What Are Loss Run Reports, and Why Do They Matter?

Loss run reports are the insurance industry’s equivalent of credit scores. In the same way that a bank would want to examine your company’s credit score before lending you money, insurers want to see a loss history before granting coverage. A Loss Run Report will assess how well the company is managed and operated.

In the insurance sector, the terms “loss run” and “loss run report” are often used. As a business owner, you should be familiar with this word because you will almost certainly be asked to submit a loss run report with new insurance applications or while renewing your policy.

What are insurance loss runs?

Insurance loss runs are reports on the history of your company’s insurance claims. These records detail previous claims submitted under your insurance plans. Among the insurance policies are:

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

Loss run reports assist an insurance carrier in determining whether or not to extend coverage to a firm and, if so, what the premium should be.A history of numerous, costly insurance claims, for example, may result in a higher premium, but a history of no claims may qualify a business for reductions.

Why are insurance loss runs important?

The most important reason to maintain your insurance loss runs up to date is that they affect your insurance premiums. In some cases, a loss run report with determine whether an insurer will provide you a policy at all. They assist insurance firms in identifying the risks associated with your organization and determining what insurance terms they may give you.

However, there are additional advantages to keeping loss run records for your company. You can use them as a tool to examine the risks that your organization confronts and design risk-mitigation strategies. They can assist you in identifying flaws in your operations and implementing preventative actions.

If you can show that corrective efforts were taken to eliminate hazards, you may be able to persuade an insurer to cover your company. Additionally, when looking for insurance plans, evidence of a clean claims history might assist you in finding and negotiating lower costs.

What do loss run reports look like?

An insurance loss run report provides a comprehensive view of how your company used its insurance policies throughout the current and previous policy periods. It typically contains various types of information, such as:

  • Information about you or your company:
  • The name of the insured (either your own name or the name of your business)
  • A postal address
  • A unique identifying number.
  • Details concerning the insurance coverage, such as
  • Policy name
  • Type Policy provider
  • Policy identifier
  • Policy term

Details regarding your claims, such as:

  • Date of loss report value (Important since it demonstrates that all of the information is current and up to date)
  • Claim dates are the dates on which the incident was reported.
  • Incident description, including all necessary details
  • Claim type (for example, professional liability, general liability, workers’ compensation, etc.)
  • Amount paid by insurance to date for fees, settlements, rewards, legal costs, property damage, medical expenditures, or other expenses.
  • Amount set aside as a reserve fund for future costs.
  • Status of a claim (open or closed)

If no claims are filed, the report will simply state, “No losses documented.”

Please keep in mind that even if there are no claims, a loss run report is required to prove previous coverage and experience.

How do I acquire a loss run report?

Simply notify your insurance broker, agency, or insurance carrier that you require a loss run report. Indicate the number of years of claims history you require, as well as the date for receiving the information.

The following information should be included in your request for a loss run:

  • Which policies do you want the reports for?
  • Name and policy numbers of the insured
  • The number of years or policy periods for which you require historical data.
  • When you require the reports

You may not need to file an official request with the insurance in some instances. Some insurance companies have websites or online portals where you may get your loss run reports.

Your insurance rates are affected by your claims history

Please keep in mind that your company’s insurance prices are influenced by your claims history. As a result, risk management is critical to avoiding potential claims and demonstrating to insurance carriers that you are committed to and skilled in managing the risks that come with running a business.