Each year Bill Dougherty teaches business owners how to Avoid the 10 Critical Business Insurance Mistakes.  He motivates them to “take charge of their insurance program” to Reduce Costs and Maximize Value.

Not Having a Claims Management Plan

This is the fourth installment in our series “How to Avoid the 10 Critical Business Insurance Mistakes”.

If you missed any of the first three installments:

Chapter 1: Partnering with the “Right” Agency

Chapter 2: Paying Attention to Your Carrier’s Financial Performance

Chapter 3: Reviewing Coverage with Your Agent Regularly

Be sure to call or e-mail me and I’ll send you a copy.

Today we will highlight a mistake that you must avoid if you want to control the cost of your insurance program…  “Not Having a Claims Management Plan”.  I guarantee that a proactive claims management plan will control your insurance costs!  The process is not complicated or time consuming but the benefits are extraordinary. An effective plan starts with your agent (here we are again; if you don’t have a “10 Percenter” as discussed in Chapter 1, this process will not work).

There are four (4) key components that must be included in an effective Claims Management Plan. Starting with the assumption that your agent has a dedicated claims representative assigned to your account, there are four basic components of the process:

Advocate:

The role of your dedicated claims representative is to be an intermediary between     you and the insurance carrier coordinating all claims activity. Always report any claim to your agency claim advocate to get the best outcome.

Monitor:

One of the primary roles of your agency claim advocate is the proactive management of open case reserves. Insurance carriers have no motivation to set low reserves or take down pending reserves on a timely basis.  You need an advocate managing your claims activity every day!

Review:

When is the last time you had a claim review? Your agent should be coordinating annual, semi-annual or quarterly reviews in your office that include you, your safety manager, the carrier and your agency claim advocate.  During these meetings the status of all claims should be reviewed and possible adverse trends identified.

Correct:

The final component of the claim review process is the coordination of the carrier’s and agency’s safety resources to address trends improve safety and reduce claims.

The bottom line is that a proactive Claims Management Plan is a proven method to reduce claims and control insurance costs.  Be sure to demand this value added service from your agent!

Obviously there’s a lot more to discuss.  This is simply an executive summary of Chapter 4 of a two hour seminar.  If you would like to discuss in more detail just give me a call.

Next month we’ll cover Mistake #5 Splitting Coverage between Agents and Mistake #6 No Risk Control/Loss Prevention Plan.

Smooth Sailing,

Bill Dougherty, EVP
True & Associates
908-379-2313
wdougherty@trueassoc.com