Reporting
Vendors
Information Flow
Cost Control
Litigation Management
Performance
In Summary

Vendors

Preferably, your chosen TPA will have a proven industry niche. Determine if the TPA can provide an industry specific network of experts, including independent adjusters, attorneys, reconstructionists, etc., to promptly respond to and control your loss activity. Some things to remember in this area:    

• Make sure that the TPA is not affiliated with any of the field vendors they utilize. When directing and controlling the activities of the field adjuster, the TPA has to be absolutely autonomous, objective and willing to challenge the expenses that are being charged against the claim. If the TPA is affiliated with the field adjuster, their objectivity may become compromised and your expense ratios will suffer.
• Make sure that the TPA does not saddle you with a team that has a high workload, in a variety of areas. Many times, the team assigned to your account will have an inordinate amount of claim files, from a variety of industry types, not necessarily yours. This multi-line approach will only serve to deteriorate your loss results. Bottom line, if your TPA is to handle your liability losses, make sure that your assigned handlers are not also responding to property losses, workers compensation claims, med-mal or legal-mal claims, or any of the other types of claims that are dissimilar to the exposures that you face everyday. Claim handlers can't be effective if they are spread too thin among various types of loss activity. Under poor in-house conditions, TPA claims get paid just to move them along. Who pays? You do.
• Try to make sure that the field adjuster's work is limited to task specific or menu assignments if possible. Unless the TPA is dealing with a significant loss, the field adjuster's work should be very limited and precise in scope. If the TPA can take the recorded statement instead of the field adjuster for instance, your expenses are reduced and you are getting a better bang for your buck with the TPA. Too many times, the contracted TPA will outsource insignificant tasks to the field adjuster because the TPA realizes that this frees up the TPA employee and the extra field cost is easily (and subliminally) passed through to the client. What this does of course is inevitably increase the loss adjustment expenses associated with the claim.
• Last comment as to vendors; try to make sure that the TPA's vendor network understands the tort nuances that confront your industry group. Too many times today, vendors are chosen based on some previous relationship they've had with the inside TPA employee as opposed to any significant degree of competence they need to do the work. For instance, for motor carrier clients, the TPA needs to exclusively enlist industry recognized defense counsel that understand the technical issues that confront and plague trucking companies today.