How To Help A Company With Liability Risk Analysis

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1 AEC experts Our introduction

2 Liability Adjusting & Consultancy AEC experts The ongoing increase in the number of liability claims and the level of complexity thereof can be attributed to an increase in general awareness of the incidence of claims, changing legislation and internationalisation, which is in alignment with the continuing growth within the liability branch of the insurance sector: the joint premium interest of the members of the Insurers Bond is more than one billion euros. The level of proficient expertise required for processing and managing these complex claims should therefore increase accordingly. This creates the need for specialisation. AEC experts have a proven track record in this field. In addition to the traditional (liability) adjusting services, an increasing number of requests is made for services such as liability risk analyses, consulting services and audits, recall supervision and consulting, and liability claims management. AEC experts work closely with reputable legal firms in The Netherlands, and can, when required, recommend reputable legal firms for their clients abroad. Given that it is not possible to convey the entire range of our services, a meeting can be held in order to provide clarification concerning the wishes of the client and the capacities of AEC experts. Experienced specialists with expertise in diverging fields are available within the AEC experts network. 2

3 Moreover, we also specialise in processing international cases. We can also assume responsibility for the logistics in international cases if required by the client. AEC experts provide services in the following operational fields (while this list is not limited to those disciplines): *general liability *technical liability *product liability *environmental liability *bodily injury and death claims with the associated calculation of loss *industrial accidents *professional liability of architects, accountants, insurance brokers, civilengineers, consultants *loss of profits in liability cases *recall consulting and supervision, crisis management *claims management in liability cases *risk analyses and audits Our company has been set up in such a way that the claims procedure is jointly determined with the client regardless of the extent of the claim or the level of complexity. Please contact us and we will gladly provide comprehensive information. Telephone: +31 (0) Ask for Wim Campman. 3

4 AEC experts and the recall Recall manual: necessity or luxury? We are all familiar with the well known large recalls. Everyone who is involved, deals with such an event in their own individual manner. How does a manufacturing company deal with a recall? Were they prepared for the event, or were they forced to reinvent the wheel? Recalls in other companies are often food for thought for the responsible parties within a manufacturing company: what is the procedure in my company should this happen to us? There are also other reasons why manufacturing companies consider recall procedures, for example in relation to obtaining an ISO certificate or if they are drawing up a quality manual. The nature of the reason to consider recall matters is however irrelevant; what is important is that the matter is given considerable thought in a timely fashion allowing the best possible preparations to be made. Having a recall manual is at the very least highly recommended, if not a necessity. The following events occur regularly when a company is confronted with a situation in which a decision has to be made concerning whether or not to implement a recall: 4

5 - There is never enough time. The pressure to undertake rapid action is often so intense that it is not possible to thoroughly discuss decisions and undertakings. - There is often a crisis situation, in which decisions are primarily made on an ad hoc basis. On occasion by the wrong person, the consequences of the decisions are overlooked, simply due to a lack of experience. - PR and communication may be not thoroughly thought through or prepared, which can result in erroneous statements being issued. - people in various positions within the company do not know what is expected of them and are not aware of what people in other positions are doing (or not doing), which results in matters being overlooked and people in different positions working on the same issues and hampering each other. Gaining experience in recall matters is not a desirable factor. We however do possess this experience. We would like to share the knowledge drawn from this experience, preferably before companies are confronted with a recall, because if and when it happens, the preparations have been made and the recall can be carried out in an organised manner. Experience has shown that a well-organised recall commands respect, from the clients in particular. Why should you have a recall manual? Because this provides the opportunity to thoroughly consider all aspects of a recall situation in composed circumstances, instead of in a crisis situation. The decisions can be 5

6 methodically deliberated in their entirety, the actions can be tested, the relevant persons in the decision-making process can be appointed, allowing them to familiarise themselves with their role, the logistics within the company can be altered where required and the potential costs can be taken into account etc. etc. The recall manual must contain as many predetermined rules and tasks, and other relevant recall matters as possible. Should there be a sudden requirement for a recall, then the entire process is accelerated in every respect as there is a recall manual: everyone is prepared for their individual task, knows what is expected of him or her, various matters have already been investigated and can be immediately set in motion etc. An extensive audit takes place within the company in question prior to drawing up the recall manual. After all, the situation within the company forms the basis upon which the recall manual is compiled. On occasion, recommendations are made following the audits concerning improvements of the process, with a view to prevent recalls or to accelerate the recall process. It is of course self-evident that a recall manual also requires maintenance and revisions must therefore be made on a bi-annual or annual basis in accordance with the interim changes within the company. We have already drawn up numerous recall manuals. We can be regarded as experienced in this field, we know what a recall entails, what you will be confronted with, we are familiar with the ins and outs of recall matters. These 6

7 ins and outs can be converted into a recall manual, which can be incorporated in an ISO manual, and is also constructive in many other situations. For example, in the case when a customer only wishes to do business with a company if it demonstrates that it has taken precaution measures relating to the possibility of a recall or when entering into recall insurance. We can provide tailor-made recall manuals for companies (either comprehensive or relatively straightforward). We supply the blueprints, based on discussions with a number of important staff members within the company and a tour of the manufacturing company. We expect that the company also executes certain aspects; they will have to appoint the staff members who form the recall team, and also their replacements. All relevant details of these people must be registered. Furthermore, a number of permanent and essential company contact persons must be included in the manual, for example the lawyer, the marketing office, the insurance broker, and also contact details of the relevant authorities. Finally, a recall manual administrator must be appointed, who will be allocated the responsibility of ensuring that the manual is kept up to date. An overview of the rise in numbers of recalls in the EU: If you are interested in these services please call us and make an appointment: tel. +31 (0)

8 AEC experts And the liability risk appraisal THE ORIGINS We have the desire to put the significant experience and knowledge that we have gained in the liability loss adjusting branch throughout the years to other uses than solely traditional loss adjusting provision. The concept of applying this knowledge and experience in other fields was nurtured from the impact of our background of more than 25 years as insurers and claims experts, primarily in liability matters. The incentive to provide advisory services in this field arises from the fact that the classification of liability risks within companies can be a demanding task, even for the companies themselves. This process makes the risks tangible, which enables risk bearers such as insurers to identify these risks in order to improve the determination of their own exposure. In addition to this, a requirement is also created for the company to make the step from risk appraisal into riskanalysis and assessment based on the results obtained, and subsequently create an institutionalised risk management process based on risk control. THE RISK ASSESMENT PROCESS Risk assessment must be distinguished from risk management. The purpose of risk management is dealing with risks, geared towards the prevention of damage to the financial position of a company by means of control, 8

9 financing and management of risks in an organisational framework at the lowest possible costs. Risk assessment is an integral part of this, where required complimented by risk analysis and evaluation. Risk management should take place within the companies themselves, and is related to the entire risk management process with successive elements such as risk identification, analysing, evaluating and controlling, which forms the basis for the implementation of the necessary measures, together with the required assessment and reports. Risk financing is a familiar and important aspect in this matter. Risk assessment therefore covers a section of risk management that may also be of interest to others. In particular the risk bearers, given the relevance of obtaining an insight into risks which the company insured by them are exposed to. The execution of a risk assessment effectively constitutes the basis. Risk assessment entails the identification of all types of risks in various areas, such as: -image -product -finances -environment -labour relations -information technology -material areas -contracts 9

10 THE LIABILITY RISK APPRAISAL Is liability the last link in the chain of risk appraisal areas? The answer to this is dualistic to a certain extent: yes, because this is the last area in which the risk appraisal essentially develops; no, because it also plays a role, albeit secondary, in the other risk areas. The development of the risk appraisal in the field of liability is already in full swing, as it becomes increasingly clearer that this can relate to risks with a high exposure, for example due to a valid risk liability. The increasing level of complexity in numerous areas results in a high level of non-clarity or unstructured approaches in many companies with respect to the potential risks. AEC experts wish to play a supportive role in the task of highlighting specific liability risks and the potential consequences thereof. The appraisal is accompanied by recommendations for improvement, which is in turn beneficial for both parties: the company, which has been enhanced, the risk bearer in relation to the reduction of the risk, and the possibility of financial benefits for the company and the risk bearer. In principle the extent of the risk appraisal is established following discussions with the principal. The standard method is as follows: As much company information as possible is compiled for orientation purposes; following which, prior to or during the audit, a cluster type classification is made of the company, which is based on logically related activities. The inventoried standard liability risks will be presented per cluster and will also be allocated an achieved quality level score. 10

11 A more intensive appraisal in the field of implementation of working conditions is available on request. AEC experts work jointly with specialists in this field. It is possible to include an analysis of the loss history in the report. Loss ratios can be calculated if there is sufficient information available to do so. In principle only general evaluations of technical aspects, such as the correctness of the execution of technical processes and such like, shall be executed based on information provided by the clients. More in depth technical evaluations and processing of the results thereof are available at the request of the principal. Furthermore, simple scans of companies can be carried out in order to provide a general evaluation to support the risk bearer s decision-making process. Where required, discussions will be held with the principal in order to establish the required quick scan areas. If this pertains to a request from a risk bearer, the cooperation of the company in this matter must be established beforehand. INTERESTED? If you are interested please contact us. We will be pleased to provide all required information. Tel. +31 (0)

12 AEC experts (met Register Experts) Newtonlaan BH UTRECHT Tel Fax Tel (buiten kantoortijd) Website 12