What Is a Loss Run Report?
By Oni Harton, J.D. | Legally reviewed by Melissa Bender, Esq. | Last reviewed April 12, 2024
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Having an insurance policy can provide a sense of security. Insurance coverage brings peace of mind, knowing you've taken steps toward risk management. You make regular insurance premiums and expect a smooth process if your business needs to file insurance claims.
You might be wondering how the process works. How does your claims history impact pricing for a new insurance policy? Will the claims made in the past result in a higher premium?
Insurers review your loss history as a policyholder to make underwriting decisions. Analyzing loss run reports is a critical part of the underwriting process.
An insurance loss run report from your current insurance carrier provides valuable information for you and your insurer. Read on to learn about loss run reports and their role in obtaining and maintaining insurance.
How Is a Loss Run Report Used?
A loss run is a report generated by your insurance company. It shows the claim activity on each of your insurance policies. A credit score lets lenders know whether you or your business is creditworthy. Lenders use it to determine whether to issue you or your business credit cards or loans.
A loss run report can identify the level of risk insurance providers face if they insure you or your business. The content of your loss run report determines the insurance pricing.
The loss run serves several purposes, including the following:
- Informational: It gives you a detailed account of the claims activity on your policy during a given policy term or terms.
- Initial Assessment: This helps the insurance company evaluate your claim activity and assess risk. Underwriting business insurance involves determining pricing and other terms. A loss run report is a tool in this process.
- Ongoing Assessment: This helps the insurance company decide whether or not to renew an insured's policy.
- Shop Around: Knowing the types of claims on your loss run report, if any, can help you obtain better pricing. A clean claims history may allow you to get a better rate from a different insurer.
You may benefit from using the loss run report to prove you're a low-risk insured. This may support getting discounted pricing when negotiating premiums and terms.
What's in a Loss Run Report?
If your business has never filed a commercial insurance claim, the loss run report would state "no losses reported." The typical loss run report will provide the following information:
- Insured's name (individual or small business owners)
- Insurance policy number
- Policy period for the insurance policies
- Loss report validation date
- Date of each loss and claim
- Type of business insurance claim (insurance policy)
- A brief description of the claim
- Amounts paid to the insured in settlement costs
- Amounts paid for the insured's legal/defense costs
- Amounts in the reserve funds for future costs if you have an open claim
- Whether the claim is an open claim or a closed claim
Contact your insurance company if anything in your loss run report needs to be revised. Your insurance company should be able to explain any past insurance claims.
Having no past claims will serve you well. Frequent or severe claims can be a warning to underwriters. It may signify the need for better business operations or management. The reports give the insurer a clear picture of the risk of insuring your company.
You may also leverage the loss run report to find weaknesses in operating protocols. Implementing corrective measures can prevent losses. This could benefit you during underwriting.
How To Obtain a Loss Run Report
Requesting a loss run report is simple. Getting a loss run report can be challenging. Your insurance company may not want to send your report. You should be able to get a loss run report for business insurance coverages such as the following:
- Workers' compensation insurance
- Professional liability
- General liability insurance
- Commercial auto insurance
- Commercial property insurance (covering property damage)
- Business Owner's Policy (BOP)
You may be shopping around for a different insurance carrier. Each state regulates the insurance industry operating within its borders. Each state has an insurance department and applicable state laws. These laws can require companies to provide loss run reports within specified timeframes. These timeframes can be 10 days.
To request the report, first try to call or email your insurance agent and make a loss run request. It will be easier to follow up and to maintain records. You can also send a letter to your insurance company or call and ask for the report.
You may contact your state's insurance commissioner if your agent or company fails to honor your requests. If your insurance company is uncooperative or unethical, it may be guilty of a breach of contract or bad faith. An insurance attorney can help you understand your rights. They can explain whether you have grounds to file a lawsuit.
Know and Defend Your Insurance Rights
Do you need help with your insurance company? As insurance consumers, you're probably not an expert in insurance law. You pay your premiums expecting coverage when you need it.
Whether you're trying to obtain your loss run reports or dealing with an insurance company that won't honor its obligations, an experienced professional can help. Contact a local insurance attorney. They can explain your legal options and protect your interests.
Next Steps
Contact a qualified attorney to assist with any issues related to insurance.
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