How to Establish and Sustain a Proactive Claims Management Process

WEB EXCLUSIVE

By Greg Larson

In the metalworking industry, claims can be complex—and costly. You don’t want to wait until after a loss occurs to realize there are gaps in your claims management and investigation program.

As I’ve helped handle claims for Sentry Insurance, I’ve seen businesses achieve significant, tangible value by taking a proactive approach when investigating and processing claims. And unfortunately, I’ve also seen the results of insufficient, reactive claims management. The following hypothetical example illustrates these risks.

Let’s say one of your employees was performing an inventory check when they tripped over loose packaging, twisting their ankle and landing on their hip. The employee reported the incident to their manager, but said they felt alright at the moment. A month later, the manager learned the employee had seen a physician after experiencing consistent pain and was diagnosed with pelvic and ankle fractures. Following two months of treatment, the employee was issued sedentary restrictions, which your company refused to accommodate. The employee retained an attorney, and the case was settled with a high permanent-partial disability rating. The employee never returned to work, and your company’s total expenses for the case exceeded $300,000.

KEY TAKEAWAYS
While this example is hypothetical, it highlights how gaps in your company’s claims management process could contribute to a costly outcome. Documentation and detailed reporting are crucial to claims resolution. Without a formal reporting and investigation program in place, your management team may rely on one-off conversations and hearsay, and your claims representative won’t have the information they need to do their job effectively. Plus, your employees may not even be aware of how to report a claim in the first place.

Any delay in reporting an incident can impact claims processing and extend the employee’s recovery timeline. In the example I outlined above, the delay compounded the systemic communication issues, leading to a costlier, more drawn-out case than it needed to be.

FORMALIZE YOUR PROCESS
To help you respond appropriately to workplace claims, implement the following policies and strategies into your written claims management program:

• Establish an accident investigation program and communicate requirements to your employees. Be sure each employee knows how to access—and complete—your comprehensive claim reporting forms, and reinforce the importance of immediately reporting all workplace injuries to their managers. You could share this information via annual training, distributing it in your employee handbook, or by putting up strategically placed posters throughout your facility.
• Counsel injured employees regarding in-network healthcare providers. These providers often provide services at reduced rates, which can mean lower treatment costs for your employees. In-network providers can also provide timely access to medical care and may have a stronger understanding of a local employer’s return-to-work program.
• Maintain communication with key individuals. First and foremost, make sure your injured employee knows you’re there for them. You both want the claim to be resolved smoothly and fairly, and for the employee to return to work as soon as it’s safe. Additionally, keep in contact with the employee’s manager, their healthcare provider, and your insurer to ensure everyone has the information they need.
• Develop and enforce a written modified-duty program for injured employees returning to work. To help keep this topic top-of-mind for managers throughout your facilities, make it an annual performance goal for each management level.

Finally, while not specifically part of your claims management process, the most proactive step you can take is investing in loss prevention programs. As you know, preventing losses altogether is ideal—for your employees, your bottom line, and your reputation. These programs require total buy-in to achieve success and often involve capital investments and long-term planning.

Remember, establishing a plan alone isn’t enough. Your claims management program requires companywide buy-in and understanding of its execution to be effective. Meet with your insurance provider or legal team as well—they can help you identify risks and scenarios you may have overlooked.