What is Loss Prevention Management?

Businesses purchase insurance and invest in other ways to mitigate and overcome losses from property damage, theft, and fraud. The best way to handle these losses, however, is to prevent them. The practice of loss prevention management is about understanding what particular vulnerabilities a business has and then attempting to stop them from happening or to reduce their impact given the resources and nature of the business. There are many different forms of loss prevention management, such as asset protection for retail organizations, loss prevention for workers' comp, and loss control for facilities and other properties.

Loss prevention for properties, involves properly engineering and constructing buildings so that they don't suffer damage from such perils as fires, hurricanes, earthquakes, and snow storms. For hurricane, for instance, the roof of a building can be strengthened so that high winds do not rip them off, and windows can be protected so that they do not shatter from flying debris. Loss prevention management for earthquakes, on the other hand, can involve properly securing shelving and other internal contents of a building, while making sure that the structure can withstand ground shaking from a tremor.

In the workers' comp framework, loss prevention management is about creating a safer work environment so that employees are not injured while on the job. This can be a simple matter of requiring employees to wear slip resistant shoes at a restaurant so that they do not slip while serving tables or working in the kitchen. For factory or warehouse employees, loss prevention management can involve teaching employees proper ergonomics so that they lift packages properly and use machinery safely. Another aspect of loss prevention management for workers' comp is to create a culture of safety within the organization, from the executives down to the hourly employees.

Retail loss prevention, also known as asset protection, begins by trying to stop employee theft, shoplifting, embezzlement, and fraud. When a loss occurs, this type of loss prevention management takes the form of private investigation. Loss control professionals are in charge of managing the store security programs and dealing with any employee who might be responsible for the losses. Some of the main types of retail losses that loss prevention management professionals look out for include stolen credit card usage, check fraud, margin losses, and sweethearting. The latter occurs when employees find competitor prices to match for customers, giving special deals to friends and family, or reducing the fees associated with deliveries and warranties.