Mental health is becoming a leading workplace safety risk, overtaking physical injuries like slips, trips, and falls, according to data from Pie Insurance.
For small and medium-sized enterprises (SMEs), the rising tide of mental health-related claims poses a unique challenge, especially given their limited resources compared to large corporations.
Carla Woodard (pictured), senior vice president of claims at Pie Insurance, has closely studied the trend and said the surge itself isn’t unexpected. “The trend is not surprising,” she told Insurance Business. “What was a pleasant surprise to us was the growing awareness that small business owners have of this particular risk.”
That awareness is critical. For years, physical safety dominated the conversation around workplace risk. Now, businesses are being forced to look at employees’ mental as well as physical well-being.
"Mental health is part of our overall health. So, when we think about workplace safety and we think about employees, we have to think of them holistically," Woodard said.
Pie Insurance analyzed data from over 1,000 small business owners and decision-makers in the US, uncovering how businesses are responding to shifts in workplace safety trends, including rising mental health challenges, preventable injuries, employee resistance, and the accelerating adoption of AI-powered safety technology.
Their data showed 75% of SMEs experienced workplace injuries in the past year, with the most common injuries being mental health-related injuries (22%); slips, trips, and falls (20%); cuts, lacerations, and punctures (18%); and overexertion and repetitive strain injuries (13%).
Additionally, nearly half (46%) of small businesses view mental health as the greatest safety risk in their workforce.
Workplace mental health claims often stem from chronic stress, burnout, and fatigue. These are exacerbated by poor work-life balance, excessive workloads, or lack of support. But not all cases are slow burns; some arise from specific incidents that leave psychological trauma, according to Woodard.
"There could be specific incidents that occur that could be traumatic, where perhaps employees witness the accidents that occur either with their colleagues or for themselves,” she said.
Despite the complexity of mental health issues, many businesses believe they are handling them well. According to recent data, 91% of employers say they feel confident managing mental health risks.
But that confidence isn’t always backed by action. Pie Insurance found that less than half of these employers have risk mitigation strategies in place. Woodard views this disconnect as a gap that insurance carriers, brokers, and agents can help fill.
“It’s a huge challenge. Small businesses often don’t have a dedicated HR team. The owner might be a team of one, managing HR, payroll, operations, everything,” said Woodard. “We want to arm them with information and easily accessible resources, because they may not have the budget or headcount to support formalized programs.”
Employee assistance programs (EAPs), mental health training for leaders, or accessible stress management tools are some of the elements of a robust mental health plan in the workplace, according to Woodard.
But creating a supportive culture also matters. Employers should be observant, proactive, and trained to identify early signs of distress. “Do they have a culture where their employees feel comfortable and open in discussing times of high stress?” Woodard said. “Do they have leaders that they can speak with? Do they have outlets?”
There are structural and cultural gaps that SMEs need to address. But beyond that, many are also challenged by the nature of their operations.
Unlike office-based companies, many small businesses have staff working in the field, often without regular contact with leadership. Maintaining communication in such environments is crucial, said Woodard.
“Fostering an open and communicative culture helps business owners stay in touch with what employees are going through,” she said.
