Risk management and safety practices were sorely lacking when Prince William County, Va., hired Lori J. Gray as a risk manager in 1999.

The northern Virginia county, which is near Washington, recently had scuttled its attempt to outsource risk management, no one was watching over a third-party administrator whose nurse case manager mistreated injured county employees and a risk management staff essentially didn't exist, among other challenges.

But since then, Ms. Gray has created a risk management department — essentially from scratch — that organizations such as the Public Risk Management Association have held up as an example for other local governments to follow.

Along the way, Ms. Gray, who now is risk management division chief, helped convert county departments such as police and fire into true believers in risk management. She also cut losses so that dividends from a self-insurance program can fund risk reduction measures and smooth out premium increases for the insurance that the county buys. In addition, she implemented an environmental management program that has been recognized for its excellence.

Those are just a few of the accomplishments that have led to Ms. Gray's selection as Business Insurance's 2013 Risk Manager of the Year^®.

“She is so passionate and enthusiastic about risk management,” said Prince William County Deputy County Executive Christopher E. Martino, who recalls “things were not so good” in risk management when he hired Ms. Gray.

She also has fought to improve a health clinic for the county's public safety employees, which is a significant loss reduction measure because Virginia workers compensation law holds that cancer, coronary issues and other ailments are presumed to be automatically caused by a public safety worker's normal duties.

And she has implemented dozens of other measures such as data tracking to pinpoint losses, a wellness program for county employees and a safety rewards program to reinforce desired employee practices.

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Ms. Gray succeeds because her public relations efforts won buyin from county employees and her peers across county management, said William F. Becker, national practice leader in Washington for Aon Risk Solutions' public sector group, which places insurance coverage for Prince William County.

She also has won the respect of county government executive leaders and the Prince William County Board of Supervisors, so her risk management initiatives get support, Mr. Becker added.

Prince William County employs about 3,600 workers in more than 30 departments that serve 419,000 residents living across 348 square miles.

Ms. Gray's risk management division consists of 10 full-time employees and one part-time employee. It has fostered cooperation between the diverse county departments to reduce their exposures, said Steven A. Solomon, the county's director of finance.

For instance, a county safety and health council that the risk management division coordinates brings together representatives from many of the county's diverse agencies to help devise strategies to mitigate the county government's exposures.

“Risk management is the catalyst that brings them together,” Mr. Solomon said.

Ms. Gray also is board chair for the Prince William Self-Insurance Group, overseeing two self-insurance pools covering county risks. She uses pool premium charges to make county departments take notice of their losses, and she uses pool dividends to pay for programs that help them reduce exposures.

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The training programs she has implemented help remind county workers — many in jobs such as public works and public safety, where hazards are common — to think of safety first.

“What (the risk management) office has done is really entrenched in the county,” said Jay Lanham, assistant chief for the Prince William County Police Department's operations division. “I mean, everybody pays attention to (safety) all the time. They keep us thinking about it, which is good.”

The results speak for themselves.

The county's general liability losses have remained below $30,000 a year for more than 10 years, “which is amazing for a public entity when we have a jail, a sheriff's department, a police department, a fire department, public works and a landfill,” among other departments, Ms. Gray said.

The Public Risk Management Association recognized Ms. Gray's work by naming her the 2008 Public Risk Manager of the Year.

However, she also has faced challenges.

Ms. Gray recalls her first day on the job, when she found the files for the county's self-insurance program and risk management left unattended in a hallway.

“The first three years were a struggle,” she said. “It was starting from scratch.”

Earning respect for her division meant conducting an enterprisewide risk assessment.

She also fired the third-party administrator after it failed to heed her warning to improve, and then she completely restructured the county's handling of claims.

Ms. Gray also learned about the health and safety needs of county departments by listening to their needs, and she hired experienced risk management division employees capable of managing themselves when incidents needing their immediate attention arise.

“We are given authority to do what we know needs to be done,” said Jennifer Boeder, an environmental specialist in the risk management division. “She is not a micromanager.”