What are Loss Runs and How to Get Them – Workers Comp 101
Good, bad, or ugly, every business has a well-documented history of all their past insurance claims—or lack thereof. The details of a company’s past claims can be found in their loss runs.
Loss run reports help insurance providers determine whether a business is eligible for coverage and how high or low their rates will be.
What are loss runs?
Loss runs are a written report that provides a snapshot of a business’s past insurance claims. These reports are generated by the insurance carrier and include details such as the type of claim, when it occurred, and how much has been paid out by the carrier.
Loss runs are most frequently used when applying for an insurance policy with a new carrier. However, they can also be a valuable tool to help business owners monitor and improve their operations and safety practices.
Which types of business insurance uses loss run reports?
Carriers’ use these reports to show claims history for a variety of business insurances, 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 do I obtain loss runs?
- To start, loss run reports are provided by insurance carriers, and each carrier has their own procedure for processing report requests.
- Some insurers require a written request from the insured via letter or email, while others offer more convenient online portals.
- If you’re not sure who to contact, reaching out to a carrier’s main phone line or customer service team is a good place to begin. The folks at loss-run.com have also compiled a handy directory of loss run contacts at individual insurance carriers that may help point you in the right direction.
How do I request loss runs from the state fund?
State funds function similarly to other insurance carriers in that they each have their own procedures and processes for loss run requests. If you aren’t sure where to start, try calling, emailing, or writing to the state fund directly.
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 does not have loss runs or is new?
If your company, or your client’s company does not have previous loss run reports because they are new or just now qualify, please read this article.
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 would 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.
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