6 Preventable Factors That Drive Workers’ Comp Costs
October 21, 2026
Workers’ compensation premiums don’t increase by accident. Many higher costs can be traced back to recurring issues that employers can identify and improve. Here are six common factors that drive costs and one practical step you can take to address each.
Quick check for savings opportunities
- Are all injuries reported the same day?
- Do you investigate all claims?
- Do supervisors actively participate in safety observations?
- Do you have documented transitional-duty tasks?
- Have job classifications been reviewed in the past year?
- Do employees receive hands-on training during their first 30 days?
If you answer no to any of these questions, you may have preventable workers’ comp costs.
1. Injuries that are reported late
Why it adds costs
When injuries aren’t reported promptly, treatment may be delayed, investigations become more difficult, and claims often become more expensive to manage.
First action to take
Train supervisors to report every workplace injury immediately, even if it appears minor.
EXPERT INSIGHT
“The longer an injury goes unreported, the fewer opportunities we have to support recovery and manage the claim effectively. Early reporting helps us establish the facts, coordinate care, and start the claim in the right direction from day one.”
-Kellie Chaloupka, Senior Vice President, Claims
2. The same incident keeps happening
Why it adds costs
Recurring injuries often signal an unresolved root cause, and can even predict future losses. Your experience modification factor (mod) and/or premium costs may increase more from an often repeated minor injury than from one serious, costly injury.
First action to take
Review your claims and near misses from the past year and identify any common tasks, locations, equipment, or behaviors.
EXPERT INSIGHT
Organizations that consistently learn from incidents and implement related safety precautions tend to experience fewer repeat injuries and lower long-term costs.
-Summit Loss Prevention
3. Supervisors are not part of the safety process
Why it adds costs
Employees take their cues from frontline leaders. When supervisors don’t consistently reinforce safe practices, injury frequency often increases.
First action to take
Have supervisors conduct walk-throughs of their work areas at regular intervals and immediately address hazards. If your business has a formal safety committee, make sure it has supervisor representation.
EXPERT INSIGHT
When we review loss trends, recurring injuries often point to a gap in supervision and follow-through. Supervisors play a critical role in breaking that cycle.
-Summit Loss Prevention
4. Employees stay out of work longer than medically necessary
Why it adds costs
When employees remain out of work for longer periods, employers can face higher wage replacement costs, greater staffing disruptions, and more likelihood of attorney involvement. Extended lost-time claims can also have a larger impact on an employer’s mod, which may increase workers’ compensation premiums for years to come.
First action to take
Before an injury occurs, identify three transitional tasks that would be appropriate for any employee returning to work. Having this plan in place will save time when it matters. (During injury recovery, you’ll need to ensure these tasks comply with doctor’s restrictions.)
EXPERT INSIGHT
“When suitable modified or alternate duties are available, injured employees can resume productive work sooner, decreasing claim costs. The added bonus is that earlier return to work benefits employee morale and mental health.”
-Nekitta Tomberlin, Back2work Liaison
5. Payroll and classifications are not reviewed regularly
Why it adds costs
Classification errors and inaccurate payroll reporting can affect premium calculations and create audit surprises.
First action to take
Review employee job duties regularly throughout the policy year, document any changes in responsibilities, and communicate them with the agent or Summit underwriter. Don’t wait until the annual premium audit to disclose a change.
EXPERT INSIGHT
“Employers often think about classifications only at renewal, but businesses evolve throughout the year. Taking time to review payroll allocations and employee duties periodically can help prevent costly audit adjustments at year end and ensure payroll is being reported accurately.”
-Eric Jones, AVP, Premium Audit
6. Employees are not fully prepared to navigate safety hazards in a new workplace or role
Why it adds costs
Employees face a learning curve when they join an organization, transfer to another role, or take on new responsibilities. Some may bring years of experience in their field, but they still need training on the business’s specific hazards, equipment, procedures, and safety expectations. Experience may shape how training is delivered, but every employee needs preparation and support to perform the job safely.
Summit stat: 50% of Summit claims involve employees with less than one year of job tenure. This figure reflects time with the organization, not necessarily overall experience in the line of work.
First action to take
Develop a 30-day onboarding plan for new hires and recently transferred employees. Include first-day orientation, hands-on training and demonstrations, supervisor observation and coaching, regular check-ins, and a 30-day review.
EXPERT INSIGHT
Don’t let training end after orientation. In reality, that’s when it begins. Whether employees are new to the work or simply new to a business, they need time, observation, and coaching to apply safety expectations in their day-to-day work.
-Summit Loss Prevention
Workers’ comp costs often reflect patterns, not isolated events. Employers that consistently achieve better results are those that identify problems early and take corrective action.