Loss Causation Model

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"Loss Causation Model" History, Theory & Application

"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 operating without authority, working under the influence of controlled substances, inadequate barriers. This then leads to an Incident – a fall,
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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, product, service, equipment, facility, and/or environment

The International Loss Control Institute has developed the ILCI Loss Causation Model. Like Heinrich’s 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 the end with the Loss (injury or damage to property) and working back to Lack of 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
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