time, qualify for better rates.
- Provide Clarity: A clear understanding of past claims can help businesses anticipate and prepare for future risks.
Establishing a Review Process for Lagging Indicators
Merely collecting this data isn’t enough. It’s essential to have a structured process in place to review, analyze, and act on these lagging indicators.
- Regular Reviews: Set aside dedicated times (monthly, quarterly, etc.) to go over these metrics.
- Assign Corrective Actions: Any identified issues should have clear corrective actions assigned, with responsibilities clearly defined.
- Track Improvements: Monitor how the implementation of corrective measures impacts the lagging indicators over time.
Communicate Corrective Actions and Other Improvements with Your Insurance Carrier
Your insurance provider can be a valuable partner in understanding and mitigating risks.
- Share Data: Keeping your carrier informed about your business’s safety performance can lead to insights, resources, or even incentives.
- Ask for Guidance: Many carriers offer resources or consultation services to help businesses improve their safety and risk profiles.
- Negotiate: As your safety record improves, it’s worth discussing any potential adjustments to your premiums or coverages.
In conclusion, while lagging indicators look at past events, they’re a goldmine for avoiding future mishaps. Small businesses, with their inherent agility and adaptability, stand to benefit immensely from a proactive approach to these metrics. Looking back is often the best way to move forward in safety and risk management.
Learn about how Smarter Risk’s automated tools can help your business leverage lagging indicators, by generating a risk report today at (https://smarterrisk.com/businesses/)! To learn more about OSHA logs and incident rates as a lagging indicator, visit https://www.osha.gov.
