How Employers Can Manage Workers’ Compensation Claims More Effectively

Your delivery driver is rear-ended at a stoplight. The other driver's clearly at fault, so you assume their insurance will cover everything. You don't report a workers' comp claim. Weeks later, your employee hires an attorney. The attorney directs them to a medical provider and takes them off work.

By the time you realize what's happening, you've lost control—neither you nor your carrier's adjuster are receiving work status updates or medical records.

This scenario plays out more often than you'd think. Many mid-sized and large businesses treat workers' comp claims as something carriers handle. You file the paperwork, trust the process, and hope costs stay reasonable. But a wait-and-see approach is expensive—for both you and your injured employees. Worse still, failing to report because you assume "someone else will handle it" can cost you control of the entire claim.

The direction a claim takes is determined in the first days after injury. According to the National Council on Compensation Insurance (NCCI), claims reported three weeks after an injury are almost 30% more costly than claims reported within one week. That's not just about money—delays mean delayed care, extended recovery times, and damaged employee trust.

You don't need to become a claims expert. You do need to know the critical moments where your involvement matters most. This guide shows you exactly where your action has the most impact, and how early intervention protects both your people and your bottom line.

Important note: This guide covers general principles that apply across most states, but workers' compensation is regulated at the state level and requirements vary significantly. Always confirm reporting deadlines, benefit rules, and procedural requirements with your carrier or broker for your specific state(s).

What Drives Workers' Compensation Claims Costs?

While strong safety programs prevent many workplace injuries, injuries happen. Understanding what drives claims costs shows you exactly where to focus your energy.  

Frequency vs. Severity

Frequency is how often injuries happen while severity refers to how much an injury costs. Look at your loss runs from the past three years, with your carrier or broker, to see patterns driving workers’ comp costs in your business:

• High frequency, low severity (multiple minor strains or slips, trips, and falls): Invest in prevention like wearable safety devices, slip-resistant shoes, and proper lifting equipment as well as active claims management.
• Low frequency, high severity (a few claims totaling hundreds of thousands of dollars): Focus on the strategies in this guide—especially early reporting and return-to-work—to manage claims costs.

Most mid-sized to large businesses have both patterns. While prevention can reduce the risk of injuries happening, active claims management manages the costs that arise if an injury does happen.

Medical vs. Indemnity Costs

Medical-only claims cover treatment for minor injuries where the worker returns to work quickly. Indemnity claims, where workers miss time, cover both medical care and lost wages. This distinction matters because indemnity is where costs can explode. A $14,000 bruised tailbone becomes a $28,000 claim when light duty isn't accommodated and the worker is out of work for weeks.

Reserves and Future Premiums

Claim reserves are the estimated costs a carrier sets for a particular claim. These estimates drive your experience modification factor (ex-mod), loss ratio, and subsequent premiums. Early direction (or management) often impacts a claims reserving accuracy more than reserve reductions that occur later in the life of the claim, especially if that occurs after policy renewals or Unit Statistical Reporting. 

Workers' Compensation Claims: Your Role vs. Your Carrier's Role

Understanding who controls what is essential to influencing outcomes.

Your carrier typically controls:

• Claim adjudication and compensability decisions
• Medical bill payment
• Indemnity payment issuance
• Legal defense when required

You influence:

• How quickly a claim is reported
• The quality and accuracy of information provided
• Communication with the injured employee
• Availability of modified or transitional work
• How quickly issues are identified and escalated

Your broker’s role as an expert guide:

• Help you understand what to expect
• Leverage carrier relationships
• Advocate on your behalf
• Identify issues early
• Facilitate resolution

While your carrier administers claims, how actively you manage a claim can materially affect its length, cost, and long-term impact on your business.

4 Ways You Can Influence Workers' Compensation Claim Costs

Claims don't spiral because of the injury—they spiral because small issues go unnoticed. A missed appointment here, a communication gap there, and suddenly you're facing litigation.

Active claims management changes this dynamic. It's intentional, timely, and focused on keeping claims moving forward. You stay informed, understand where a claim is in its lifecycle, and act quickly when progress stalls. AI can support this approach by analyzing large volumes of claims data to surface critical moments for intervention and recommend specific actions.

“Sometimes claims get stuck,” says Jonathan Cook, vice president of product at Kinetic Insurance, in a recent article with Nationwide on AI in claims management. “They wind up in a holding pattern where the action plan is the same because there are no big changes and there’s no noticeable improvement for the injured worker.”

These four strategies give you leverage at the moments that matter most.

1. Change Outcomes by Reporting Claims Early

Early reporting is one of the most effective ways you can reduce workers' compensation claim costs.

When you report injuries immediately:

• Your employees receive appropriate care sooner
• Adjusters can investigate while details are fresh
• Medical direction is clearer
• Return-to-work planning begins earlier

Delayed reporting, on the other hand, increases uncertainty and costs. Claims you report weeks after an injury are more likely to involve higher medical utilization, longer time away from work, and attorney involvement.

According to the NCCI, delayed reporting dramatically increases both costs and legal risk. Claims reported three weeks after an injury cost 30% more than claims reported in week one. Wait four weeks, and costs jump 40%—plus, litigation risk doubles from 16% to 32%.

What does early mean? Reporting deadlines change by state. Speak with your carrier or broker for deadlines relevant to your state. Most carriers recommend reporting an injury within three calendar days as, generally, temporary disability pay begins on day four.

Best practice: Report an injury within 24 to 48 hours to mitigate loss and ensure best outcomes.

How to build an early reporting system

• Train your managers on the importance of prompt reporting. Your managers need to understand their responsibility—both to your company and to the injured worker.
• Post claims reporting guidelines in accessible spots throughout your facility. Your supervisors should be able to easily access reporting information like phone numbers and the information needed to file a claim.
• Report all claims. If an injured employee alleges workers’ compensation, report the claim regardless if you think it is a workers’ compensation claim or not related.Your adjuster will make that determination per jurisdictional guidelines.
• Document the reporting process. Your process should designate who's responsible for reporting incidents, as well as who fills in if the primary contact is absent.
• Use nurse triage if your carrier offers it. Triage lines help injured workers understand next steps immediately and steer them to appropriate care—preventing ER visits for minor injuries and ensuring serious injuries get proper treatment.

Take a deeper dive into why you should report a workplace injury immediately.

2. Keep Claims Moving by Communicating Early and Often

You play a critical role in maintaining consistent, clear communication between your injured employee, the claims adjuster, and medical providers.

When injured employees understand what's happening and feel supported, they attend appointments, follow medical restrictions, and stay engaged in recovery. When communication breaks down, they may feel frustrated or disengaged which can lead to delayed recovery and litigation risk.

How to communicate effectively throughout the claim

• Reach out immediately after the injury. Express concern for their well-being and explain what happens next: they'll receive medical treatment, an adjuster will review their claim, and you'll stay in touch throughout their recovery.
• Set expectations about the claims process. Give the employee the information they need regarding who to contact with questions and how they can check on their claim status. Let them know, as part of the standard process, they may receive a call from an adjuster to review their injury.
• Check in regularly—at least weekly. Focus on your employee's well-being and recovery path. Share any barriers to recovery with your adjuster.
• Discuss return-to-work options early. Don't wait until they're cleared. Plant the seed that modified duty or light duty work may be available when the time is right.
• Be the connection point. If the employee has questions for the adjuster or needs to relay information about their treatment, make yourself available to facilitate that communication.

3. Reduce Indemnity Exposure with Return-to-Work Programs

"A return-to-work program is more than a nice thing to do," says Bonnie McCaig, director of claims at Kinetic Insurance, in a recent article with Nationwide. "The evidence strongly supports a significant ROI by providing a supportive pathway to full recovery with tangible benefits to the employee and employer."

Indemnity costs are driven by time away from work. The longer your employee is out, the more expensive your claim becomes. Often, you and your employee miss out on RTW benefits simply because you don't have a process to act quickly.

Structured RTW programs help you:

• Bring employees back safely sooner
• Maintain productivity
• Improve morale and retention (replacement of frontline employees costs 40% of their salary, according to Gallup)
• Reduce potentially fraudulent or exaggerated claims

Effective RTW programs focus on capabilities, not limitations. Even temporary or modified duties—like clerical work, light housekeeping, repairs or maintenance—can significantly reduce your indemnity exposure while supporting recovery.

A study from Johns Hopkins University found that workers' compensation costs went down by 54% over 10 years when a combined claims management and RTW program was used.

How to build an effective return-to-work program

• Develop and distribute a written policy. Your policy should include goals, eligibility criteria, roles and responsibilities, and processes. Design your RTW program with this implementation guide.
• Proactively identify modified work duties and establish a job bank. Think through this before injuries happen. For example, last-mile delivery drivers on modified duty, based on their specific restrictions, could complete administrative tasks, participate in new-hire recruitment and onboarding, complete inventory, or perform light housekeeping or repairs.
• Train your supervisors on the program's goals, procedures, and expectations. Your frontline supervisors are the ones who'll make or break your RTW program. When they understand why it matters and how to implement it, compliance follows naturally.
• Communicate with healthcare providers and employees. Notify healthcare providers of modified duty opportunities. Communicate with employees to address any concerns with the program and adjust as needed.
• Offer modified duty as soon as their treating doctor provides work restrictions. If a doctor clears your employee for any work—even limited hours or light duty—that's your window to reduce indemnity costs.
• Evaluate the program's effectiveness and celebrate success. Track how many employees return to work and how long they were on modified duty. Share wins with your team to build momentum.

Case Study: Stinger Logistics

Read how Stinger Logistics reduced indemnity costs by 70% 

4. Monitor Claims to Prevent Small Issues From Becoming Expensive Problems

Many claims don’t become costly because of the injury itself—they become costly because something goes unnoticed.

Common examples include:

• Missed medical appointments. The longer your employee goes without scheduling an office visit, the more likely they are to accumulate lost work time and indemnity payouts.
• Changes in work restrictions aren’t communicated. Work restrictions are the signal you can safely get your employee back on the job.

Without visibility, these issues can persist for weeks before you intervene.

How to monitor claims effectively:

• Assign a designated claims handler. Have a single contact responsible for managing the claim from start to finish. This provides continuity and accountability while keeping claims moving.
• Set a time aside each week to review claims. Regular reviews of overall claim data as well as specific claim progress, treatment plans, and RTW status help keep claims on track.  This is especially valuable if claims are one of the many jobs you do. Block 30 minutes every Friday—it's how you catch issues before they compound.
• Build a collaborative relationship with your adjuster. Exchange direct contact info so adjusters can reach you, agree on how often you will check in, and treat the adjuster as your partner.
• Provide timely and accurate information. Respond quickly to adjuster requests to maintain momentum.
• Keep detailed and organized documentation. Log calls, emails, approvals, and follow-ups to reduce misunderstandings and support consistent decision-making.

How Technology Supports Workers' Compensation Claims Management

The gap between passive and active claims management used to be time and expertise—specifically, how much time someone could dedicate to monitoring every claim and whether they knew what to do next. AI-powered platforms are changing that equation by automating the monitoring you'd do manually if you had unlimited hours and guiding you on what to do next.

What These Systems Actually Do

Real-time claim monitoring

Traditional approach: You review claims weekly or monthly, lag time can mean catching issues after they've compounded.

Technology approach: Platforms analyze every claim against historical patterns daily, flagging deviations immediately. A medical appointment gets canceled with no follow-up scheduled? You get an alert the next day, not three weeks later when the adjuster notices treatment has stalled.

Return-to-work tracking

Traditional approach: You remember to check for updated work restrictions, or you miss updates hidden in different systems.

Technology approach: Systems alert you the moment a doctor changes restrictions from "no work" to "modified duty"—critical timing since indemnity becomes mandatory in most states after waiting periods expire (typically 3-7 days).

Predictive prioritization

Traditional approach: You treat all claims equally until one obviously goes wrong.

Technology approach: Algorithms assess each claim's litigation risk, expected duration, and cost trajectory based on injury type, industry, and treatment patterns. You focus your time on the 15% of claims driving 85% of your costs.

When It's Worth Considering

You've had claims unexpectedly escalate

If routine injuries have turned into six-figure claims and you couldn't pinpoint when things went sideways, claims monitoring platforms show you the warning signs.

Your state has short waiting periods

In states where indemnity kicks in after 3 days, the ROI on RTW tracking is immediate. Missing that window by even 48 hours multiplies costs.

You have limited staff for claims management

If claims are one of the fifteen things you do, automation gives you leverage. You can't watch 10 claims manually, but you can respond to 2 alerts.

It’s included as part of your workers’ compensation policy

If your carrier, like Kinetic, provides claims monitoring tools as part of your policy, the barrier to entry is zero. Not using them means you're leaving employer control on autopilot when you could be steering toward better outcomes.

What You Can Do Without Technology

If you're not ready for a claims management assist from technology:

• Block 30 minutes every Friday for claims review with a standard checklist
• Set calendar reminders for your state's indemnity waiting period
• Build a simple spreadsheet tracking: injury date, last medical visit, current restrictions, next scheduled appointment
• Actively follow up with the medical provider and/or adjuster for work status updates and restriction changes.
• Confirm light-duty options match current medical restrictions.
• Partner closely with your adjuster – exchange direct contact info and agree on communication frequency

Discipline matters. Technology makes active management scalable; discipline makes it happen at any size.

Take Action On Your Workers' Compensation Claims Management

Start with one change this week:

• Monday: Establish a 24-hour reporting standard. Email your managers with new workers’ compensation claims reporting guidelines.
• Wednesday: Schedule your first modified-duty planning session. Block 60 minutes to identify 5-10 light-duty tasks available in your facility.
• Friday: Block 30 minutes on your calendar for weekly claims review. Create a simple spreadsheet with these columns: Employee name, Injury date, Last medical visit, Current restrictions, Next scheduled appointment.

Pick one. Do it this week.

Beyond Week One: Build Your Support System

Once you've established your internal processes, strengthen your external partnerships:

• Audit your carrier resources: Call and ask what claims monitoring tools, reports, or support programs are included in your policy. Many employers have access to resources they've never used.
• Engage with your broker: Discuss claims with your broker to identify patterns and create strategies to address them. Brokers see trends across clients that you might miss.
• Know your adjusters: Get direct contact information for the adjusters handling your claims.

The difference between passive and active claims management isn't complexity—it's intentionality. Active claims management starts with a single intentional action. Take yours today.

Frequently Asked Questions About Workers' Compensation Claims

About the authors

This guide was developed by Kinetic Insurance's claims management team, collectively representing over 30 years of experience in workers' compensation claims across safety-critical industries like manufacturing, logistics, and hospitality.

Last reviewed: January 2026

Sources:

Facts + Statistics: Workplace Safety/Workers Comp, Insurance Information Institute, accessed January 2, 2026
42% of Employee Turnover is Preventable but Often Ignored, Gallup, July 9, 2024.
Snelgrove-Clarke et al., "Ten years' experience using an integrated workers' compensation management system to control workers' compensation costs," Journal of Occupational and Environmental Medicine, May 1, 2023.
2025 State of the Line Guide, NCCI, May 13, 2025
2017 - 2019 data for non-fatal injuries in NCCI covered states for workers' compensation guaranteed cost policies with premiums >50k
Workers' Compensation Costs, NSC Injury Facts, accessed January 2, 2026

Safety talk information is for general guidance only and should not be relied upon for medical advice or legal compliance. Recommendations provided are general in nature; unique circumstances may not warrant or may require additional safety procedures and considerations.  Kinetic, its affiliates and employees do not guarantee improved results upon the information contained herein and assume no liability in connection with the information or the provided suggestions. Kinetic does not make any warranty, expressed or implied, that your workplace is safe or complies with all laws, regulations, or standards.