When was the last time you reviewed a claims history report (aka "loss run report") for your business? If it’s been more than a year, or maybe never, you may be missing out on important information that can help you reduce your workers’ compensation insurance costs, and improve the overall safety and well-being of your employees.
Loss run reports are produced by insurance carriers and provide a history of your business insurance claims. Because claims history is one of the factors that impacts insurance premiums, at a minimum business owners should review loss run reports annually to make sure they are accurate and current. Policyholders can request a loss run report from their agent or carrier at any time. At EMPLOYERS®, we provide a self-service policyholder portal that customers can access to generate their own loss run report for each policy we have issued them.
Here are three things to examine in your loss run report.
1. Is all of the information accurate?
A loss run report contains details about each claim that has been filed against your insurance policy. An EMPLOYERS loss run includes the name of the claimant, the type of injury, illness or fatality, the amount of money reserved for the claim, a brief description of the loss, whether the claim is still open, and whether the claim has been litigated. As a business owner, you should be able to identify every claim and injured employee on the report. The frequency and severity of your claims will be factored into your Experience Modification Rate, sometimes referred to as XMod, which is one of the components used to determine your future premium. Incorrect information and claims that are not valid could potentially affect your premium. If you find an error – or worse, see something you don’t recognize – immediately contact your insurance carrier or agent so they can investigate.
2. How do I spot trends?
In addition to providing the current status of each individual claim, loss run reports are even more useful for spotting trends. At EMPLOYERS, we provide a detailed analysis of each policyholder’s loss run report. Our reports break your claims down by location, type and cause of injury, day of the week, time of day, time to report, and cost per claim. This analysis can help you evaluate trends and identify areas for improvement.
For example, employers with multiple locations might pick up on a greater propensity for injuries at one facility over another. Another pattern that might be identified is the frequency of claims by specific individuals. This information can help business owners and agents discuss steps to foster a culture of safety and reduce the likelihood of future claims.
3. What are reserves?
If you have open claims, you may see a column called reserves or medical reserves on your loss run report. The amount held in reserves for each claim is how much money was set aside by the insurer to cover the anticipated costs of obligations associated with the claim. It is calculated by assessing the likely medical, indemnity and other expenses of each injury or illness. Insurance carriers try to calculate the expected costs of a claim as accurately as possible. However, the reserve amount could potentially be higher or lower than what ultimately gets paid out.
A loss run report is an important tool that provides business owners a clear picture of their claims history and shows how losses can potentially contribute to increased premium costs. For this reason, a loss run report is one of the most important documents to regularly review and understand. If you notice any discrepancies or have questions about the information reported in your loss run report, contact your agent or workers’ compensation insurance carrier.