Claims Procedures
Issue #34
November 26, 2007
Insurance policies contain provisions that place certain responsibilities on the insured for the reporting of claims. Failure to report claims in a timely manner and follow the appropriate procedures can result in denial of coverage by the insurer. Additionally, there are certain steps a business can take to mitigate the financial impact of accidental losses. Therefore, it is a good practice to develop a set of procedures and train for their use in preventing potential claim problems.
The following are excerpts from claim procedures we have prepared for clients. While not the complete version, they are offered as examples of the types of issues associated with property, liability, automobile, and workers’ compensation claims.
Property
Upon the discovery of the loss, steps must be taken to safeguard life and equipment. Report the loss as soon as possible. Identify all costs, including labor, materials, contracted labor, debris removal expenses, etc., fully with substantiating invoices.
It is usually necessary for the insurance company to examine the damage. They may also wish to assist in the handling of any salvage. Therefore, do not dispose of damaged equipment or begin repairs without the expressed consent of the insurance company.
Liability
Failure to report and properly handle claims made by others, even if invalid, can result in a denial of coverage by the insurer. All claims or potential claims (including incidents that may even remotely result in claims) should be reported to the insurance company. Include minor injuries to other party, e.g. cut fingers, bruises, slip-and-fall, or minor property damage in your report.
NEVER ADMIT LIABILITY, as such admissions can jeopardize your insurance coverage. Merely inform inquiring persons that you will send the report to our Insurance Company for handling.
DO NOT VOLUNTEER MEDICAL AID --- You may call an ambulance or doctor, but do not agree to pay for any treatment or service performed.
Get the names and addresses of any possible witnesses, even if they may be unfavorable.
NEVER pay Company funds to other parties to settle a claim.
IMPORTANT: Only officers of the Company or others specifically authorized may accept lawsuits served on the Company. Enter the date, time, and name of the person receiving the lawsuits in the upper right-hand corner of the service document.
Automobile
All accidents involving vehicles driven on Company business must be reported to CLAIMS ADMINISTRATOR.
Make these reports even when injuries are minor and vehicles still operate.
CLAIMS ADMINISTRATOR is responsible for reporting claims to our insurance company. For your convenience, there is an accident reporting form in the glove compartment of each car. Complete this form at the accident scene while all facts are available.
If there is physical damage to your Company car, refer to Physical Damage Section for details. Additionally, all drivers must send a narrative report containing all details surrounding the accident to their immediate supervisor. A copy of the narrative must be sent to our CLAIMS ADMINISTRATOR.
Serious Injury
If there is any bodily injury requiring immediate hospitalization, call CLAIMS ADMINISTRATOR, as soon as possible after the accident.
If anyone contacts you about the accident, refer them to CLAIMS ADMINISTRATOR.
DO NOT VOLUNTEER MEDICAL AID --- You may call an ambulance or doctor, but do not agree to pay for any treatment or service rendered.
Workers’ Compensation
For Life-Threatening Medical Emergencies: Call 911 to arrange transportation to the nearest medical facility and notify CLAIMS ADMINISTRATOR immediately. CLAIMS ADMINISTRATOR will notify the injured worker’s relatives and/or emergency contact.
For all other injuries or illnesses, the supervisor or other company representative will take the injured worker to our assigned medical clinic for treatment. Unless they have pre-designated a “personal physician”, the employee should be directed to go to a doctor in our Medical Provider Network (See Exhibits section).
Provide the worker (or his/her dependents or agent) with the Employee Claim Form (form DWC-1) and the Medical Provider Network information form from our insurance company within one working day of notice of injury. Deliver them personally or by first-class mail. Instruct the worker to complete the employee section of the claim form and return it to you as soon as possible.
Upon return of the claim form, provide the injured worker with the “Employee’s Temporary Receipt” copy. Within one working day of receipt of claim form, complete the employer section, date the form and provide a copy to the employee and INSURANCE COMPANY.
As soon as possible after the accident, telephone INSURANCE COMPANY at telephone number INSPHONE to report the injury, followed NO LATER THAN 5 DAYS by submitting the "Employer's First Report Industrial Injury” (form 5020). (Note: Form 5020 must be filed even if the worker has not returned the claim form.)
Contact the employee a few days after the injury to answer questions and determine any special needs or problems. Maintain contact with the injured worker, the doctor and the claims administrator regarding the status of the claim until the claim is either closed or settled.
If the injured worker requests a change of treating physician, provide an alternative physician within five days of their request.
Notify the Corporate Finance Department, your Payroll Department and INSURANCE COMPANY of all lost time as soon as it begins and again immediately upon the employee's return to work.
Implementing Your Procedures
Once your procedures are written, they should be used as a training reference for managers and supervisors. You may also want to include training in other areas at the same time. For example, there is a connection between workers’ compensation injuries and FMLA, ADA, and EEO issues. Whether you combine these into a single session, or do them separately, be sure to allow sufficient time for training. After all, if we do not train them, how are supervisors and managers supposed to know?