Loss Causation Model free essay sample

Loss Causation Model BY ds11969 Loss Causation Model History, Theory Application Before a loss occurs (Injury, illness, damage, loss in process), there are series of events that take place with a root cause that begins this series of events. The root cause is called a Lack of Control (Inadequate standards, lack of compliance for preparedness, knowledge and skill training, etc). This leads to a basic cause (or personal factor) such as lack of knowledge, stress, inadequate capabilities. This in turn leads to an immediate cause (substandard conditions and actions) such as perating without authority, working under the influence of controlled substances, inadequate barriers. This then leads to an Incident a fall, a strike, stress, or being in contact with an unfriendly environment. The incidence leads to the loss. The concept of the Loss Causation Model hence is that when a loss occurs, we need to go back that chain, realize that the root cause is not the incident or the immediate cause, and solve the problem from the root cause in order to prevent the loss from reoccurring. We will write a custom essay sample on Loss Causation Model or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page There are numerous accident and loss causation models in existence. The two that will be discussing in this report will be H. W. Heinrichs Domino Theory and the ILCI Loss Causation Model. Loss causation models are used as models for safety and accident prevention theory. Loss causation models provide a direction of focus for the individual interested in reducing injuries in an organization. Heinrichs principles date back to 1932 and encourage focusing on near misses instead of injury-related incidents to prevent significant losses from occurring. The International Loss Control Institute developed their own model in 1985, the ILCI Loss Causation model, to provide users a tool to control the vast majority of accidents and loss control roblems. The ILCI model encourages focusing on development of standards, the measurement and evaluation of standards to ensure they are being followed through by members of the organization, and the continuous update of standards to provide a means to prevent injuries in an organization. A more detailed account of each of these loss causation models follows starting with Heinrichs theory. Heinrichs Domino Theory of Loss Causation In his 1932 book Industrial Accident Prevention, H. W. Heinrich wrote that there are five factors in the accident sequence: * The first factor is the social environment nd ancestry. Traits such as recklessness, stubbornness, avariciousness, and other undesirable character traits may be passed along through inheritance. * The second factor is the fault of the person. This factor states that inherited or acquired traits of the person; such as violent temper, lack of consideration, ignorance of safe practice, etc. are responsible for the person committing unsafe acts or allowing the existence of mechanical or physical hazards. * The third factor is the unsafe act and/or mechanical or physical hazard. Unsafe acts include standing under uspended loads, failure to adhere to lock-out/tag-out policy, horseplay, and removal of safeguards. Mechanical or physical hazards include such items as unguarded machinery, unguarded pinch points, and insufficient light. * The fourth factor is flying objects, being caught in machinery, or coming into contact with high energy sources. The fifth and last factor is the injury. Injuries include fractures, lacerations, etc. , that result directly from accidents (Heinrich, 1932). Heinrich then arranges these five factors in a domino fashion such that the fall of the first domino results in the fall of the entire row. The domino arrangement illustrates Heinrichs notion that each factor leads to the next with the end result being the injury. It also illustrates that if one of the factors (dominos) is removed, the sequence is unable to progress and the injury will not occur. While it may be difficult or impossible to change a persons attitude (the first and second domino), proper supervision can guide the persons behavior so that they do not perform a substandard act or allow a substandard condition to exist (the third domino) which leads to an accident (the fourth domino) that leads to an injury (the fifth and final domino). Heinrich also developed a pyramid shaped model to explain the relationship of near-miss accidents to minor injuries and major injuries. Heinrichs pyramid states that for every 300 near-miss incidents, there will be 29 minor injuries, and 1 major injury. This pyramid summarizes Heinrichs belief that-near miss incidents must be prevented in order to eliminate the possibility of reaching each successive level of the pyramid. Figure 1 depicts Heinrichs pyramid. While the terminology and thinking found in Heinrichs Domino Theory of Accident Prevention are dated, the process remains worth review. Properly training employees and managers insures that the management system is working in concert with employees to reduce the occurrence of near misses that, in turn, reduces the opportunity for more severe injuries to occur. A major flaw with Heinrichs model is that it relies on a single cause that leads to an incident. Rarely is an incident the product of a single cause; more likely, an incident is the result of several factors that occurred simultaneously to produce the incident or loss. A more up to date and complete model of loss causation is the ILCI Loss Causation Model that dates to 1985. Where Heinrich focused on reducing the ncidence of near misses, the ILCI model focuses on development of performance standards and enforcement of standards to ensure that employees are performing their work in a safe manner. With emphasis on performance standards, the ILCI model takes a proactive approach to loss prevention and suggests that losses are due to a breakdown in these standards. A closer look at the ILCI model follows. ILCI Loss Causation Theory * Inadequate Management control * Basic causes: personal vs. Job factors * Immediate causes: substandard acts/ conditions * Near hit/accident: contact with energy, substance, and/or people * Loss: people, roduct, service, equipment, facility, and/or environment The International Loss Control Institute has developed the ILCI Loss Causation Model. Like Heinrichs Domino Theory, the ILCI model is based on a sequence of events that leads up to an eventual loss. The events in sequential order are Lack of control, Basic causes, Immediate Causes, Incident/Contact, and Loss. Each event has a role in continuing the loss process to its conclusion, the Loss. To facilitate a better understanding of the ILCI model, the events will be reviewed in reverse, starting from Control (inadequate program or inadequate compliance to standards). To begin, Loss is the result of an accident. Loss can be direct or indirect, both of which must be considered to fully appreciate the impact to a company. Direct loss includes some or all of the following; harm to people, damage to property, or a reduction/halt in productivity. Indirect costs may include, but are not limited to, increased training costs to replace injured employees, legal expenses, investigation time, and loss of business due to unfavorable press. The ILCI Loss Causation Model estimates that for every dollar of direct loss, the indirect costs may be six to fifty-three times as much. Both direct and indirect costs of injury and illness are deducted directly out of profit; conversely, when dollars are saved from accidents the organization realizes increased profits . Prior to the Loss, the Incident occurs that may or may not result in injury to a person or damage to property. A person or object is able to absorb a given amount of energy without harm, however, when the amount of energy exceeds the amount that may be safely absorbed, injury or damage results. This not only applies to an objects kinetic energy that contacts the person or property, but also electrical nergy, acoustic energy, thermal energy, radiant energy, and chemical energy. The American Standard Accident Classification code lists some of the more common types of energy transfers which include: Struck against (running or bumping into) Struck by (hit by moving object) Fall to lower level (either the body falls or the object falls and hits the body) Fall on same level (slip and fall, tip over) Caught in (pinch and nip points) Caught on (snagged, hung) Caught between (crushed or amputated) Contact with (electricity, heat cold, radiation, caustics, toxics, noise) Overstress/ verexertion/overload Continuing up the chain of the ILCI model, Immediate Causes precede the Incident. Immediate Causes are subdivided further into substandard practices and substandard conditions. While Heinrich used the term unsafe act or conditions to describe the direct cause of injuries, use of the term unsafe has fallen out of favor with current trends in accident prevention. The term unsafe calls the organizations ability to identify obvious problems into question, a potential problem in todays litigious society. The term substandard acknowledges that organizations have tandards of performance that are to be followed by all employees and is the accepted term used today. When substandard conditions and/or practices are allowed to occur in a facility, there is always the potential for an energy transfer that is beyond the persons/ob]ects ability to absorb without damage. To clarify substandard practices and substandard conditions, the following examples are provided: Examples of substandard practices would include: Operating equipment without authority Improper loading Horseplay Under influence of alcohol and/or other drugs Examples of substandard conditions would include: Ђ Defective tools, equipment or materials Poor housekeeping; disorderly workplace Inadequate ventilation Prior to the Immediate Cause of the loss are the Basic Causes. Basic Causes must be identified and addressed to allow a more effective control of losses. The Basic Causes help to explain why people perform substandard acts or allow substandard conditions to exist. The ILCI model divides the Basic Causes into two categories, personal factors and Job factors. Personal factors include lack of knowledge, skill, or inability to handle pressures of the Job while Job factors include such items as nadequate training, inappropriate equipment and tools, worn equipment and tools, or inadequate equipment and tools. Lack of Control is the initial step that leads to Basic Causes and allows the sequence to proceed to the eventual loss. According to the ILCI model, there are three common reasons for lack of control; inadequate safety/loss program, inadequate safety/loss program standards, and inadequate compliance with standards. First, an inadequate program occurs when there are too few program activities to address the needs of an organization. Necessary programs will vary depending on the size of the organization, work performed at the rganization, and the methods to perform the work. Common elements of an effective program according to the ILCI model include management and employee training, personal protective equipment, engineering controls, planned inspections, task analysis, emergency preparedness, and incident investigations. Second, inadequate program standards occur when organizations standards are not specific enough, not clear enough, or are not high enough. Program standards need to let people know what is expected of them as well as provide them with a tool to measure their performance against the standard. Third, inadequate compliance is a factor that leads to Lack of Control. Most managers agree that inadequate compliance is probably the single greatest reason for loss. Poor compliance with effective program standards is due to ineffective communication of standards to employees or a failure to enforce standards . ln summary, the ILCI Loss Causation Model indicates that losses begin with a lack of control. With a lack of control, basic causes such as lack of training or inadequate tools and equipment are allowed to occur/exist. These basic causes lead to the immediate causes, which are the existence of a substandard ondition or the performance of a substandard practice. Immediate causes lead to the incident itself, and conclude with the loss. The loss may be to people, property, product, the environment, or the organizations ability to provide its services. It is important to note that it is not the intent of the ILCI model to place blame on individuals for committing substandard acts or for allowing substandard conditions to exist, but rather to encourage managers to evaluate the management system that influences human behavior. Punishment should never be inflicted as the result of an accident investigation . By punishing the employee; attention is shifted away from the management system that allowed the loss to occur in the first place. The ILCI model starts with a lack of control. Control is within the four essential functions of management, which are to plan, lead, control, and organize. Taking this into consideration, it may be summarized that a loss is indicative of a failure on questions, the lack of control in the management system may be identified and addressed to prevent the sequence of events from occurring that leads to the eventual loss. As detailed in the ILCI model and H. W.