Metro Hardware: Buying Matting or Buying Evidence?
Metro Hardware has 62 stores. Last year it recorded 214 customer slip-and-fall claims totalling $3.2M; 12 stores generated 41% of claims, and 60% of incidents occurred in the three hours after floor cleaning. Three claims exceeded $150k, and in two of them no incident report or witness statement existed, which the adjuster says weakened the defence. A vendor proposes anti-slip matting for all stores at $1,900 per store per year and claims it will cut claims 30%. A second option is a contract cleaning service using a slip-resistant finish at $260,000 per year. The claims manager wants to buy the matting for all 62 stores immediately.
1. Evaluate the matting proposal financially. What is the claimed benefit, and why should you not simply approve it?
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The headline arithmetic looks overwhelming. 30% of $3.2M = $960k of claimed savings against 62 × $1,900 = $117,800 of cost, roughly an 8:1 ratio. That is exactly why it needs scrutiny.
Four problems:
- The 30% is a vendor estimate, not evidence. No control group, no definition of what counts as a prevented claim.
- Regression to the mean. A bad year is partly noise; the next year tends to improve regardless of what you buy, so the program will look effective even if it is not.
- The metric is wrong. $3.2M is claims, not incurred cost including adjustment expense, and raw claim counts ignore customer traffic. Claims per million customer visits is the number to manage.
- The data points elsewhere. 60% of incidents cluster in the three hours after cleaning, which suggests the cleaning protocol and drying time are the cause, and matting does not fix a wet floor. Mats also introduce their own trip hazard at edges and need maintenance.
The right answer is not rejection; it is refusal to buy 62 stores on a vendor's number. Buy the cheap fix everywhere (cleaning schedule and signage), and test the matting where the loss is.
2. Which stores and which controls would you prioritize, and how would you design a pilot that produces usable evidence?
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Prioritize the 12 stores that generated 41% of claims, which is about $1.31M of exposure. Matting there costs 12 × $1,900 = $22,800. If the vendor's 30% held, that would be roughly $394k of avoided claims - a strong case even at half the effect.
Immediate, near-zero-cost controls at all stores: shift floor cleaning to before opening or after closing where possible, use wet-floor signage and barriers, log drying times, and add a supervisor check before the store opens.
Pilot design:
- Stage the rollout so the 12 high-claim stores are treated and a matched set of comparable stores is not, chosen on traffic, format and prior claim history.
- Pre-register the metrics and the evaluation window: claims and incurred cost per million customer visits, 12–18 months, with interim reviews.
- Record near-misses and floor-condition audits, not just claims, so you get a leading signal before the loss year closes.
- Set a decision rule up front: expand if the treated group improves by more than X relative to control, otherwise stop.
The pilot costs little and buys something the vendor cannot sell: evidence you can defend to the CFO and to the insurer at renewal.
3. The two large claims with no documentation: what does that tell you about severity control, and what would you put in place?
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Documentation is a severity control, not paperwork. Without a contemporaneous incident report, photographs and witness details, the defence is weak, and the claimant's account becomes the only account. Cases settle on the other side's narrative, and the absence of records can look like indifference to a jury - which is how a $40k fall becomes a $180k fall.
What to put in place:
- A 24-hour incident reporting rule with a mobile form, photographs and witness capture, and a named store-level owner.
- CCTV retention of at least 90 days, with a documented preservation instruction once a claim is notified.
- A large-loss protocol with a single point of contact: notify the insurer or TPA immediately, preserve the scene, and involve counsel above a defined threshold.
- Contract terms with the cleaning contractor: indemnity, insurance certificates, method statements and drying-time obligations.
- A monthly review of open claims for reserve adequacy and for patterns - two undocumented severe claims in one year is a signal, not bad luck.
The matting question and the documentation question should be answered together: one manages frequency, the other manages severity, and the program needs both.