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The true costs of a work-related injury

Thursday, November 1, 2018 - 07:00
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Administrative overhead — A workplace injury triggers an avalanche of paperwork related to incident reporting, insurance claims, etc. This ties up resources on the part of administrative staff, who could otherwise be using their time to help generate revenue for the company.

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Insurance cost increases — While the direct costs of a workplace injury are often covered by Workers Compensation, the claim will likely result in increased premiums. Workers Compensation premiums are typically based on a national survey that assesses the risk associated with the job duties of the employee. However, they can adjust up or down depending on a number of factors related to the business being covered. If the business takes steps to reduce the risk to its workers, the premiums may be reduced. However, injuries and associated claims will cause them to increase in a big way. To make matters worse, a premium increase will typically remain in effect for three years after the claim.

Increased regulatory oversight — Depending on the severity of the incident, regulatory agencies such as OSHA (Occupational Safety and Health Administration) could conduct an investigation on your premises. Citations and fines can be the result, and repeat visits are a possibility if the inspectors think your business could be a trouble spot.

Loss of competitive ability — Any increase in overhead expenses for a company will reduce its ability to compete.  In some cases, a poor safety record can cause a business to be disqualified from bidding for contracts with state and federal agencies, as well as many private concerns.

Erosion of company image — Workplace injuries and the associated bad press can make consumers think twice about purchasing products or services from your company. This can also make it more difficult to recruit new employees because people don’t want to work for a company that has a poor safety record.

Adding it all up, the indirect costs of a workplace injury can be harmful for any company, but will have an even harsher impact on small businesses. Conservative estimates place the indirect costs of an injury at up to 4.5 times that of the direct costs. The crushing financial impact of a workplace injury clearly shows that investments in safety can pay back in very short order.

Societal attitudes

There are still many folks who believe that if you’re working the way you should be, then it is reasonable to expect that you’ll get hurt from time to time. A really good example of this is the condition of a workman’s hands. Lots of people won’t believe that you work as an automotive technician unless your hands are torn up. In fact, you may be made to feel that you are either lying or you’re a complete slacker if you don’t have cracked nails, swollen knuckles, or even missing parts of fingers. These attitudes are an indicator that society hasn’t fully embraced the notion that all injuries are preventable, and that we shouldn’t be making peace with anyone getting hurt on the job.

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