Lag Time and the Cost of Claims
What is lag time? It’s the period of time between the date an injury occurs and when the claim is reported to the insurance carrier. Why is this an important concept? Because reporting a claim as quickly as possible is the first step in controlling costs, as well as getting injured workers healthy and back on the job quickly.
Injury details are usually clearest during the first 24 hours following an injury, which is why it’s the perfect time to initiate the claim process. Doing so helps ensure the claim runs smoothly and reduces the likelihood of unnecessary costs. Prompt reporting of claims also means prompt investigations can take place, which can explore what caused the accident. Indentifying and controlling these exposures to prevent recurrence is a critical step in accident prevention.
Generally accepted standards recognize 24 hours as an appropriate time frame for reporting claims. While it can be challenging to report a claim within one day, it’s extremely important to do so within three business days. If an employee is off work for longer than three days, an employer runs the risk of seeing significantly higher costs.
Some of the ways you can improve lag time include the following:
Designate a management-level person to receive the following information and be responsible for reporting all claims:
-Who was injured?
-How did it happen?
-When and where did the injury occur?
-Were there witnesses? Who?
-Was the injury reported to the insurance carrier? By whom and when?
-What is the status of the accident investigation report (i.e., when will it be complete)?
Train supervisors on accident reporting and investigation procedures.
Include the importance of injury reporting as part of new employee orientation.
Track lag time by department and discuss with department heads regularly.
Set lag time goals for leadership and include as a metric in annual performance reviews.
Review these key points with your team and see if they can be implemented into your safety program. Over the coming months, track how your business is doing when it comes to timely reporting of claims. If you discover a lag time problem, take measures to improve your rate of late reporting and you’ll see vast savings in claim expenses.