What Are Insurance Loss Runs? | Workers' Comp 101 | Pie Insurance

The term “loss run” or “loss run report” is commonly used in the insurance industry. As a business owner, it’s important to understand this term because you’ll likely be asked to provide a loss run report with new insurance applications, or when renewing your insurance. Typically, you’ll be asked for insurance loss run reports that include up to five years of history, or for the entire period of coverage if less than that.

So what exactly is a loss run report, and why do insurance companies ask you to provide one? In this article, we’ll explore the specifics of insurance loss runs, why they matter to your business, and how to get one.

What are insurance loss runs?

Insurance loss runs are reports of your business insurance claims history. These reports show the previous claims that have been filed under your insurance policies. The insurance policies include:

• General liability insurance
• Business owner’s policies
• Commercial property insurance
• Workers’ compensation insurance
• Commercial auto insurance

Think of insurance loss run reports as the insurance world’s equivalent of credit scores.

Just like how a credit score helps financial institutions determine whether an individual is a good candidate for a loan or credit card, a loss run report enables insurers to assess how risky your business is—and how risky it will be to insure. Your loss runs enable insurers to review the frequency, type, and financial impact of claims you’ve filed in the past.

This information allows the insurance company to determine how competent your business is at managing and minimizing risks in your workplace. These are primary criteria in deciding what insurance terms they can offer your business.

Loss run reports help an insurance provider determine whether or not it can offer coverage to a business and, if it can, what the business’s premium should be. For example, a history of frequent, expensive insurance claims may lead to a higher premium, whereas a history of no claims may qualify a business for discounts.

Why do insurance loss runs matter?

The most significant reason to keep your insurance loss runs updated is that they have an impact on your insurance premiums and whether an insurer will issue a policy to you at all. They help insurance companies identify the risks associated with your company, and decide what terms of insurance they can offer you.

However, there are also other benefits to your business in maintaining loss run reports. You can use them as a tool to analyze the hazards your company faces and to develop strategies to mitigate the risks. They can help you find weaknesses in your operations and take measures to prevent losses.

If you can demonstrate that corrective measures were taken to eliminate hazards, it might influence an insurer’s position on whether to cover your business. Also, while shopping for insurance policies, evidence of a clean claims history can help you find and negotiate better premiums.

What do loss run reports look like?

An insurance loss run report provides an overall picture of how your business has utilized its insurance policies during current and previous policy periods. Typically, it consists of several kinds of information, including:

• Information about you or your business:
  • The insured’s name (either your own name or the name of your business)
  • A mailing address
  • An identification number
• Information about the insurance policy, including:
  • Policy provider
  • Policy name and type
  • Policy number
  • Policy term
• Information about your claims, including:
  • Loss report valuation date (critical because it shows that all the information is current and up to date)
  • Dates of claim
  • Date the incidence was reported
  • Description of incident, including all relevant details (reason for claim)
  • Category of claim (eg. professional liability, general liability, workers’ compensation, etc.)
  • Amount paid to date by insurer for fees, settlements, rewards, legal costs, property damage, medical costs, or other expenses
  • Amount set aside for future costs as reserve funds
  • Claim status (open or closed)
• Information about your lack of claims:
  • If there are no claims, the report will simply say, “No losses reported”
  • Please note that a loss run report is needed even if there are no claims, to verify past coverage and experience
• Other considerations:
  • Each claim is typically listed on its own line
  • If you’ve had coverage with more than one insurer over the period required, you need to request a loss run from each of these companies
  • Any type of business can request a loss run report, regardless of their size or industry, for almost any type of commercial insurance

Where to find an insurance loss runs report and how to request one?

You can get a loss run report by contacting the customer service department of your insurer.

Your loss run request should include the following specifics:

• What policies you’d like to get the reports for
• The insured’s name and policy numbers
• The number of years or policy periods for which you need the history
• When you need the reports

In most states, the insurer is required by law to provide this information to you, usually within 10 business days. If you feel that your insurer is purposely delaying or avoiding sending you the reports, or if they do not do so within the required period, you can lodge a formal complaint with your state’s Department of Insurance.

In some cases, you may not need to file an official request with the insurer. Some insurance providers have websites or online portals from which you can directly download your loss run reports.

Claims history affects your insurance rates

Please remember that your claims history affects your company’s insurance rates. Therefore, it’s crucial to practice risk management to prevent potential claims—and to show insurance providers that you are committed and competent at managing the hazards that come with running your business.

Establishing good safety programs, following OSHA regulations, and conducting regular risk assessments to ensure that you’re doing everything you can to protect your business and employees from risks go a long way in reducing your claims. A reduced claims history, in turn, can save your company in premiums and other claims and settlements in the long run.

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Thanks for reading! Please note that this content is intended for educational purposes only. As laws change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about workers’ compensation or check your current rate in 3 minutes.