Loss runs or claim records provided by insurance carriers can be easily turned into an effective tool of preventing future losses if analyzed and used properly. As one of the most important tools to predict claims within a company, loss runs are routinely overlooked as an script for improved safety and health within the workplace. Consider the following when looking over your next set of loss runs from your business insurance carrier:
- Lag period – The time it takes to report a claim from the date it actually occurred. Lag periods offer a glimpse into how long a claim may be delayed resulting in higher costs. When lag times are high, greater than 72 hours, it may be indicative of poor communication, misunderstood reporting procedures, or claims fraud.
- Repeat claimants – Identifying those employees that routinely suffer from injuries is a look into the proverbial crystal ball of high costs. Repeat claims by one employee can indicate a trend that is dangerous to other workers as well. If a worker suffers numerous injuries, they will likely suffer a much more severe injury later due to poor work practices or outside distractions.
- Open claims – the number of open claims on the loss run may have a substantial impact on cost for your company. If your open claims slide into the next year, your experience modification factor may too increase, resulting in higher premiums. Open claims must be monitored and closed as soon as possible in order to minimize financial impact.
- Repeat injury types – Cuts, abrasions, and falls, if identified as a loss leader may be a symptom of a greater problem if left unchecked. Consider using the professional safety services of your insurance broker or carrier to analyze your loss runs for trends and subsequent loss prevention strategies. You will be surprised how eager they may be to assist in reducing your company’s exposures and overall claims costs.
- High reserved claims without payment – If a claim has a high reserve attached to it but no paid amount to the claimant, it may be time for a call to your insurance carrier claim adjuster. High reserve claims must be managed like open claims above. It may be best to call your adjuster on a routine basis ensuring your claims are being managed within the insurance company and paid on a timely basis.
When it comes to claims, only one this is certain…If left unchecked or monitored, they can balloon into a high cost venture for both your company and the insurance carrier, ultimately costing your organization a lot of time and money. Keeping tabs on the claims aspect is critical to risk management and loss prevention.
