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- Case Study: Timely Reporting of Workers Compensation Claims
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- VIDEO: Prompt Claims Reporting is Good for Your Business
Prompt claims reporting is key to recouping your losses quickly and efficiently. The timing of when you choose to pick up the phone to report an incident to your insurance carrier has a direct effect on the bottom line. Here are the top five reasons why:
- Investigation collection. Prompt reporting of a claim allows your insurance carrier to immediately begin investigating the claim. Investigations started timely are much more successful in collecting important evidence and obtaining information from key witnesses. This includes speaking with your employees to pin down their recollection of facts early and meeting with the injured parties to obtain their version of the accident before it is influenced by others. Another factor to consider is that plaintiff attorneys can be very well organized. If they are allowed to investigate the claim prior to an insurer’s knowledge, they will have the upper hand with early access to employees and witnesses, as well as to the scene. They can influence testimony in unfavorable ways. Preservation of the scene and key evidence is vital, especially for restaurants and taverns. These industries tend to have a higher turnover of employees. Often times, lawsuits are filed years after the initial incident occurs. By this time, it can be very difficult to locate certain employees if they no longer work for the business.
- Spoliation Exposure/Preservation of Evidence. Spoliation is the intentional or unintentional destruction of evidence relating to a claim or potential claim. This evidence could be physical evidence such as a broken chair or surveillance recordings that are recorded over. Late reported claims increase the likelihood of key evidence being destroyed. Preservation of evidence is vital. For example, if there is surveillance video available, it should be secured. Sometimes video showing no fall occurred at the time the injured party alleges can be just as beneficial as actual video of a fall. Video that shows a customer arriving to the business already limping, or video that shows a customer who continues their shopping and appears fine after a fall — these things go a long way to the injured party’s credibility.
- Subrogation. Early reporting of claims allows for the carrier to look at angles of subrogation. Subrogation is the right for an insurer to legally pursue a third party that may bear some negligence for the loss. If key evidence goes uncollected because your insurance carrier is unaware of a loss, it diminishes opportunities for potential recovery in these areas. Subrogation reduces the overall financial impact against the insurance carrier and the policyholder.
- Builds Rapport. Timely reporting of claims allows the adjuster to build rapport and demonstrate empathy to the injured party. Evidence has shown that the early relationship-building that takes place on promptly reported claims results in lower overall settlements. Early reporting shows goodwill toward your customers and demonstrates your concern for their well-being. Statistics show that in settlements for claims reported 12 months after the date of loss, the overall settlement value is 8% higher than those reported shortly thereafter. At 24 months late, this percentage increases to 10-20%.
- Coverage Issues. Many states have coverage defenses for carriers on late reported claims. Per the conditions of the policy, it is a requirement that if you knew or should have known of a potential claim, the claim must be reported to the insurance carrier or coverage issues could be raised.
Society has helped businesses overcome industry-specific challenges for decades and our experienced staff possesses the skills necessary to manage your losses quickly and thoroughly, saving you both time and money. Click here for more information about the importance of prompt claims reporting and Society’s claims service phone numbers.