What Are Loss Runs and How Are They Utilized?

Loss runs are documents that provide a historical record of an organization’s insurance claims and the associated costs. They serve as a comprehensive overview of an entity’s claims experience with an insurance carrier over a defined period. This information is routinely reviewed by various parties within the insurance industry and by businesses themselves to understand past claim activity and potential future risks. These reports consolidate data regarding reported incidents and their financial impact, offering insights into an organization’s claims history.

Defining Loss Runs

These reports typically span a period of three to five years, though longer or shorter durations can be requested. Their fundamental purpose is to provide a comprehensive and chronological account of all reported claims, regardless of their current status. This historical data offers transparency into an organization’s past insurance performance and its exposure to various risks.

The reports essentially act as a claims ledger, documenting each incident that resulted in a claim filing. They provide an objective record that helps both the insured and the insurer understand the frequency and severity of past losses.

Information Contained in Loss Runs

A loss run report typically includes specific data points for each claim filed under an insurance policy. For each incident, the report details:

• The claim number, date the loss occurred, and date the claim was reported to the insurer.
• The type of loss, such as property damage, bodily injury, or workers’ compensation.
• Financial information, including the amount paid out and any reserve amounts for future payments.
• The current status of each claim (open, closed, or closed with subrogation recovery).
• The claimant, a brief description of the incident, and the policy period under which the claim was filed.

How Loss Runs Are Utilized

Insurance carriers regularly use loss runs during the underwriting process for new or renewal policies. They analyze the frequency and severity of past claims to accurately assess the risk profile of an applicant or existing policyholder. This assessment directly influences the premium calculations and the terms and conditions offered for coverage.

Businesses also utilize loss runs to review their own claims performance and identify trends in their operations that might contribute to losses. This internal review can inform risk management strategies, allowing organizations to implement measures aimed at reducing future incidents and improving workplace safety. Insurance brokers or agents often use these reports to advocate for their clients, negotiating favorable terms and pricing with various carriers based on a clear presentation of the client’s claims history.

Requesting Loss Runs

Obtaining loss runs from an insurance carrier or broker is a standard procedure for policyholders, typically involving contact with the current or former insurance provider directly, through a customer service or claims department. Policyholders usually need to provide their policy number, the specific coverage type for which the report is needed, and the desired date range for the claims history. The timeframe for receiving loss runs can vary. Some carriers may offer digital access to these reports through an online portal, which can expedite the process. It is common practice to request these reports annually or when seeking new insurance quotes to ensure accurate and up-to-date information is available for review.