What are Loss Runs and How to Get Them – Workers Comp 101
Every business has a documented history of its insurance claims, known as loss runs. These reports are crucial for insurance providers to assess a company’s risk profile and determine appropriate coverage and premiums.
What are loss runs?
Loss runs are detailed reports generated by insurance carriers that outline a business’s claims history over a specific period, typically the past three to five years. Each report includes information such as:
- Policy details: Carrier name, policy number, and coverage dates
- Claim information: Date of loss, type of claim, status (open or closed)
- Financial data: Amounts paid and reserves held for each claim
These reports are essential tools for underwriters when evaluating new insurance applications or renewals.
Why are loss runs important?
Insurance companies use loss runs to:
- Assess the frequency and severity of past claims
- Determine eligibility for coverage
- Calculate premiums based on risk exposure
A business with minimal or no claims may benefit from lower premiums, while a history of frequent or severe claims could lead to higher costs or coverage denial.
Types of insurance that use loss runs
Loss run reports are commonly used across various commercial insurance lines, including:
- Workers’ compensation
- Professional liability
- General liability
- Commercial property
- Business Owner’s Policy (BOP)
Why do insurance companies need copies of loss runs to provide a quote?
In addition, to using a company’s ex-mod, nearly all insurance companies will require a loss run report to issue a workers comp insurance quote. This is a standard part of the application process. Underwriters use the report as a tool to help determine how much risk a prospective client may pose to the insurance company.
A business with multiple losses or high-dollar claims would likely be riskier to insure than a business with a squeaky clean track record. As such, a carrier may decide to quote the riskier business a higher premium or decline them for coverage altogether.
What information is included on a loss run report?
Each insurance carrier generates their own reports, so the information included may vary slightly from carrier to carrier. However most will include:
- Name of the insurance carrier
- Name of the insured business
- Policy number(s)
- Policy coverage dates
- A valuation date (when the data on the report was generated)
- Claim number
- Date the loss occurred/date the claim was reported
- Type of claim
- Status of claim–open or closed
- Total amount paid on the claim to date
- Total amount being held in reserves for the claim
How to request loss runs
- Contact Your Current Carrier: Reach out to your insurance provider’s customer service or claims department.
- Submit a Written Request: Some carriers require a formal request via email or letter. Include your business name, policy number, and the specific years of history needed.
- Use Online Portals: If available, use your insurer’s online portal to request or download loss run reports.
Note: Many states mandate insurers to provide loss runs within a specific timeframe, often 10 days. If delays occur, consider contacting your state’s insurance commissioner.
Special Considerations
- Multiple Carriers: If your business has switched insurers over the years, request loss runs from each carrier to compile a complete claims history.
- New Businesses: Startups or businesses without prior insurance history may not have loss runs. In such cases, insurers may require alternative documentation or assessments.
- Currently Valued Reports: Insurers often require loss runs to be “currently valued,” meaning the report’s valuation date is within 30 to 90 days of the application date.
How long does it usually take to receive loss runs?
Turnaround time for receiving loss run reports after submitting a request varies by insurance carrier.
Some insurance companies are swift and responsive, while others seem to drag their feet. These slow responders have created problems for many insureds over the years–so much so that many states now have laws in place requiring that insurance companies respond to loss run requests within a specific time frame, according to FindLaw.
Additionally, be sure to retain written documentation of your requests, and if you do not receive your loss run report within a reasonable amount of time, contact your state’s commissioner of insurance.
How many years of claims history will I need to request?
Most insurance companies require at least two to five years of claims history on a prospective insured. It’s always helpful to double check with the carrier to find out how many years they need before submitting any requests for loss runs.
What if a business had policies with more than one carrier?
Loss run reports are provided by individual carriers. If a business had policies with more than one carrier, they need to request loss run reports from each carrier individually.
What does “currently valued” mean?
Loss run reports typically include a valuation date that reflects when the data on the report was generated. This valuation date helps ensure that potential insurers are receiving the most up-to-date information on any open claims and any new claims that may have recently occurred.
“Currently valued” loss runs have a valuation date that falls within a certain timeframe determined by the carrier. Carriers often require that loss runs be currently valued within 30, 60 or 90 days–meaning the valuation date listed on the loss runs must fall within 30, 60, or 90 days of the application date.
Foresight: Integrating Safety and Technology
At Foresight, we specialize in providing workers’ compensation insurance for safety-critical industries. Our approach combines comprehensive coverage with our proprietary safety management platform, Safesite, offering:
- Proactive Risk Management: Tools and resources to identify and mitigate workplace hazards.
- Dedicated Safety Coaching: Expert guidance to enhance your safety programs.
- Data-Driven Insights: Real-time analytics to monitor safety performance.
Ready to Learn More?
Business Owners: Ask your agent about Foresight or find a broker.
Insurance Agents: Submit your client’s information for a competitive quote today.
