Pennsylvania Lumbermens Mutual (PLM) is dedicated to supporting business owners in managing their risk and providing valuable resources. Our monthly large loss meetings involve different departments including Underwriting, Loss Control, Business Development, and Claims to analyze and evaluate losses from various angles, demonstrating PLM’s active commitment to continuous improvement and risk mitigation.
Our multidisciplinary team meticulously analyzes and evaluates these losses from every angle. We examine whether the coverage in place was adequate, scrutinize the implementation of safety measures and processes, and brainstorm what could have been done to prevent such losses. Sharing The Claims Files: Mitigating Large Losses report is to educate and raise awareness about effective risk management practices. This kind of transparency and collaboration benefits both insureds and the industry.
Auto Claims
The Cost of Distracted Driving
Distracted Driving
Beyond driving under the influence, distracted driving is the leading cause of car accidents (94% to be exact). Distracted driving costs the insurance industry $129B/year.
By definition, distracted driving is the act of operating a motor vehicle while engaging in activities that divert a driver’s attention away from the primary task of driving. These distractions can be visual (taking your eyes off the road), manual (taking your hands off the steering wheel), or cognitive (taking your mind off driving). Common examples of distractions while driving include texting or using a smartphone, eating or drinking, adjusting the radio, talking to passengers, and more.
When we review our large loss files, many of the casualty losses are in relation to distracted driving—some starting at the low six figure range all the way up to 7-figure. We typically see people on the phone and eating, compounded with speeding, and not fully paying attention to the environment around them. While this is truly alarming, we must ask ourselves what we can do to help improve these results.
Behavioral Analytics
Distracted driving is indeed a major issue contributing to car accidents. Implementing measures to address this problem is essential. With that, PLM is pleased to offer our customers telematics monitoring through Azuga and GPS Insight, industry leaders in driver risk management.
Behavioral analytics can play a crucial role in addressing the issue of distracted driving and improving overall road safety. By leveraging technology to monitor and analyze driving behavior in real-time, it’s possible to identify instances of distraction and other unsafe driving habits. This data can be used to provide immediate feedback to drivers, helping them become more aware of their actions and their potential consequences.
Additionally, behavioral analytics can be a powerful tool for both training and incentivizing safer driving practices. It not only benefits individual drivers but also has broader societal and insurance implications. Safer driving reduces the likelihood of accidents, which, in turn, leads to lower insurance claims and premiums. It’s a win-win situation that promotes safer roads and saves costs for both individuals and insurance providers.
By actively using behavioral analytics, we can proactively address distracted driving and work towards a safer and more responsible driving culture. This approach aligns with the broader trend of leveraging data and technology to improve road safety and reduce accidents.
Potential Insurance Policy Consequences
If you as the insured keep receiving distracted driving-related losses, you may face consequences like:
- Increased Rates.
- Changes in Terms and Conditions.
- Losing Your Insurance Policy.
- Being Placed in the Excess and Surplus Market with Reduced Coverage.
Improvement Strategies
To reduce auto losses, consider installing cameras inside and outside vehicles for monitoring and implementing regular driver training. This can help improve the overall driving experience and potentially prevent losses altogether if you have a loss free auto policy.
Addressing distracted driving through a combination of awareness, behavioral analytics, and consequences can contribute to safer roads and lower insurance costs.
PLM Resources
PLM’s state-of-the-art fleet management and distracted driving prevention resources and services are designed to optimize your fleet operations and safety:
- To learn more, please visit our Auto/Fleet Loss Control Guidelines.
- PLM is pleased to offer our customers telematics monitoring through Azuga and GPS Insight, both industry leaders in driver risk management. To learn more, please visit Telematics on our website
- Discover LifeSaver Mobile – Cell Phone Blocking and Monitoring.
General Liability Claims
Slip and Falls… Caught on Camera
Unwitnessed Slip and Fall Claims
In today’s environment, supposed general liability claimants are continuing to increase in numbers. As the insured, it is imperative to know how best to protect yourself to ensure you’re only addressing legitimate claims.
Recently, we’ve seen an increase in unwitnessed slip and fall claims. And what we’ve found is that although an actual person may not have seen the supposed claimant fall, we also do not have any video footage. We understand you as the insured’s focus is to run the organization and not monitor every move of a customer. But you can install cameras inside and around your premises to help your organization when you face such claims. The situation moves from a he said she said and what one saw or didn’t see to actual footage and facts to support or debunk the claim in question.
With insurance costs on the rise across all lines, you could ultimately help your organization manage costs by installing cameras. It would truly go a long way. In fact, we’ve seen claims where we’ve paid little to no money when the client had cameras. Equally, we’ve paid claims where the client had cameras and was at fault and we provided them with resources, so they don’t repeat the same loss. Then we see claims where the client has no cameras, and we see repeat slip and fall claims—and many of these claims are in the six-figure range.
Potential Insurance Policy Consequences
If you as the insured keep receiving slip and fall-related losses, you may face consequences like:
- Increased Rates.
- Changes in Terms and Conditions.
- Losing Your Insurance Policy.
- Being Placed in the Excess and Surplus Market with Reduced Coverage.
Efficient Strategies to Counteract Rising Claims Costs
One effective approach to mitigating the growing expenses associated with insurance claims is the installation of cameras, a relatively affordable investment, typically priced at around $100 each. Here are some key considerations to bear in mind:
- Cameras as a Preventative Measure: Embracing cameras as a proactive deterrent can yield substantial long-term savings. The decision to invest in these cameras now could mean the difference between minor expenses and potentially exorbitant costs down the road.
- Fraud Mitigation: A significant portion of insurance claims, approximately 10%, is marred by fraud, imposing a staggering annual cost of around $30 billion on the industry. Notably, certain claims can reach significant amounts, such as a recent $367,000 slip and fall case that lacked camera evidence. By incorporating camera systems, you can deter fraudulent claims and compile compelling evidence to safeguard your business. This preventive approach can help you avert costly claims and serve as a cost-effective means to manage financial risks linked to insurance claims.
- Strategic Choice: An illustrative example is a case involving a $750,000 payment for an unwitnessed loss, a scenario where no cameras were in place. Recently, opposing counsel presented an alleged location of the fall on a sidewalk adjacent to the insured property, supported only by a photograph displaying a sidewalk protrusion. This situation underscores the critical need for proactive measures.
When evaluating claims, it is prudent to search for neighboring videos, ascertain liability, and obtain ambulatory records from the pertinent timeframe. Even if such records are located, they do not conclusively establish liability on the part of our client. However, lacking any form of evidence places us at a distinct disadvantage in certain jurisdictions.
To address this, clients should explore third-party camera services, which offer equipment and cloud services. Many of these companies provide robust programs for clients to engage with. Given that many statute of limitations are set at two years, it is advisable to select a company willing to store your data for at least three years, ideally five years. This extended data retention ensures compliance with statute of limitations requirements, allowing the legal system to fulfill its role, even in cases that may span several years.
Opting for a third-party service is preferable to self-installing cameras, as the average individual lacks the infrastructure to manage and swiftly access large volumes of data when needed for a claim.
In conclusion, the utilization of cameras as part of a comprehensive risk management strategy is an investment in security, fraud prevention, and cost-effectiveness. We encourage clients to consider third-party camera services, ensuring extended data retention to meet statute of limitations requirements. This approach positions businesses to proactively manage and defend against potential claims, reducing financial exposure in the long run.
PLM Resources
PLM offers our commercial client’s a tool to help monitor their operations:
- To learn more about our complete portable alert system in a box, please visit our Tattletale solution.
Contact PLM
The Claims Files: Mitigating Large Losses is a true account of actual large loss situations. This is an excellent initiative to promote safety and learning in this field. Our goal in sharing these real-life situations is to better educate our insureds in hopes of ultimately reducing risk. Equally, we want to create an ongoing dialogue where we can openly discuss and regularly share lessons learned. If you have specific questions or feedback regarding the article or wish to initiate a discussion, you can reach out to Veronica Wilkins at vwilkins@plmins.com.
