When reviewing your loss runs or mod worksheet you’ll run into the codes or following descriptions. A quick overview of the common injury types are outlined below.
Permanent Total—Claimant expected to never be able to return work
Permanent Partial—Claimant expected to return to work but with some permanent impairment or disfigurement
Temporary Total—Claimant expected to recover fully
Medical Only—No benefits for lost wages are expected to be paid
While nearly every business owner is familiar with their “loss runs” it’s surprising how many companies aren’t reviewing their claims data on a regular basis. Loss runs are a snapshot of all your claims, open and closed, for a given period of time.
Listen to this scenario and ask yourself if this is how you operate. 60-90 days out of your insurance renewal your receptionist or office managers are fielding call after call from agents and brokers looking to quote your insurance. Maybe you “shop” every year or maybe it’s been a few years now and reluctantly you decide it’s time to bid out your insurance. The new agent comes in and before he can give you the pricing, he needs to get a hold of your loss runs. The meeting is over and your current agent or carrier reluctantly release the information, knowing very well, you’re making the request for competing agents and brokers. Maybe when you get your loss runs you notice a claim or two that surprises you, either by a larger payout than you expected or were aware of or perhaps one that’s still open that could be closed. A quick phone call to your broker and things are fixed or at least you get a good explanation of what happened to make the claim spiral the way it did.
Regardless whether you changed carriers, brokers, or otherwise, this is how many business owners only experience with their loss history.
I’m sure we can all agree there’s a better way to handle this. At the same time, what if your company isn’t large enough to have a full time risk manager or safety manager who can review the claims on regular basis. Let’s suppose the burden of reviewing the insurance and claims history is on a CFO, office manager, or owner. Take it a step further that whoever that individual is just doesn’t have time to review claims on a regular basis.
So what should you do?
- Have a policy and procedure in place to handle claims when and if they happen
- Make time to check your claims prior to your valuation date- not just when it comes time to market your insurance
These two simple steps can have an immediate and drastic impact on your market rates when you shop the insurance, as well as the price you’ll pay for years to come.
Next post we’ll review the dollar impact with some claims examples.