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Out of 100 full-time workers, a little over three will be hurt in a workplace accident or will fall ill because of conditions on the job. When someone gets sick or hurt at work and can no longer perform their duties, your business loses out. However, that’s not the only cost that you will pay as an employer.

The Astounding Price You Will Pay

Each week that your employee is out of work, you will pay for a lot more than the cost of lost productivity. Your costs will include workers compensation insurance payments, legal services and medical expenses.

Even the simplest injury can put a tremendous cost burden on your business. Let’s take a simple broken bone as an example if your company makes a 5 percent profit. Using an OSHA calculator, the estimated direct and indirect costs came to $79,613. With that 5 percent profit margin, you would have to generate sales of $1,592,260 to cover the costs.

Indirect Costs

When an employee is on medical leave due to injury or illness, it can feel as if your entire workplace is in chaos. You may need to pay other employees to come in for overtime. Tasks that the injured employee may have excelled at are now in the hands of one or more of his or her comrades who may need detailed training. That takes someone’s time not only for instruction but for follow-up.

At the same time, you or your staff may need to devote your energies to investigating the accident or repairing any equipment that was damaged. You might even need to also deal with lower morale among your workers and perhaps strong emotions such as anger and feelings of betrayal.

Finally and perhaps most disturbing of all, your reputation among your employees and in the community at large may have taken a hit that it will take years to recover from. Although some of these costs are hard to quantify, they can exact a significant toll on your company.

The Costs of Addressing a Filed Claim

It can be a time-consuming and upsetting experience when an employee files a workers compensation insurance claim against you. This is particularly true if this is your first. You may not have realized just how complicated and time-consuming these claims can be, especially if you are trying to handle it on your own. The process involves gathering a great deal of information about your employee, their wages and your safety protocols.

Only after retrieving these data can you file a report with OSHA, who will then conduct an investigation. No doubt, this is a stressful experience that will cost you not only time and money but probably sleep as well.

As you can see, injuries or illnesses on the job can have a devastating, widespread and costly effect on your employees, their work output and your pocketbook. One of the best ways to combat the direct and indirect costs of workers compensation insurance claims is to do all you can to prevent them from occurring.

Take time to develop airtight safety protocols and training procedures, and practice them regularly with your staff. Although they will not prevent 100 percent of the accidents, injuries or illnesses, they will go a long way toward making your job site safer and your employees happier.

 

Take time to develop airtight safety protocols and training procedures, and practice them regularly with your staff. Although they will not prevent 100 percent of the accidents, injuries or illnesses, they will go a long way toward making your job site safer and your employees happier.