Whether you’re an employer, broker, claims manager, or vendor, understanding the real cost of lag time—and implementing systems to reduce it—can drastically lower claim costs and improve outcomes for injured workers. Here’s what you need to know.
What Is Lag Time?
Lag time is defined as the period between the occurrence of a workplace injury and the point at which the claim is reported to the carrier or TPA.
While it might not seem like a major concern, this delay can have cascading effects on every aspect of the claim. A lag of even a few days can be the difference between a routine medical-only claim and a costly, litigated, long-term disability file.
Why Lag Time Matters So Much
1. Higher Claim Costs
A study by The Hartford analyzed over 50,000 claims and found that:
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Claims reported after two weeks were 18% more expensive than those reported within one week.
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After three weeks, costs increased by 29%.
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Beyond four weeks, claim costs jumped 31%.
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And claims reported five weeks or later were a staggering 45% more expensive than early-reported claims.
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Why such a dramatic difference? Delays often lead to:
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Worsening of untreated injuries
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Miscommunication or memory gaps in witness reports
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Disengaged employees who feel unsupported
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Increased likelihood of litigation
2. Increased Litigation Risk
The National Council on Compensation Insurance (NCCI) found that as lag time increases, so does the rate of attorney involvement:
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Claims reported immediately had a 12.8% litigation rate.
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Just one week of delay raised the litigation rate to 15.7%.
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At four or more weeks, that number rose to 23.9%, an increase of 48%.
Litigation adds cost, time, friction, and often deteriorates the employer-employee relationship. A faster reporting process directly correlates with reduced legal involvement.
The Human Side of Lag Time
Injured workers are often scared, confused, and uncertain about what happens next. If they don’t hear from anyone promptly—especially within the first 24 hours—they begin to feel neglected or mistrusted. This breakdown in trust fuels frustration, disengagement, and attorney involvement.
Lag time isn’t just about dollars—it’s about human nature. When employees feel cared for and supported immediately, outcomes improve across the board.
Why Lag Time Still Happens
Despite all this evidence, lag time remains a common problem in many organizations. Here’s why:
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No formal reporting process exists, so supervisors delay filing.
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Supervisors aren’t trained in how or when to report.
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Fear or mistrust: Employees may be discouraged from reporting injuries or unsure of how the process works.
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Paper-based forms and manual workflows slow down communication.
The good news? All of these challenges can be solved with relatively simple fixes.
What You Can Do About It
1. Set a Clear Goal
The gold standard for reporting an injury should be within 10 minutes. That might sound aggressive, but it’s achievable with the right tools and culture.
If 10 minutes isn’t realistic for your organization yet, within 24 hours should be your hard upper limit.
2. Train Supervisors Thoroughly
Supervisors are usually the first people to learn about an injury. Train them not just on how to report it, but why early reporting matters. Help them understand:
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The cost implications
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How delay hurts the injured worker
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The employer’s responsibilities under the Grand Bargain
This kind of buy-in leads to action.
3. Use Injury Triage Services
Injury triage is one of the most effective ways to reduce lag time. With a 24/7 hotline, employees and supervisors can immediately speak with a nurse or trained medical professional to:
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Assess the injury
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Direct to appropriate care (clinic, ER, or self-care)
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Initiate claim documentation automatically
This eliminates guesswork and streamlines the reporting process in real time.
4. Automate the Reporting Process
Manual systems are one of the biggest culprits of delay. Employers should move toward digital injury reporting forms and real-time notifications to TPAs, carriers, and internal stakeholders. A centralized system ensures nothing falls through the cracks.
5. Monitor and Track Lag Time Data
What gets measured gets managed. Start by auditing your own lag time:
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What is your average time-to-report?
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How many claims are reported within 24 hours? 3 days? 7 days?
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Which departments or locations are lagging behind?
Use this data to provide feedback and set improvement targets.
Final Thoughts: A Simple Fix With Big Impact
Of all the strategies for reducing workers’ comp costs and improving injured worker outcomes, reducing lag time might be the most straightforward—and most overlooked. It doesn’t require a major budget overhaul or complex policy changes. It just takes structure, training, and commitment.
Start by shifting your mindset: lag time is not just an administrative delay—it’s a leading indicator of how seriously you take injury prevention, employee care, and cost control.
The sooner you respond, the faster employees heal, the fewer dollars you spend, and the more trust you build.
Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.
Contact: mstack@reduceyourworkerscomp.com.
Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/
Injury Management Results (IMR) Software: https://imrsoftware.com/
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