Think You’re Too Big to Worry About Frequency? Think Again

When a large company faces a single catastrophic injury, it grabs attention—and rightly so. These severe losses can be emotionally and financially draining. But while it’s easy to focus on the big-ticket claims, there’s another quieter, often underestimated threat driving up workers’ comp costs: frequency.

Yes, even for large organizations with higher premiums and broader resources, frequent small claims can erode your experience modification factor (mod), damage safety culture, and inflate your total cost of risk.

Let’s unpack why frequency still matters, and what large employers need to do about it.

Frequency vs. Severity: The Common Assumption

There’s a widely held belief that once an organization reaches a certain size—measured by total payroll or premium—claim severity becomes the dominant factor in experience mod calculation, while frequency fades in importance.

There’s some truth to that. The larger the organization:

• The higher the expected losses used in the mod formula

• The more stable the mod becomes year over year

• The less influence individual claims have on the overall mod

However, this doesn’t mean frequency stops mattering.

In fact, high frequency is often a red flag for underwriters, safety consultants, and rating bureaus—even when claims are minor or medical-only.

How the Mod Formula Still Penalizes Frequency

At the heart of the mod calculation is the concept of primary vs. excess losses. Here’s what that means:

• Primary losses are the first portion of every claim—currently up to $17,000 in most states.

• Excess losses are the amounts beyond that.

Primary losses are given much more weight in the formula because they’re seen as more predictive of future performance.

So, for example:

• Ten $15,000 claims will generate $150,000 in primary losses.

• One $150,000 claim will result in only $17,000 in primary losses (the rest is excess).

Even if your company has high expected losses, multiple small or mid-size claims still stack up significantly in the primary loss category, making your mod rise faster than you might expect.

Why Frequency Still Hurts Big Employers

Even with smoothing effects and greater claim dilution, frequency can still cause serious problems:

1. It Signals a Broken Safety Culture

Frequent claims suggest:

• Gaps in training

• Inconsistent hazard recognition

• Poor accountability

This tells underwriters your loss potential remains high—regardless of severity.

2. It Increases Administrative Burden

Managing dozens of minor claims can consume more time and resources than handling one large event. This strains HR, safety, and risk management teams.

3. It Raises Your Mod from the Bottom Up

Large organizations often benefit from lower minimum mods, but frequency can keep you far above that baseline. The controllable portion of the mod—the area you can actually improve—gets eaten up by preventable minor claims.

4. It Attracts Regulatory Scrutiny

High frequency rates can trigger attention from OSHA and state regulators. More recordables, more reports, more inspections.

Why Frequency Can Be Easier to Fix Than Severity

Here’s the good news: Frequency is often more controllable than severity.

• You can’t always prevent a catastrophic event.

• But you can reduce slip and fall incidents, cuts, strains, and lifting injuries.

Most high-frequency injuries are low-complexity and predictable:

• Same job tasks

• Same equipment

• Same departments

That means they’re easier to identify, analyze, and eliminate through engineering controls, behavior-based safety, and better ergonomics.

Best Practices to Control Claim Frequency

✅ Target the root causes
Use incident investigations and trend analysis—not just to assign blame, but to uncover systemic issues driving repeated injuries.

✅ Prioritize training and reinforcement
Ensure employees are properly trained and re-trained, especially in high-frequency departments or roles.

✅ Use injury triage to avoid unnecessary claims
Many minor injuries don’t require a formal claim. Nurse triage can help route employees to self-care when appropriate, keeping non-claim incidents off your record.

✅ Invest in return-to-work to preserve medical-only status
Even a single day of lost time turns a medical-only claim into a lost-time claim, with full mod impact. Keep employees working—safely and productively.

✅ Celebrate safety wins, not just big milestones
Reinforce positive behaviors and reward near-miss reporting, proactive housekeeping, and peer-to-peer accountability.

Don’t Ignore the Small Stuff

For large employers, it’s tempting to dismiss minor claims as a cost of doing business. After all, what’s a $1,000 strain injury to a company spending millions in payroll?

But when those small claims happen again and again, the financial and cultural consequences add up.

• Your mod inches up.

• Your premiums climb higher than they should.

• Your employees get the message that injuries are “normal.”

Instead, shift the narrative: every injury matters. Not just because of cost, but because it reflects the kind of workplace you’re running—and the kind of company you want to be.

Final Thoughts

Yes, large companies are somewhat insulated from wild mod swings. But they’re not immune to the impact of frequent claims. In fact, frequency can quietly chip away at mod performance, insurance relationships, and internal safety culture if left unchecked.

The opportunity lies in being proactive:

• Track your small claims as closely as the large ones.

• Look for clusters, trends, and repeat exposures.

• Set frequency reduction as a goal—not just severity prevention.

Because in workers’ comp, it’s often the little things that cost the most in the long run.

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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