Claims management can mean a multitude of things depending on what industry you are in. However, at its root, it refers to the proactive handling of any event that could trigger insurance coverage, such as property damage, bodily injury, auto accidents or an employee injury. This encompasses everything from pre-hire risk management practices and prompt reporting and documentation of incidents or potential claims to communicating regularly with your insurance broker or insurer and collaborating internally with safety managers, human resources and C-suite executives.
The goal is not just to respond to a claim, but to prevent it from happening in the first place. If that is not possible, then the goal is to manage it efficiently in an effort to mitigate disruption and reduce long-term impacts.
Best Practices for Claims Management
Proactivity is key to claims management. To help mitigate the risk of potential injuries and resulting claims exposure, companies can start with the hiring process. For example, it is often best practice to conduct background checks, including motor vehicle records to ensure that new hires are safe drivers representing the company on the road. Depending on the responsibilities of the role, organizations may also consider a post-offer, pre-employment physical to make sure the new employee is capable of doing the physical job they have just been hired for.
When a claim arises, the way it is managed can make a major difference. Claims management is more than just filing paperwork; it is a structured process consisting of investigation, documentation, notification and communication that protects your company’s interests and elicits fair resolution. Organizations need to ensure that the following key steps are taken when a claim occurs:
- Investigation: A well-timed and thorough investigation is paramount to a claim’s success. Investigations should be initiated as soon as possible and be completed within 24 hours of a known incident, so organizations need to develop a clear claims protocol and accident investigation standard operating procedure that identifies who is going to report a claim, who is responsible for the investigation, and who is monitoring the claim and communicating internally. As part of the investigation, investigators need to collect witness statements, photos and videos and provide any applicable contracts and certificates of insurance (COIs).
- Documentation: Document all correspondence with involved parties. If it is not in writing, it never happened. Maintain organized records and use a claim log to track dates, adjuster contacts and status updates. If this is an employee injury, be sure to keep the claim file separate from their personnel file.
- Notification: Inform your insurance carrier and broker within one day of the incident using applicable forms and SOPs. Be clear on expected carrier reporting timeframe or internal deadlines. Be sure to avoid assigning blame for the incident too quickly. Let the investigation and carrier adjuster determine liability before making any statements.
- Communication: Assign a dedicated internal point of contact for ongoing communication about the claim. Centralizing this function helps ensure consistency of messaging and reduces confusion. Stay engaged with your broker or your insurer to obtain regular updates. Strategize early on with all parties involved to discuss realistic timelines and anticipated outcomes.
Common Claim Types and Expected Outcomes
A general liability claim typically involves third-party property damage or bodily injury, such as a visitor who slips on a jobsite. Once the claim is submitted to the carrier, expect an adjuster to be assigned to assess liability and either assign defense or work toward a settlement. Resolution timelines vary depending on the claim’s complexity and whether litigation is involved.
Workers compensation claims involve employee injuries or illnesses. The process focuses on ensuring medical care and determining lost time benefits. It is imperative to ensure effective communication among HR, supervisors and your broker or insurer. The best outcomes occur when you maintain a return-to-work program and follow up regularly on your employee’s recovery.
Auto accidents can either be first-party losses to a company vehicle or an at-fault third-party loss involving other vehicles. Much like the general liability process, once an adjuster is assigned, they will aid in the investigation and determine liability. Most property damage or collision payments are made quickly, but if another party is claiming bodily injury, the resolution can take much longer, especially if a party becomes represented by an attorney.
Strong claims management protects your company from escalating costs and potential operational interruptions. By combining proactive pre-incident measures, timely investigations and thorough documentation, you can not only manage claims efficiently, but also learn from them to strengthen safety and risk management practices.