“To err is human,” Alexander Pope said. And while the 18th-century poet couldn’t use modern technology to prove his point, he knew that humans were bound to make mistakes. This fact is also what makes insurance claims a fact of life if you’ve been around long enough. Of course, everyone will have to make a claim at some point in their lives, but what can be learned from previous claims that can be beneficial for the future?
A business can learn a lot from its previous insurance claims. Studying previous claims can help companies stop mistakes from repeating and make procedures more efficient. Most importantly, learning from previous claims can help keep premiums down. This reduces costs by preventing additional claims from being necessary.
And when it comes to insurance, things such as repeated claims or high limits can make a policy more costly. This is also when it is important to remember to pay only for the coverage you need. There will be a lot of options that may not be well-suited for your business’s unique needs. A tailored policy will consider specific factors such as your industry and claims history to achieve a reasonable cost.
Stop Mistakes from Repeating
No business should be stuck in a Groundhog Day-type scenario when filing insurance claims. Bill Murray may be sublime, but that would be way too much Ned Ryerson. Identifying being stuck in a mistake cycle is one of the biggest takeaways that scrutiny of past insurance claims can provide. Doing so should show what exact mistakes were being made and how the business can prevent them in the future. Stopping errors before they happen will be of benefit to any business. Errors can be costly in relationships with clients, quality of products, and overall reputation.
This is why part of any insurance claim should be a thorough internal investigation of the circumstances. Investigating will help identify probable problem sources and make coming up with solutions much more manageable. Stopping repeat mistakes is something even large corporations have to deal with. (A recent study from the University of Texas finds that entities as disparate as NASA and BP frequently make the same errors repeatedly. So no one is perfect.) Still, being able to stem repeat mistakes is essential as repeating them can have a severe drain on efficiency, as we will see next.
Make Procedures More Efficient
One added benefit of filing an insurance claim is that it can help expose inefficiencies in your company’s procedures. Take the example of a dairy farmer. If most claims are linked to spoilage, better product handling is necessary. The claims can help find the area where the spoilage is occurring and put in measures to prevent it from happening in the future.
Even outside of areas that are directly related to it, a claim may still be able to shed light on areas of inefficiency. For example, communication may be a problem companywide, not just in the area that keeps making claims. Improving communication and making things clear between workers and management may help increase overall efficiency while also reducing claims. Some other useful ideas can be found in this explainer on minimizing errors in the workplace.
Keep Premiums Down
If there is one benefit of learning from previous insurance claims, it is probably this: learning from your past claims will keep your premiums down. This is because premiums are sure to rise after a claim is made. Repeated claims will only magnify the effect. So if keeping premiums down is a priority, learning from past mistakes is the best place to start.
Your insurance company may be an excellent place to start. A good insurance agent will be familiar with the most common types of claims and will be invested in helping prevent similar issues from happening again in the future. In addition, the insurer likely will be able to provide information that can help prevent common problems from reoccurring with helpful specifics to your area’s regulatory environment.
Learn from Previous Claims to Keep Your Business Protected
At the end of the day, some claims will be unavoidable. And when claims are filed, insurance premiums go up. And this is why it is so crucial that a business owner takes the time to learn from their claims history. After all, so many of the cost factors when it comes to insurance are out of an owner’s control. Aspects such as the industry that they are in, and the business’s location, aren’t likely to change.
So, the only real area that savings can hope to be gained is either in less comprehensive coverage or in preventing repeat claims from having to be filed in the first place. When it comes to doing your best to protect your business, the choice becomes quite clear. In short, learn from your past claims to stop cyclical errors from occurring and help ensure the continued health and well-being of your business.