Our corporate site Contact us

Article

Leveraging industry benchmarks to drive workers’ compensation claims mitigation strategies

Reduce workers’ compensation costs with proactive safety programs, injury prevention strategies, and effective claims management for a safer workplace.

Workplace injuries that lead to workers’ compensation claims remain a significant challenge for organizations across industries and geographies. These incidents can be devastating for the workers themselves, potentially impacting their health, livelihood, and well-being.

For employers, the consequences can extend from human and productivity impacts to potentially substantial financial costs. Total workers’ compensation costs — including claims, administration, and premiums — exceeded US$176 billion in 2023. Marsh’s data lake shows that the six-year average claim value was upwards of US$11,600 in October 2025, with the average lost time incurred reaching almost US$40,000.

Given the high stakes, it can be critical for senior leaders to devise strategies aimed at preventing injuries before they occur, thus reducing workers’ compensation claims and controlling costs. Aside from fostering a safer, more productive workplace and protecting employees’ health and well-being, prevention strategies can help improve an organization’s financial performance.

Understanding safety management systems

Organizations typically focus their safety management systems on one of two types of programs:

Fundamental safety programs are often compliance-driven and reactive. These programs generally exist primarily to meet regulatory requirements — such as mandates by the Occupational Safety and Health Authority — and changes are usually made only after accidents or incidents occur. Policies and procedures tend to be generic and top-down, with executive leadership pushing safety rules down through the organization. While necessary, this approach can limit engagement and proactive risk management.
Strategic safety programs, by contrast, embed safety as a core pillar of the organizational culture. Safety is integrated into daily operations and decision-making, with continuous improvement and proactive risk identification as hallmarks. In these organizations, safety always has a seat at the table and is not viewed as an add-on but as fundamental to how business is conducted.

The progression from fundamental to strategic safety can be understood through a safety maturity matrix, which includes stages such as:

Pathological: Safety is ignored unless someone is watching
Reactive: Safety efforts ramp up only after incidents
Calculative: Systems are in place to assess and manage risks
Proactive: Organizations actively seek to identify and fix hazards before incidents occur
Generative: Safety is ingrained in every aspect of the business and drives how work is done

Organizations aiming to reduce workers’ compensation claims should assess where they stand on this maturity curve and commit to advancing toward a more proactive and generative safety culture.

Key prevention strategies

Effective prevention begins with a clear understanding of the current safety culture and workforce engagement. Conducting safety culture assessments can help organizations gather employee feedback on what is working and where gaps exist. Understanding how employees perceive and tolerate risk can be critical. For example, are they aware of and understand the extent of specific hazards? Or do they underestimate them?

Job hazard assessments can be essential to identify risks specific to different roles and environments, whether office-based, industrial, fieldwork, or driving. Tailoring safety programs to these unique hazards allows them to remain relevant and effective.

Ergonomics programs play a vital role in preventing injuries, especially strains and sprains, which Marsh data shows are among the leading causes of workers’ compensation claims. Ergonomics programs are critical for all types of workers, including those in an office environment, as well as those in manufacturing, healthcare, education, and driving roles. The principle is to fit the job to the worker, accommodating different body sizes and statures with flexible workstations and appropriate tools.

A best practice is treating employees as “industrial athletes” who need to prepare their bodies for work. Stretch and flex programs, warm-up routines, and wellness initiatives help reduce injury risk by improving physical readiness and resilience.

Addressing common causes of injury

According to Marsh data, the most frequent injury types are sprains and strains, which account for 31% of claims, followed by slips, trips or falls (17%), and struck or injured by objects (16%). Motor vehicle accidents have led when it comes to average claims costs at $21,701, followed by slips, trips, or falls at $17,924, and sprains and strains at $14,491.

Considering the potential repercussions of these incidents, both on employees and the organization, it is critical for senior leaders to have established strategies for mitigating the specific risks related to the top causes of injury. These include:

Strains and injuries by physical exertion: Implement ergonomics programs, provide proper lifting equipment, and train employees on safe material-handling techniques.
Slips, trips, or falls: Conduct regular workplace inspections to identify hazards, such as wet floors, uneven surfaces, or clutter. Use clear signage, maintain housekeeping standards, and encourage personal accountability through training on mindful walking and proper footwear. Seasonal challenges, like snow and ice, require proactive measures, such as monitoring of weather alerts, wet floor signs, and salting of outdoor areas.
Struck by or injured by objects: Provide employees with the right tools for their tasks, maintain equipment in good working order, and enforce good housekeeping to prevent clutter and falling objects. Personal protective equipment (PPE) such as hard hats, safety shoes, and glasses should be used consistently.
Motor vehicle accidents: Fleet safety programs are critical, covering all company vehicles from large trucks to passenger cars. Key components include driver training, monitoring driving records, vehicle maintenance, and, where possible, investing in advanced telematic technologies that track driving behaviors to enable coaching and risk reduction.

Proactive advocacy can help mitigate litigation risks

Although prevention should be the north star, managing workers’ compensation claims effectively when they occur is equally important to control costs. One potentially critical action is to engage in proactive advocacy before an injured worker seeks attorney representation, since litigated claims often carry significantly higher costs and complexity. Whereas the average incurred for lost time claims is $39,370, this increases to $65,489 for those that are litigated.

Key approaches can include clear, transparent, and timely communication with injured workers to inform them about the claims process and any benefits they are entitled to in order to build trust and reduce confusion. Prompt and fair claims handling, including timely approvals and updates, helps prevent frustration that might lead to legal representation.

Compassionate engagement from all parties, including frontline managers, claim adjusters, and nurse case managers, reinforces support for injured workers and fosters positive relationships. Educating workers on their rights and responsibilities throughout the claim lifecycle can help mitigate litigation risks.

Ultimately, organizations are tasked with creating a positive workplace culture that values employee well-being and reduces fear of retaliation from the company.

Commitment, engagement, and continuous improvement

Reducing workers’ compensation claims through prevention is not an overnight fix; it requires sustained leadership commitment and workforce engagement. Organizations should start with a comprehensive assessment of their current risks and safety culture and formulate a clear plan for improvement.

Focusing on achievable initiatives can help build momentum and employee buy-in. Integrating safety into the operational model sends the message that this is always a priority, not an afterthought. Regular monitoring and transparent communication about progress and setbacks foster trust and continuous improvement.

Ultimately, a strong prevention focus can lead to a safer workplace, a more engaged and productive workforce, and improved financial outcomes. By embracing proactive safety management and targeted prevention strategies, organizations can significantly reduce the human and financial toll of workplace injuries.

Heating plant technician standing by gas pipes and maintaining temperature inside power plant boiler room.

Webcast