Don't Let Contractor Insurance Claims Get Out Of Control, Which Can Waste Money

When it comes to getting renewal quotes, it is no secrete claims really cost contractors money. You will end up paying for a loss with increased premiums - sometimes more than the claim itself.
Tune in to your claims to make sure they don't get out of control. Nobody cares about your costs and claims as much as you do, so keep on the initiative for suppressing and preventing claims.

When a claim is filed, the claim adjuster books an estimate of the total claim. This is a guess as to what the total loss will be. It is often called a reserve. This estimate is seldom correct, and when it is overstated, your renewal quotes will also be overstated.

When a claim is paid and closed, it is over. You can have no influence over it's effect, other than to write up a good explanation of what happened, and what you did to make sure it never happens again. Include such letters in your bid specs, as they can help underwriters justify giving you a break.

When a claim is open (still not closed), pay attention to it's progress. Stay connected with your ongoing open claims. Find out what happened last, what is going to happen next, and who is responsible. Know how much your reserves are and why. Is the claim getting bogged down somewhere? Often, people aren't doing their jobs on a timely basis. Keep in touch with the claims adjuster, and keep asking what must happen for the claim to close. Keep asking what the claim is reserved at, and what can be done to lower the reserves. This king of attentiveness can save you a lot of money.

Get your loss runs to learn where you stand right now with your claims. Ask the insurance company for them, or your broker. If you have active claims, get your loss runs updated at least every 90 days. When you look at them, you are looking for the open claims, especially those with large reserves. Ask your broker to explain them to you. See if the reserves make sense to you. You and your broker can argue the reserves, and many times get them to go down.

Sometimes you will see a claim on the loss runs you do not recognize. The claim may belong to a different company. A clerical error loaded someone else's claim onto your loss runs. Catching that can really save you a lot of money.

Know and understand your claims and loss runs, and you will save a great deal of money on contractors insurance over the years. Demand regular updates on your claims reports, and study them when you get them. Ignoring an open claim can be very costly.


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Don Bury, President

Insurance Cost Reduction Services

Phone/Fax: 800-760-1867

email: donbury@icrs.biz



Don Bury is a nationally recognized expert on negotiating with commercial insurance brokers. Author of "Buyers Guide To Business Insurance" with over $20 million in cost reductions delivered so far.