Loss runs

Insurance loss runs refer to your business insurance claims history. They are packaged in a report you can provide to prospective insurance providers when shopping for new commercial insurance coverage.

Much like credit scores allow banks to determine whether you’re a good candidate for a bank loan or credit card, loss runs allow potential insurers to assess how risky your business will be to insure. By requesting your loss runs, an insurer can review:

• The type of claims you’ve filed in the past
• The financial impact of your claims (settlement costs)
• The frequency of your past claims

Assessing this data is an important component of the insurance underwriting process. Insurers need to determine whether you’ll be a satisfactory risk (and profitable customer) or a high risk (and unprofitable). Depending on their conclusion, they may charge you a higher premium or decline to issue a policy for your business.

When an admitted insurance provider is unable to provide protection, businesses with high risk or an adverse loss history can turn to excess and surplus (E&S) lines insurance companies for coverage. 

Insurance companies provide loss runs for most forms of business insurance, including:

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

If you have a lot of employees working in risky jobs, you might need loss runs to assess your company’s safety culture. However, more commonly, you would need a loss run report to shop for a new insurance policy or carrier.

When you ask an insurer for an insurance quote, it will usually request anywhere from three to five years of claims history in order to decide whether to insure you and at what cost (premium).

If your loss run report reveal that your business hardly ever experiences or causes property damage or bodily injury, you may qualify for lower premiums. This is similar to careful drivers getting safe-driver discounts from their auto insurers.

Explore more options for finding affordable insurance.

A loss run report provides a full picture of how you used your business insurance during the current and prior policy terms. Information provided includes:

• The insured’s name (either your name or that of your business)
• Your policy number
• The dates of any claims you reported to your insurer
• The dates you notified the insurer of each loss (or incident)
• A description of the reason for the claim
• How much the insurer paid to settle (or close) the claim
• If the claim is still unresolved (or open), how much the insurer has set aside in reserve funds

Just contact your account manager or insurance company and tell them you need a loss run report. Specify how many years of claims history you need and when you need the information by.

Depending on the insurer, you may be able to receive your report in a day, in several days, or within a week. Taking longer than that may violate your state’s insurance regulations, which typically require fulfilling a loss runs request in 10 days or less.

Insureon helps small business owners get online business insurance quotes with one easy application. Start an application today to keep tomorrow’s claims at bay.