Workers’ compensation can often feel like one of those “set it and forget it“ expenses, but here’s a little secret: Your actions can significantly impact your bottom line. At Pinnacol, we’ve seen it all, and we want to help you avoid the common pitfalls that send costs climbing.

Here are the top five mistakes we see, how you can fix them and one bonus tip with an underused way you can save 10% on your premium.

1. Thinking “light duty” is too much trouble

When an employee is injured, it might seem easier to just let them stay home until they are 100% well again. In reality, the longer a worker is away from the job, the harder it is for them to return.

• The mistake: Not having a Return to Work or modified-duty program.
• The cost: Indemnity (lost wage) payments add up fast. Plus, you lose a valued team member’s institutional knowledge.
• The fix: Identify “light-duty” tasks — such as administrative work, safety inspections or inventory — that an employee can perform while recovering. Staying connected to the workplace speeds up the healing process and significantly reduces claim expenses. For example, Pinnacol’s Return to Work program saves our members $10,000 per claim, on average. 

2. Using the “wait and see” approach to reporting injuries

We get it — an employee mentions a “little tweak” in their back, and you both hope it’ll feel better by Monday. But waiting to report an injury is one of the quickest ways to increase claim costs.

• The mistake: Delaying the “first report of injury.”
• The cost: Late reporting leads to slower medical treatment, which can turn a minor strain into a major complication. 
• The fix: Report everything, no matter how small, as soon as you know about it. Ensure every supervisor knows exactly how to document an incident immediately. Prompt reporting allows for faster medical care and ensures the claim is handled efficiently from day one.

3. Treating safety training like a “one and done”

Safety isn’t a box you check once during orientation and never think about again. It’s a culture that needs constant nurturing.

• The mistake: Neglecting ongoing safety training and hazard assessments.
• The cost: High injury frequency leads to higher experience modification (e-mod) ratings, which translates directly to higher premiums.
• The fix: Establish a continuous safety culture. This includes regular “toolbox talks,” quarterly safety audits and potentially a safety committee made up of employees. When safety is proactive rather than reactive, the number of claims — and your costs — will drop. Pinnacol’s safety team provides resources, training and expertise to make jobsites safe. After just one visit from Pinnacol’s safety experts, many members see their claim frequency drop by 38%.

4. Mixing up the class codes

Workers’ comp premiums are based on the type of work your employees do. If your front-desk receptionist is accidentally classified as a roofer, you’re paying way more than you should. Conversely, misclassifying a high-risk worker can lead to penalties during an audit.

• The mistake: Misclassifying employees or ignoring the annual audit.
• The cost: This can lead to unexpected back payments, fines or simply overpaying for coverage you don’t need.
• The fix: Review your job descriptions and payroll classifications annually. Ensure that employees who have moved from the field to the office are updated to the appropriate (and often less expensive) codes. Accurate data is the key to paying exactly what you owe and nothing more. 

5. Sending employees to “whoever is closest”

In an emergency, go to the ER. But for everything else, where an employee goes for medical care matters — a lot.

• The mistake: Not using a designated provider network that specializes in occupational injuries and illnesses.
• The cost: Out-of-network care is often more expensive and less focused on the specific goal of occupational recovery.
• The fix: Partner with occupational health specialists. Build a relationship with a local clinic that understands workers’ comp regulations and prioritize providers who specialize in getting workers back to health and back to the job safely. Pinnacol’s preferred provider network, SelectNet, reduces claim costs by an average of $2,400 compared to out-of-network providers.

Bonus mistake! Missing a guaranteed premium discount

Colorado’s Premium Cost Containment program rewards businesses that document a formal safety program for at least one full year. By meeting six specific criteria — including having a written safety policy and a designated provider list — your business can qualify for a premium discount of up to 10%. To make it easy, Pinnacol offers a free cost containment concierge service that walks you through the six-step process, documentation and application.

The bottom line

Reducing your workers’ comp costs isn’t about cutting corners; it’s about being proactive. Whether it’s reporting an injury five minutes sooner, getting injured workers back on-site with light-duty assignments or building a relationship with your medical providers, a few small steps can lead to big savings.

Ready to start saving on workers’ comp? 

Lock in an up-front discount of up to 15% on a new policy. Get a quote in 90 seconds or connect with your agent today.