What you need to know about insurance leakage.
Leakage is a common workers compensation issue that many coverage providers do not talk about. Leakage refers to extra money in a claim payment that makes the payment more than it should be. Essentially, leakage is the difference between what the insurance agency sent and what they should have sent. While receiving additional workers compensation insurance claim money doesn’t sound like an issue, leakage ultimately affects the employer filing the claim. This is because the severity of workers comp claims affects your premiums; the more your claim costs, the higher your premiums will be.
Typically, workers compensation insurance claim leakage occurs due to the following reasons:
- Poor claims handling
- Errors in judgment
- Poor claims processes
- Poor customer service
Because leakage does amount to considerable losses for the insurance company, it’s important that they take steps to identify and prevent instances of leakage. Employing the following strategies can help to identify, reduce, and prevent leakage issues.
- Establish a set of best practices when it comes to handling workers compensation claims.
- Educate and train claim adjusters on state statutes, customer service, and claims-handling practices.
- Educate and train support staff.
- Link salaries and pay raises to compliance with best claims handling processes.
- Establish a work-flow process.
- Incorporate automation and technology into the claims process.
Because leakage occurs on the insurance company’s side of things, it can be difficult for employers to recognize and address instances of leakage. Typically, the best thing that you can do is educate yourself and stay vigilant when you file a workers compensation claim. The more questions that you ask and the more follow up calls and emails that you make, the more carefully your insurer will handle your claim. When your insurer takes care to handle things correctly, there will be less chance for leakage.
This is what you should know about leakage. Do you have additional questions regarding your workers compensation insurance? If so, then contact the experts at PMC Insurance Group. We are ready to assist you with all your commercial coverage needs today.