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).
While strong safety programs prevent many workplace injuries, injuries happen. Understanding what drives claims costs shows you exactly where to focus your energy.
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:
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-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.
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.
Understanding who controls what is essential to influencing outcomes.
Your carrier typically controls:
You influence:
Your broker’s role as an expert guide:
While your carrier administers claims, how actively you manage a claim can materially affect its length, cost, and long-term impact on your business.
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.
Early reporting is one of the most effective ways you can reduce workers' compensation claim costs.
When you report injuries immediately:
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.
Take a deeper dive into why you should report a workplace injury immediately.
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.
"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:
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.
Read how Stinger Logistics reduced indemnity costs by 70%
Many claims don’t become costly because of the injury itself—they become costly because something goes unnoticed.
Common examples include:
Without visibility, these issues can persist for weeks before you intervene.
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.
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.
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).
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.
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.
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.
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.
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.
If you're not ready for a claims management assist from technology:
Discipline matters. Technology makes active management scalable; discipline makes it happen at any size.
Start with one change this week:
Pick one. Do it this week.
Once you've established your internal processes, strengthen your external partnerships:
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.
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.