How Much Does a Workplace Accident Cost You?

Workplace injuries and accidents that cause employees to miss six or more days of work cost U.S. employers $59.9 billion in 2014, the most recent year for which statistically valid injury data are available from the U.S. Bureau of Labor Statistics (BLS). 

How can a workplace accident affect your company?

Let’s break it down by direct and indirect cost to understand the total.

Direct Costs

  • Medical
  • Hospital and rehabilitation expenses
  • Workers compensation payments and/or disability insurance
  • Higher insurance premiums or even loss of insurability

Indirect Costs

According to the National Safety Council, Injury Facts 2014 Edition, numerous studies have shown that $1.00 invested in injury prevention returns between $2.00 and $6.00. Indirect costs include:

  • Training and compensating replacement workers
  • Repairing damaged property or quality disruptions
  • Accident investigation and implementation of corrective action
  • Scheduling delays and lost productivity
  • Administrative expense
  • Low employee morale and increased absenteeism
  • Poor customer and community relations
  • Paperwork and administrative time
  • Legal issues

How can an accident affect your injured employee?

Employees who are involved in a workplace accident could face potential emotional, physical, and financial difficulties. Once they return, there is a risk for underperformance and a decrease in their ability to perform tasks.

The cost.

A single fatal workplace injury goes from costing an average of $1.42 million to costing nearly $3 million on average.

In the 2017 Liberty Mutual Workplace Safety Index 2016 report shows:

  • The total cost of all disabling workplace injuries fell to $59.9 billion in 2017, from $61.9 billion in 2016. 
  • The share of the top 10 causes of serious workplace accidents in the cost of all disabling workplace accidents grew in 2017 to 83.4 percent, from 82.5 percent in 2016. 
  • Falls on same level and roadway incidents continued to trend upward, and overexertion decreased substantially.

How do companies pay for this?

Most individuals believe that organizations have money set aside to pay for accident costs but employers actually use the money from profits. Insurance, however, covers a portion of the total accident cost. Moreover, as accident losses increase, so will a company’s insurance premiums. It is clear that directly and indirectly, accidents reduce profitability.

Benefits of investing in safety?

The most important reason to invest in safety is so workers do not get hurt.  But the financial return on investment – increased productivity, improved customer service, money savings from fewer injuries – is another major benefit.

Give us a call today if you are looking to evaluate your company’s safety.

Jim DePew
Vice President & Consultant
Mobile: (330) 631-9022
Office: (330) 915-2355 Ext: 103
Email: [email protected]