Everything You Need to Know About Insurance Loss Runs
Gallagher Healthcare :: Industry InsightsBy Gallagher Healthcare | 2/21/2023
Everything You Need to Know About Insurance Loss Runs
Having an insurance policy in place for your medical practice can provide security for greater peace of mind. However, as a policyholder, you may not think about your insurance other than when you need to pay your premium or file a claim. If you have questions about your claims history or are shopping around for new insurance, obtaining a loss run report is essential.
At Gallagher Healthcare, we can use your loss run report to help you find an insurance solution for your medical practice. We have years of experience and are a trusted resource for medical practices across the country. Contact us today to learn more!
What Is a Loss Run?
A loss run report is similar to a credit score report. Much like how most banks require lenders to provide their credit scores before qualifying for a loan, most insurers need to see a loss history before offering coverage. A loss run report shows how well a business operates and manages itself.
Some claims are unavoidable, such as a building experiencing damage due to weather. However, having several incident claims, such as water damage from a leaky roof, can reflect a poor maintenance policy. A loss run report demonstrates to an insurance company how committed your business is to minimizing risk potential and enables your insurance provider to determine the terms they are willing to offer.
Similarly to how a credit score allows a bank to determine if they should give your business a loan, loss runs help determine the risk level an insurance company faces if they offer a policy to your business.
When reviewing your loss report, an insurance company will determine the severity of losses and the frequency of which they occur. The severity of a loss can signal a one-time incident or a significant hazard in your company's operations. Frequent claim activity can also signal that your maintenance schedule, business practices or manufacturing processes are weak. Before submitting a loss run, ensure you explain all loss activity.
What Do Insurance Loss Run Reports Include?
If this is your business's first time filing a claim, your loss report will state “no losses reported.” Companies that have filed a claim before can expect to see the following:
- Your company name
- Name of your insurance company
- Policy number
- Loss report valuation date
- Policy term
- Claim date
- Date of the reported claim
- Incident description and reason for the claim
- Type of claim based on your insurance policy
- Why you are filing the claim
- Amount paid to date by your insurer in legal/defense costs
- Amount paid to date by insurers in settlement costs, property damage and medical expenses
- Any reserve funds from the insurer
- Current claim status
The valuation date of a loss run insurance report is an essential component, as it establishes that the current information is credible and up to date. An underwriter may discount any data older than six months, as claim situations can frequently change. A business of any size or expertise can request a loss run report.
Why Would You Need a Loss Run Report?
The primary reason for needing a loss run report is for insurance providers to identify the risk associated with your company. However, a loss run report can also be a tool to analyze any potential operating hazards related to your company and enable you to establish a plan to correct or prevent future damage and occupational hazards.
While most businesses view loss run reports as a tool for insurance carriers, when leveraged correctly, this document can help your business find weaknesses in operating protocols. If your company can show it has taken measures to prevent future losses, it may influence the underwriter to grant you more favorable terms.
A loss run report can be beneficial when seeking better insurance premiums, and having a clean claims history can result in a lower insurance rate.
What Are Loss Run Reports Used For?
A loss run report shows your business's liability insurance policies claim activity. Businesses and insurance companies can use a loss run report for various purposes, such as:
- Informational: View a detailed account of the claim activity on your policy during a specific policy term or terms.
- Initial assessment: Your insurance policy will use a loss run report to assess the risk level associated with insuring you and determine what your pricing and other terms will entail.
- Ongoing assessment: This component allows your insurance company to decide whether to renew your policy.
- Shop around: Businesses can use their loss run report to obtain better pricing with a different insurance company if their claims history has little activity.
How Do You Get a Loss Run Report?
To receive a loss run report, contact your insurer through your advisor. Depending on your relationship with your insurance advisor, you can call or email them to have a record of your request. You can also send a letter or call to ask for a fax number.
Most states require insurance companies to send the requested information in 10 days or less. During the process, ensure you keep a record of your loss run requests. Contact the insurance commissioner for your state to lodge a complaint if your insurance company fails to provide a loss run report.
After getting in contact with your advisor, it's essential to tell them specifics such as:
- What liability insurance policies you'd like to get a loss run report for
- How many years of claims reports you need
- When you need the report
How Do I Read a Loss Run Report?
Loss runs insurance reports typically follow a similar format. The report will list each claim with a description and how much you have paid. While looking over your loss run report, pay attention to:
- Accuracy: Any errors can impact your insurance premium. As you review your report, ensure it is accurate, and notify your insurer of any mistakes.
- Claim frequency: It is also helpful to note any trends in your claims history. If you notice a particular claim appears multiple times or during a specific season, it can indicate a larger problem with your business's safety measures or operating procedures.
Minimize Loss With Gallagher Healthcare
As an owner of a medical practice, it's essential to know how to use your loss run report to minimize losses and choose the correct insurance policy. At Gallagher Healthcare, we provide professional support for finding a policy that best fits your medical practice. Our expert team can offer a free analysis and walk you through several recommendations based on your practice's risk factors. Please request a free quote today to learn more about our insurance services!