Trucking Industry Catastrophe WC and Liability Claims
All trucking industry claims professionals have experienced catastrophe situations in their career. When a catastrophe Workers Compensation or Liability claim occurs, does your adjuster appear at your door as a “deer in the headlights”, or an enlightened individual with a plan.
Our recent review of trucking industry loss information from insurance companies, third party administrators and self-insured clients, has revealed that legacy claims (those claims that are open for longer than one year, or are greater than $25,000 in reserves) are becoming a larger part of the claim portfolio.
Historically, the trucking industry has significant catastrophe risks for Workers Compensation and Liability exposures. According to Federal Motor Carrier Safety Administration reports, more than 4,300 people were killed in accidents involving semis and other large trucks in 2016, a 28 percent increase over 2009. Additionally, over 145,000 people were injured in accidents involving trucks.
Truck related claims are some of the most catastrophic in the industry, and require special handling from the date of the occurrence. Accelerated Settlement Solution practices allow clients to gain a wealth of technology, data and experience to alleviate headaches and help to manage the claim in a methodical and cost-effective manner. The practices often reduce the average expected cost of the case by 10-20%, and often 30-40% in larger cases.
We find at times that long diaries are being placed on cases with only minimal support for the reserves. Normally, an attorney and their staff are the primary resources managing a claim, and they are not prepared to address the immediate challenges of establishing a value and setting reserves for insurance purposes.
As senior enterprise risk and claim managers know, this could be an extremely dangerous and expensive manner to manage a claim due to uncontrollable damages and costs. Additionally, the information associated with this type of management is limited to the legal process and not the strategic settlement costs.
There are many reasons for these conditions in a risk and claim management operation.
- The severity and complexity of legacy and chronic claims have worsened over the last few years.
- Many managers believe that claim adjusters don’t have adequate resources to deal with everything related to a catastrophic claim, and their case loads are growing to levels that make effective claims handling a difficult exercise.
- Once the immediate emergency has been resolved, insurers may not communicate critical information from the investigation to assist in managing the claims and ongoing operational risk.
- There may not be a reasonable basis for establishing a reserve without detailed medical data from the investigation or litigation process.
To learn more about how to create a unique and integrated approach to your trucking industry claims, please download our white paper >>