Your workers compensation loss run is a valuable tool when it comes to claim management for your company. If you’re an employer you should know how to read your workers compensation loss run. If you don’t know what a loss run is or how it fits into the overall workers comp picture then please read on…
A loss run is the official record of claims for any employer. They are produced by the insuring carrier during the time period in question. They will show:
- All Claims, those incurred during the policy period;
- Open Claims, those that are active;
- Closed Claims, those that have been settled and are no longer active;
- Payments Made, claim dollars that have already been paid out;
- Claim Reserves, claim dollars set aside for projected future payment;
- Claimant Name, the injured employee;
- Claim Number, the claim number assigned to the account;
- Injury Type, what happened to the worker;
- Date and Time Claim Occurred;
- Description of Claim, a written description of the accident;
- Medical, that portion of payments which was applied to medical attention;
- Indemnity or Compensation, that portion of payments that went to pay the employee for lost wages;
There’s a few more items you can usually find on a loss run but these are the main ones. As you can see, there’s a ton of information available.
When reviewing loss runs, pay attention to those open claims, with reserves, that are less than 5 years old. Typically it’s those claims that will have an impact on your experience rating or EMR.
Loss runs are a tool that should be used by an employer to gain a better understanding of their claims and how those claims are effecting the premiums the employer pays. Some obvious situations are:
- Open reserves found on old claims;
- Open claims that have been settled but remain open on the loss runs;
Some not so obvious are:
- Over reserved open claims;
- Accuracy of Claim Handling;
- Accurate investigation of claim for coverage;
- Accurate reporting to NCCI or other rating bureau of claim data.
A few tips:
- Ask your insurance agent to provide you with currently valued (updated numbers) loss runs at least two times a year. Review and compare them with the last set you received.
- Ask your insurance agent about any increases you may notice in a claim reserve. Learn about your claims!
- Be sure to establish contact with your claims adjusters. Send them an email with contact information and ask that they keep you up to date on the status of your claims. Let them know you’re involved!
- A word of caution…be careful when talking with a claim adjuster about reserves and reserve adjustments! Sometimes workers comp claim reserves are under-reserved and you may just remind the adjuster that they wanted to make an increase reserve adjustment. Knowing which claim to approach is a bit of an art. So do be careful and if you need help be sure to contact a workers compensation consultant.
I often write about claims, their effect on workers compensation premium and the importance of having a claim and reserve review conducted. But for the small employer a full blown claim review may not be feasible. So loss runs are a great place to start. As a matter of fact we ask to review loss runs for our clients as a part of a thorough audit review!
Hope this helps out!
Thanks!
