order to begin the claims process on the
right foot and help it progress in the right
direction. It is also imperative that the adjuster complete certain steps before the
next step can be performed both properly
and in a timely fashion.
Some of the metrics that a claims administrator should follow in the initial
stages of a workers’ compensation indemnity (lost time) claim are presented
in Figure 1 here to the right.
For liability claims, best practices
may be the same for items 1 through 5,
with the exception that the number of
contacts may differ, depending on how
many policyholders and claimants are
involved in the claim.
For property claims, items 1 through
5 again apply, although contact might
be limited to the insured. There will,
however, be other best practices specific to (and therefore applicable) to
those lines of business. This may include, for example, conducting the site
inspection within 2 days of contact for
long-tail claims, such as workers’ com-
pensation indemnity (lost time) or li-
to practices that caused issues far worse
than the original problem. For example,
mpanies that were appropriately
d about significant reserve de-
t or reserve stair-stepping in-
programs in which adjusters
uired to report to the client or
ger, should reserves reached a
reshold. In such cases, manage-
have reprimanded the adjuster
allowing the claim to reach that
, or for not setting the reserve
in the first place.
nitive approach led to the be-
n which the adjusters initially
sonably high reserves so they
t be forced to increase reserves
time and be reprimanded for
rence. Or, perhaps they did not
reserves until the last minute,
when a settlement was payable,
hey would only have to be rep-
once rather than several times.
ult of these improperly admin-
utcome-based metrics led to
ditional problems, including:
ves were inadequate, then there
have been an understatement of
es, which were identified at a lat-
t when other financial problems
1 Intake, Set-Up, and
Claims administrator should receive, set-up, and assign the claim
to the appropriate adjuster on the same day received, if received
before 3 p.m., and no later than 10 a.m. the following day for
claims received after 3 p.m.
2 Coverage Review/
Review, analyze, and confirm coverage immediately, prior to
making initial contact with the insured, claimants, and others
(e.g., medical provider) when possible.
3 Contact Contact the insured, employee, and medical provider within 1
working day of claims receipt. This emphasizes the need for
prompt set-up and assignment.
4 Investigation Begin the investigation at the time of first contact, which may
include a recorded statement, requesting police reports, report to
index bureaus, viewing the incident site, and other tasks.
5 Reserving Set initial case reserves within 1 to 2 working days after claims
receipt. Admittedly, reserves are imprecise at this point. Note
that prompt contact and a prompt and thorough investigation help
the adjuster prepare a more informed reserve estimate. Review
reserves every 30 days thereafter (or possibly longer, depending
upon the stage of the claim).
Make a decision to accept or to deny the claim as soon as
practicable, and no later than 14 days after the date the
employee’s disability began.
7 Indemnity Payments Pay indemnity benefits within 14 days of the date the employee’s
disability began, which is sometimes a statutory requirement, not
just an industry “best practice.”