Costly Delays in Reporting Workers’ Compensation Claims

Many employers allow too much time between a workers' comp injury and a report to the administrator handling their claims. The average time in California is 16 days between injury and notification.

Delay in reporting workers’ compensation claims is costly. The National Council on Compensation Insurance published studies show the cost of a claim increases by 4 percent for each day of delay in reporting. Claims that are filed between 11 and 20 days increase the cost of injury by 29 percent. Between 21 and 30 days, the increase is 39 percent.

Claims reported more than 30 days late increase by 48 percent. Litigation rates also increase. If a claim is reported within 10 days, the litigation rate is 22 percent. For claims filed more than 30 days late, the litigation rate skyrockets to 47 percent.

The CWCI’s latest Research Update indicates that since the 2004 California work comp. reforms, the average number of days from the date of injury to claims administrator notification has improved 23% from more than 20 days to now 15.7. But this is still much too long.

Reporting a claim doesn’t need to be complicated — just pick up the phone, send a fax, or go online any time of day or night. By whatever method, it’s important to get the insurance carrier or claims person involved immediately to ensure a proper investigation. Even if you don’t have all the details, just report what you know.

Consider an example of a $5,000 back injury. A one-week delay in reporting it would, on average, increase the cost to $6,000; a two-week delay, to $7,000.

When your experience modifier is calculated, that additional cost goes right to the bottom line. So as the clock ticks, remember that it’s probably costing you money on this claim and on your later premiums.

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