Asch Workers' Comp StrategyNew York employers received significant good news with the announcement that workers’ compensation insurance premium rates for insured employers are expected to decline by an average of 22 percent, effective October 1, 2026. According to Governor Kathy Hochul’s office, the reduction is projected to save New York businesses more than $1 billion statewide, averaging approximately $1,779 per policyholder.
The reduction, approved by the New York State Department of Financial Services, continues a multi-year trend of declining workers’ compensation rates in New York. Since 2020, approved rate decreases have averaged 10.3 percent annually.
For employers, particularly those in industries with significant workers’ compensation exposure, this is welcome news. But lower statewide rates should not be mistaken for a reason to become less vigilant about workers’ compensation costs.
An employer's actual workers’ compensation costs are affected by more than statewide insurance rates. Claims frequency and severity, payroll, industry classification, loss history, experience modification and the effectiveness of claims management can all affect what an individual employer ultimately pays.
A business with poorly controlled claims may therefore continue to experience significant workers’ compensation costs even in a declining-rate environment.
The announced reduction highlights something employers should already recognize: preventing injuries and controlling claims can have measurable financial consequences.
New York State has attributed part of the downward trend in workers’ compensation costs to a decline in the frequency of lost-time claims and increased attention to workplace safety. For employers, this reinforces the importance of viewing safety and claims management as connected components of an overall workers’ compensation strategy.
A reduction in insurance rates does not change what happens when an accident occurs.
Employers should have procedures in place to ensure that workplace incidents are reported promptly, witnesses are identified, relevant photographs or video are preserved, accident locations are examined and the circumstances surrounding the incident are documented while memories are fresh.
Early investigation can become particularly important when questions later arise concerning how an accident occurred, whether the alleged mechanism of injury is consistent with the conditions reported, or whether additional injuries are claimed weeks or months after the original event.
The opportunity to conduct an effective investigation can disappear quickly. Surveillance footage may be overwritten. Witnesses may become unavailable. Physical conditions may change. An employer that waits until a claim becomes complicated may find that important evidence no longer exists.
Employers should also continue to review their existing workers’ compensation claims.
Long-running claims can create substantial costs, particularly when questions involving disability, return to work, medical treatment or permanency are not addressed promptly. Employers and carriers should periodically evaluate whether the medical evidence accurately reflects the claimant's current condition and functional capacity and whether appropriate investigative or medical resources should be considered.
Depending upon the circumstances of an individual claim, that may include an independent medical examination, investigation, surveillance, nurse case management or a closer review of medical and employment records.
The objective is not simply to challenge claims. Effective claims management means identifying the issues that are actually driving a claim and determining what steps may appropriately move it toward resolution.
The reported decline in lost-time claims demonstrates the potential value of accident prevention. For employers, however, an effective workers’ compensation program requires attention to both sides of the equation.
The first is prevention: identifying hazards, improving workplace practices and reducing the likelihood that accidents will occur.
The second is response: having an effective system in place when an accident does occur.
Even employers with strong safety programs will have claims. The difference is often how prepared they are to respond.
Employers should know who is responsible for investigating an accident, who communicates with the carrier or third-party administrator, how evidence is preserved, how potential return-to-work opportunities are evaluated and when a claim requires additional strategic attention.
The New York State Insurance Fund has separately reported distributing more than $700 million to policyholders during the past year through dividend and discount programs. According to the State, this included approximately $698 million in dividends and discounts to more than 100,000 employers participating in workers’ compensation safety groups, as well as additional dividends associated with disability benefits coverage.
These programs further demonstrate the potential financial connection between workplace safety, loss experience and insurance costs.
For employers, the broader lesson is that workers’ compensation should not be viewed solely as a fixed insurance expense. The way a company approaches workplace safety, accident investigation and claims management can have long-term financial implications.
A 22 percent average reduction in workers’ compensation premium rates is unquestionably positive for New York businesses. It also creates an opportunity for employers to examine whether they are doing everything possible to control the portion of their workers’ compensation costs that they can influence.
Are accidents investigated immediately?
Is potentially relevant video preserved?
Are witnesses interviewed?
Are significant claims periodically reviewed?
Are return-to-work opportunities being considered?
Are medical developments being monitored?
Are recurring accident patterns being identified and addressed?
Lower statewide insurance rates can provide immediate financial relief. A disciplined approach to safety and claims management can help employers pursue savings that extend well beyond a single year's rate reduction.
Lower workers’ compensation rates are good news, but the greatest opportunity for employers may be in the costs they can control. Asch Workers’ Comp Strategy works alongside employers, carriers and their existing professional teams with fractional services to help identify workers’ compensation risks, strengthen accident response and investigation, and develop strategies for managing complex or costly claims. Whether the challenge involves a single significant claim or broader concerns about an employer's workers’ compensation program, AWCS provides experienced, fractional support when and where it is needed—without replacing or superseding existing staff, insurance professionals or legal counsel.
Is your workers’ compensation program taking full advantage of opportunities to reduce risk and control costs? Contact Asch Workers’ Comp Strategy to schedule a confidential consultation and discuss where a more strategic approach could make a difference.