The Indirect Costs of Workplace Accidents

Melanie Baird
Claims Advocate

Accidents in the workplace are an unfortunate reality of the human element of business. Humans make mistakes, and occasionally these mistakes cause a workers’ compensation claim. The costs of these claims vary depending on the severity of the accident, and the more accidents that occur, the higher the cost.

There are two types of costs related to workplace accidents:

Direct costs:

  • Medical costs
  • Income benefits when the employee misses work due to a work-related accident

Indirect Costs:

  • On-site investigation of the accident
  • Down-time of equipment if repairs or clean-up are needed
  • Costs of replacing the injured worker – even if just temporarily
  • Spoilage
  • Delays in product being manufactured and delivered
  • Strained relationships with clientele
  • Increase in insurance premiums
  • Over all workforce perception (morale, absenteeism)

According to OSHA, the total cost of a fracture runs as high as $101,833.00 when all of the direct and indirect costs are taken into consideration and the average cost of a concussion, factoring in direct and indirect costs, is $127,617.00.

Here are a few ways these costs can be reduced :

  • A solid safety program (including a Fall Protection Plan)
  • Holding supervisors accountable
  • Employee engagement in safety (safety committees, safety incentive programs)
  • Continuing education in safety training

OSHA’s Safety Pays states, “A good safety and health program can save $4 to $6 for every $1 invested. That's because injuries and illnesses decline. Workers' compensation costs go down. Medical costs decrease. There are other, less quantifiable benefits as well - reduced absenteeism, lower turnover, higher productivity and increased morale.” 

How much could your company save in total direct and indirect costs simply by committing to safety as a core value in your company? To learn more about specific savings our clients are experiencing by building a strong safety culture, and how your company can do this too, contact us or post a comment below.