This article is sponsored by AmTrust.
As federal OSHA budgets tighten and the agency pivots toward compliance assistance and modernization, insurers find themselves re-evaluating how workplace safety enforcement, and its perceived absence, will ultimately influence workers’ compensation (WC) pricing and risk exposure.
Speaking to IB, Matthew Zender (pictured), senior vice president of workers’ comp strategy at AmTrust Financial Services, explained that the end of the cuts means a shift towards compliance assistance and modernization, as opposed to outright enforcement.
“If you're looking at high-risk industries, they will feel the most impact from this, in my opinion,” he told IB.
And while Zender is quick to emphasize that these cuts do not signal diminished OSHA relevance, the shift nevertheless introduces complexity.
“It’s intended to change the impact of OSHA,” added Zender. “Whether they have the impact that it's intended is unknown, of course. Anytime you exact cuts like this, how it is actually going to work out is a guess - although an educated one.”
Following this, Zender explained that he’s seen a clear redistribution of responsibility, and it’s twofold.
“They’re looking to move some of that function down to the states where they may be a little bit closer to the business owners,” he said. “I also think they’re expecting that the carriers need to take more of an active role too.”
In other words, insurers are no longer just risk underwriters; they’re becoming co-architects of workplace safety strategies.
“You could look at how they’re changing the penalties for failing to comply - specifically for small businesses,” he said. “Penalties for failure to comply are $16,550 for a serious offense and $165,500 for a wilful offense, however those can be reduced if you're a small business by up to 70%. And that’s historically been defined as less than 15 employees but they’re now looking to move that to less than 25 employees.”
With enforcement deemphasized, Zender asked a crucial question - how much does enforcement really move the needle versus how much does compliance and managing compliance help to address the safety of a small business?
And, from there, what happens to Workers’ Comp premiums in this evolving landscape? According to Zender, the answer lies in behavior rather than regulation.
“I don’t think they’re going to lead to claims denials, per se. Will they lead to increased work comp premiums? It’s possible,” he added. “If the overall effectiveness of this program... ultimately leads to loss costs that are greater for the industry, well then, of course there’ll be premium increases. I think it’s clear the intent of this is not to have people work less safely. They’re just trying to displace the impact and use it in a different manner.”
This nuance highlights a vital consideration - OSHA’s regulations are, and always have been, the minimum bar.
“If you are only complying with OSHA standards, you have some work to do,” Zender warned.
With OSHA’s field presence constrained, Zender went on to urge businesses, especially small ones, to leverage alternative support channels.
“It was estimated in 1991 that it would take inspectors 84 years to look at every US business,” he said. “With current staffing levels, it would take them 185 years to do that, and the proposed cuts would take that to 266 years. It’s unreasonable, both then and now, to expect that an inspector is going to have a physical presence.”
In light of this, proactive measures become essential.
“Lean into other resources that are available,” warned Zender. “I wouldn’t suggest that anybody should ever rely on OSHA as all that they need to do.”
AmTrust, the largest WC insurer for small businesses, is responding accordingly. “We put many of our resources in the public domain, whether you’re an AmTrust insured or not,” Zender said. “They can help maintain some of the standards that we’ve talked about... and exceed any of those minimum standards.”
From OSHA 10- and 30-hour compliance guides to custom-tailored safety programs, insurers like AmTrust are becoming safety partners, not just policy providers.
Zender also offers a sobering look at the long-term reputational consequences businesses might face if incidents rise under a lighter enforcement framework.
“If you go back to the beginning of workers’ compensation and the grand bargain... we removed the tort effect and replaced it with a no-fault standard,” he said. “There are responsibilities on both sides. If this does result in greater workplace incidences, then I could see there being pressure to do something different.
“There were 5,300 deaths per BLS in 2023. If that number were to grow... or if we were to see other material erosion of the safety standards that we've collectively achieved...I do think there would be some reputational risk associated with that.”
So what can businesses do in the face of diluted oversight? Well, at AmTrust they have a number of those resources available, ones specifically tailored to small businesses too. And they’re all on the public domain too.
“Whether you're an interested insured or not, we’re happy to make these tools and resources available,” said Zender. “They can help maintain some of the standards that we've talked about -and provide guidance as to how to improve and exceed any of those minimum standards.”
