Loss runs

The carrier's own record, not the sub's

A loss run is a report the insurer produces listing every claim made against a policy over a stated period. It is written by the carrier from its own claim system, which is the whole reason it is worth having: a certificate of insurance is the agent's summary of what was bought, and a loss run is the insurer's record of what it has since paid out.

A typical run gives you, per claim: the date of loss, a claim number, a short description, whether the claim is open or closed, the amount paid so far, and the amount still reserved against it. Some add the claimant, the adjuster, and a cause-of-loss code. None of that is standardized, which is its own problem — see below.

Paid, reserved, incurred — and which one moves

Three numbers, and the difference between them is the single most misread part of the document.

• Paid is money already out the door. It does not move down.
• Reserved is the carrier's own estimate of what is still owed on a claim that has not closed. It is a judgment, made by an adjuster, revised as facts arrive.
• Incurred is paid plus reserved — the carrier's current total view of what the claim will cost. This is the number that matters, and the number that moves.

So a run showing one open claim at $8,000 incurred is telling you what the adjuster thinks today. If that claim is a back injury with the employee not yet back at work, the reserve can be re-set at $80,000 in a quarter and nothing about the certificate you hold will change. Read an open claim as a range, and a closed one as a fact.

Every run is a snapshot with a date on it

Somewhere on the report there is a valuation date — the "as of" date the figures were pulled. It is easy to miss and it governs everything above. Reserves move, claims close, and new claims are reported late, so the same three policy years pulled in January and in June will not agree.

Two practical consequences. Ask for a run valued within the last 60 to 90 days, because an old one understates open claims almost by definition. And when you compare two subcontractors, check you are comparing runs valued at roughly the same point — otherwise you are reading the calendar as much as the risk.

There is no ACORD 25 for this

The certificate has one national form, which is why it can be skimmed. Loss runs have none. Every carrier prints its own layout, its own column order and its own vocabulary — one will label a column Incurred, another Total Incurred, another will give you paid and reserved and expect you to add them. Some fold allocated expense into the incurred figure and some do not, which can move the total materially on a litigated claim.

So read the headers each time rather than the position you expect. And if a column is ambiguous, the agent who pulled the report can say what it contains in one line — that is a faster answer than inferring it.

What to ask for

• Three to five policy years, named by date rather than by "the last few" — policy years rarely line up with calendar years, and the gap is where a claim goes missing.
• One run per line of coverage. General liability and workers' compensation are separate policies, often with separate carriers, and they produce separate reports. A sub who sends one has answered half the question.
• A valuation date inside the last 60 to 90 days.
• From the agent, not the subcontractor. The producer named on the certificate pulls these routinely — it is the same report used to shop an account at renewal — so it is a normal request rather than an imposition, and it removes the middle step where a sub forwards a report they have not read.

The questions a certificate cannot answer

This is the point of collecting one at all. A certificate is a statement about capacity; a loss run is a statement about use.

• Is the aggregate still there? A shared general aggregate can be substantially consumed by claims on other jobs, and the certificate will show the original figure either way — which is the question per-project aggregate raises and this document answers.
• Is a high experience modifier old news or a live problem? The experience modification rate is computed from exactly this data, on a deliberate lag. The loss run shows you what has happened since.
• Does "no claims" mean a careful operator or a new entity? A clean three-year run on a company incorporated last year is telling you about the paperwork, not the crew.

Hi [Agent name],

We are prequalifying [Sub name] for work on [Project]. Could you send current loss runs for:

- General liability — policy years [YYYY-YYYY], [YYYY-YYYY] and [YYYY-YYYY]
- Workers' compensation — the same three policy years

A valuation date within the last 90 days is ideal. If there are no claims in a period, a no-loss letter naming the policy number and the period is fine.

Thanks,
[Your name], [Your company]