Examining your loss run reports can be a great way to help ensure you are getting the right insurance coverage. But did you know they also provide an opportunity to identify incident trends and implement better safeguards against losses that can impact your business?
Loss run reports can provide business insights
A loss run report is a snapshot of insurance claims previously filed against your insurance policy. If none have been filed, the report will say, “no losses reported”. Otherwise, in addition to listing your business name, policy number, and policy term, it will typically include the following information for each filed claim:
- Loss report valuation date
- Date of claim
- Date claim was reported
- Incident description (reason for claim)
- Policy type (for example, employment practices liability, non-trucking liability & physical damage, workers’ compensation)
- Amount paid to date by insurer in legal/defense costs
- Amount paid to date by insurer in settlement costs, property damage, medical expenses
- Amount insurer has set aside for future costs (reserve funds)
- Claim status (open, closed, pending)
By reviewing the report, insurers are assessing for trends in how you are mitigating and reducing risks in your business. Insurers look at loss run reports similarly to how financial institutions use credit scores. These reports help them evaluate how risky it may be to insure your business, influencing your premiums and terms of insurance. They could even decide to not issue a policy at all.
Loss run reports do not only help insurers identify your business’s exposures, however. You can also use them yourself to review your claims history and analyze your opportunities for growth.
Loss run reports can reveal inaccuracies
For these reports to accurately reflect how well your business is operating and managed, it is crucial that your insurance claims have been correctly reported. Inaccurate claims information on a loss run report can unfairly degrade your business's risk profile, making your business look riskier to insurers. Therefore, it’s important to resolve any issues as soon as possible.
- Do you recognize the incidents in question?
- Were the individuals and any vehicles involved operating for your business on the date of loss ?
- Are the claims correctly assigned to your business?
Loss run reports can expose trends
While some claims may reflect unrepeatable catastrophes or situations beyond your business’s control, others may uncover hazards and issues that are inherent to your business operations. Frequent claims activity — especially for similar incidents — can expose weaknesses in your maintenance schedules and business practices.
Evaluate your loss run report for any common occurrences and see if you can identify any trends. For example, you may notice that many of your workers’ compensation claims are due to slip, trip, and fall hazards. As another example, your physical damage loss run may bring to light that certain routes/runs have a higher incident frequency than others. Ask yourself:
- Are there persistent delays in claim reporting?
- Are there certain hours of the day where mishaps are occurring more than others?
- Have certain employees been involved in more accidents recently who may need more training?
If there are trends in claims, consider implementing or adjusting existing safety and training programs for your employees to help reduce the incidents. Evaluate these programs to ensure adequate orientation and training time is dedicated to the employee groups or loss types frequently seen in the loss run report. Additionally, look over your employee handbook to ensure written policies and processes are in place for you and your management team to follow consistently. You may also consider reaching out to your regional account management team for loss prevention resources.
Reviewing your loss run report can be a great way to assess your business operations and understand how insurers may perceive your risk exposure.
For more information, reach out to a member of your dedicated regional account management team.