Studies show same-day reporting a business claim can save thousands
- For commercial clients, it’s often a gamble: Do I report or try to pay out-of-pocket?
- However, reporting an incident on the same day (or next day) that it occurs can potentially result in significant savings.
- Having an adjuster on the scene straightaway aids accident investigation before witnesses’ memories fade.
- Prompt reporting means an injured employee or guest receives faster help, also resulting in savings.
You know the dilemma: A mishap occurs on your commercial client’s premises. A customer slips and falls, but seems to be OK except for a twisted ankle. A worker sprained his shoulder lifting heavy boxes. A driver was involved in a minor fender-bender. Another driver backed the truck right into the back door, taking out the door frame and part of the wall. Fairly minor stuff, right? And your client is faced with the decision: Pay for it out of business funds or alert you or their claims contact and risk a possible rate increase? What’s a business owner to do? Will reporting a business claim promptly save or cost your client money in the long run?
Related: How can you improve your client’s insurance claim experience?
Of course, they can gamble that indeed the accident stays minor and doesn’t involve a customer who decides to sue for whatever they can get. Sometimes they’ll win – and sometimes they’ll lose.
The question is, how much can they afford to lose by not filing a claim right away? Share the information below with your commercial clients before they grapple with reporting a loss.
According to our statistics on commercial claims and losses, your clients may stand to lose quite a bit. A quick analysis by our claims managers, American Claims Management (ACM), shows that when a workers’ compensation claim was reported more than 10 days after the event, costs rose by 60 percent on indemnity claims. Medical claims rose by 64 percent.
Related: How faster workers’ compensation claim reporting can reduce costs
Here are the numbers on other types of claims handled by ACM, from auto and property to general liability:
Quick claim reporting can result in drastically lower claims costs
If the numbers aren’t enough to convince your commercial client, share these facts as to how delayed claims affect claims investigation and settlement:
- Claims reported late severely hinder the adjuster’s ability to conduct a meaningful investigation, determine the merits of the claim, and allow the adjuster to make a timely decision.
- A delay in contact with an injured employee or customer can result in litigation simply due to fear of the unknown or lack of understanding of the process.
- Timely reporting improves morale of injured employees: They can see their employer is concerned about their well-being. An employee who feels they are being taken care of by their employer is less likely to obtain legal representation.
- Delay in reporting can result in litigation. This can cause a delay of benefits, often increasing the overall payout by three to six times – resulting in higher unnecessary losses.
- The delay in taking statements from those involved and witnesses can impact the accuracy of the events, simply because people don’t remember details as to what happened.
- Early identification of a claim leads to the correct treatment plan being approved more quickly. This results in a faster recovery, a shortened duration for which an employee is off work and lower treatment costs.
- Any liability claim should be reported immediately. Your client’s best defense is to have an adjuster on the scene right away. The same holds true with a commercial auto accident, which typically has a claims cost of $40,000 – $50,000 (more than they’d want to pay out of pocket).
Related: How to combat rising commercial auto claims
How to start the claims process
Remind your clients how to file a claim: First, go to our website and choose the type of claim in the menu. There you’ll find the proper contacts based on your type of claim, from work comp and small commercial business, to towing, forestry and many more.
- Ensure that all accidents and injuries are reported immediately. Prompt investigation will uncover not only the cause of the mishap, but also help you determine what corrective actions need to be taken (see more on risk assessment and loss control programs).
- If the claim is auto or property damage, take photos and make a list of damaged items. Don’t throw anything away. If necessary, make temporary repairs to minimize additional damage.
- Start your claims file to keep track of the process and all moving parts. Keep a copy of all supporting documents before you turn them in. Schedule regular follow-ups with your adjuster so that you can monitor progress.
Related: Avoid these top 7 workers’ compensation claim mistakes
In a nutshell, if the mishap is fairly minor property or vehicle damage (to their vehicle only, with no injuries involved), they may be better off not filing a claim, because the cost may be below their deductible. However, in cases of liability or injury – whether to their own workers, a contractor or a customer – it’s best to file the claim right away to get our claims administrators working on their behalf.
This article originally appeared on Arrowhead’s Tribal blog. It has been modified and updated to better fit the needs of Arrowhead’s commercial producers and their customers.