Claims History

Overview

Claims history is the comprehensive record of all insurance claims associated with a business, including workers' compensation injuries, general liability incidents, auto accidents, and property losses. This history is the single most influential factor in how insurance carriers price, underwrite, and renew commercial insurance policies. A clean claims history leads to lower premiums and favorable terms, while a troubled history can result in higher costs, coverage restrictions, or difficulty finding coverage at all.

How It Works

Claims history is documented through several sources:

• Loss run reports: The official claims record from the insurance carrier, detailing each claim's date, type, status, and financial impact
• CLUE reports: The Comprehensive Loss Underwriting Exchange database, maintained by LexisNexis, which tracks claims across carriers
• NCCI experience data: For workers' compensation, NCCI maintains claim records used to calculate the experience modification rate
• A-PLUS reports: Another industry database tracking personal and commercial claims

The claims history evaluation considers several dimensions:

• Frequency: How many claims occurred during the evaluation period — high frequency is viewed more negatively than a single large claim
• Severity: The total dollar amount of each claim, including both paid amounts and reserves
• Type: The nature of the claims (slip-and-fall, vehicle accident, workplace injury) reveals the specific risks the business faces
• Trend: Whether claims are increasing, decreasing, or stable over time
• Open claims: Outstanding claims with significant reserves indicate ongoing financial exposure

Insurance carriers typically review the most recent three to five years of claims history when underwriting or renewing a policy. The most recent years carry the heaviest weight.

Compliance Relevance

Claims history is a valuable tool in COI compliance and vendor risk management:

• Vendor prequalification: Requesting claims history during onboarding helps identify vendors with safety or liability concerns before they begin work
• Predictive risk indicator: Past claims are the best predictor of future claims — a vendor with repeated slip-and-fall claims is likely to continue having them
• Insurance program stability: Vendors with poor claims history face non-renewal, which creates compliance disruptions when they must find new coverage
• Contract requirement: Many contracts require vendors to disclose claims history above a specified threshold as a condition of engagement
• Ongoing monitoring: Tracking claims activity during the contract period helps identify emerging risks before they become compliance issues

Compliance platforms should support claims history tracking as part of the vendor risk profile, with alerts for vendors whose claims activity exceeds defined thresholds.