You are a business owner in New York City during the events that transpired in the Marvel Cinematic Universe’s first Avengers movie.
In the turmoil that the city grappled with, your business lost its infrastructure thanks to the overwhelming Chitauri attack.
What do you do next? Who do you call? The Avengers sure are not giving your investments back, and neither is the city litigator. At this time, your best bet is to ring your insurance provider.
Your insurance policy should cover such’ Act of God’ events. While you cannot ask Loki to return your losses, the insurance company will certainly try to help. Once you ask for policy coverage, the insurance agent will ensure that the demand is recorded in your Loss Run.
Every insurance company will keep a record of every coverage demand made by every client for every policy. A compilation of all coverage demands you have made in the history of your policy is called your Loss Run. Any record bearing all these details described above is called a Loss Run Record.
Let us explore this concept in detail from the perspective of clients and insurance companies.
What is a Loss Run?
A history of your business insurance claims is called a Loss Run. This information acts as a directory into the business behavior of a client.
Insurance companies will often refer to a client’s Loss Run Report to determine the type of business they reign in.
Loss runs are instrumental to the underwriting process in the Insurance sector. The job of an underwriter is to form an image and profile of the business at hand. If the Loss Run shows a frequent run-in with the insurer, the underwriter can adjudge it as risky. It would result in the company paying higher premiums in its policy or sometimes not getting the policy.
On the contrary, a clean Loss Run suggests to an underwriter that the business is devoid of any suspicion, resulting in lower premiums for coverage for the business.
What all is included in a Loss Run Report?
A comprehensive Loss Run Report includes all the essentials of the insurance policy. The insurance company itself administers such reports. Therefore, the Report will bear a letterhead of the insurance company that officiated the policy.
Following this, the Report will include details of the policy itself. All queries regarding the policy – when it comes into force, policy ID number, etc. – will be answered in this part of the Report. It will also mention the dates of when the insurance claim was reported by the business and the date of the loss valuation report. The Loss Run Report will also have a thorough description of the incident that incited the claim.
Lastly, the Report will include financial details – the history of the amount paid to the business by the insurance company and the amount that the insurer has set aside for the future. Additionally, the Report will mention if each claim is open or closed.
You can ask your insurance company for your Loss Run Report at any given time. If you are planning to shift insurers, and are not comfortable asking your currency insurer for your Report, lose the feeling and ask for it. Loss Run Reports are a part of day-to-day work in an insurance company, and no one will judge you for asking for one.
It would be best to advise your insurance company a few details about the Loss Run Report you need – what all policies you need a report for, how many years of reporting do you need, and by when you need the Report.
These reports are a tool for insurance underwriters to gauge the performance of a business. They are the metaphorical equivalent of a credit report used to build your argument for a loan. Loss Run Reports will build your profile up to the underwriter and help you sanction the coverage for your policy. If you are looking for a new policy, an underwriter will evaluate your Loss Run Report and decide the niches of the policy you receive.
Any type of business, however big or small, can request a Loss Run Report. Also, insurance companies can generate these reports for any commercial business insurance policy.
Types of business insurance generating Loss Run reports
All kinds of commercial business insurance policies are valid for the generation of a Loss run Report.
Let us look at a few of the most common types of business insurance policies that fit this bill.
General Liability insurance covers common business risks like injury to a customer, customer property damage, or advertisement injury.
Whenever your business applies for a lease or a contract, a General Liability Insurance hypes you in the bid. Moreover, it protects the business during lawsuits.
Most small businesses need General Liability Insurance. Be it owning, renting, leasing an office space, manufacturing a product, or giving a service, all of this requires the business to hold a policy of the same.
Most clients will also have a condition or stipulation that the company must have a General Liability Insurance policy. You can generate a Loss Run Report for these kinds of policies.
Business Owner’s Policy
A Business Owner’s Policy (BOP) is a cumulative result of two insurance policies – one for the business’s commercial property and one for other general liability.
Typically, this kind of insurance policy costs less to the business.
Workers’ Compensation Insurance
A Workers’ Compensation Insurance, as the name suggests, is to be used to cover medical costs and lost wages of workers in work-related accidents or illnesses.
It is one insurance policy that has the potential to show how much the company cares for its employees. Also, this kind of policy is mandatory for businesses.
Reasons to get Loss Run report
There are two common reasons for asking for a Loss Run Report – if you are shopping for a new insurance policy and if an insurer is looking to assess the safety culture of your business.
When you pitch an insurance company to insure your business, they will need a complete survey of anywhere between three to five years of Loss Run History to decide whether they want to insure you. They will also determine the cost of insurance premiums using this data.
If an insurance underwriter notices that you have made coverage claims very frequently, they may want to investigate further into the workings of the business. In Act of God cases, a company might consider accepting the insurance claim without a second look.
However, suppose a Loss Run Report contains too many instances of workers’ comp insurance claims or too many cases of fires on the commercial property. In that case, the insurance company will raise its eyebrows.
In both the issues mentioned here, the onus lies on the business and cannot be ratified by the insurance company. If the same problem has caused many fires in a business, then it is due to negligence on the part of the business, and an insurance company can waive off the coverage claim.
Sometimes, businesses will themselves request Loss Run Reports to investigate their work culture. If, after several instances of fire-related claims, a company requests for a Loss Run Report and goes through with correcting the work issue, then an insurance underwriter is more inclined to give a better insurance policy in the future.
A detailed history of all your commercial business insurance claims forms a Loss Run Report.
The easiest way to get such a report is to ask your insurance provider for the same. You can assess the working of your business using such data.
Suppose you are applying to a new insurer. In that case, the data from a Loss Run Record from your previous insurer can assist the new insurance underwriter to determine the risk of insuring your business.
An excellent clean Loss Run Report can do wonders to your insurance policy – a spotless record equals better premiums.
Any business owner can call upon these records regarding all commercial business insurance policies. Insurance claims made against the goods and services that the business provides (General Liability) and against the property of commercial business (BOPs) are a routine part of Loss Run Reports. Most importantly, business owners are liable to their workers. Workers’ compensation insurance forms the most integral part of all Loss Run Reports.
We need to understand Loss Run Reports and all other regulations regarding insurance companies because they are designed to make running a business smoother. These regulations activated by Loss Run Report data turn business owners into a more stable and saner society. When business owners reduce their risks and rectify their mistakes, we as a society grow. Get your Loss Run Reports clarified from your insurers, and run a safe, happy business.