Understanding Your Claims: What Do You Have To Lose?

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

Image of files with the title “Claims” and a “Under Investigation” in red letters appearing out of the folder.

Claims happen. They come in all shapes and sizes, from all types of parties, and can cost your company in many different ways. An important aspect of managing the costs of risk start with gaining a clear understanding of your claims. Our clients are always looking to improve their bottom line. This article focuses on just one piece of the pie chart; workers compensation claims. Understanding the nuances of these cases can create measurable plans in the future to reduce frequency and severity of claims and ultimately lower your costs.


Perhaps the most common problem solving method for identifying causes of problems or faults is referred to as a “Root Cause Analysis.” As someone who likely manages many facets of your business, developing systems that analyze failures of a process makes complete sense. Once a claim occurs, initiate an Accident Investigation that is meant to uncover all of the small details that ultimately led to the injury or incident. In many cases, a Best Practices approach involves this same process for “near miss” incidents. That is, perform the same process despite the fact than injury did not actually result from the incident. This allows your company to refine the approach, improve the analysis, and develop training modules addressing the failure(s).


When claims occur, proactive business owners build a list of specific questions that deliver uncensored facts. Those facts build a story and allow your team a clear view of what really happened. Some examples of questions that can be used by your team are listed below:

  • How long had this injured worker been employed with us before the claim occurred?

  • Was the employee following protocol when the injury occurred?

  • Did the claim occur at the beginning or end of the day?

  • How quickly did our team provide assistance and get him or her the care they needed?

  • How quickly was the claim reported to our insurance company?

  • Have we had incidents like this in the past?


While role playing actual incidents and scenarios is not factual, it helps your team walk down a path to understand “what if” scenarios and forces discussion on how to address issues.

Example: Employee ‘A’ was injured when he fell from a ladder and fractured his leg. He had been employed for only two months. The injury that occurred was caused by a lack of proper training as the ladder was not properly secured. This claim occurred in the early morning and the area surrounding the ladder was wet. The team reacted quickly and was able to transfer the injured worker to an emergency room in less than an hour. The claim was reported 3 days from the incident. There have been two other similar “near misses” with ladders that did not result in injury.

Understanding your claims is a vital step in preventing future incidents. An investigation of an incident or near miss can uncover the root cause, explain the circumstances surrounding the incident, and help to identify scenarios and prevention plans. To learn more about understanding your claims, register for the Accident Investigation and Analysis training in Rancho Mesa’s Risk Management Center.