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EHS INSIDER

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MEASURING THE HIDDEN COSTS OF INJURY

It's easy to assume that the cost of an injury is merely the worker's compensation premiums you pay. Every organization paying compensation insurance premiums recognizes such expense as part of the cost of injury. In some cases, medical expenses also can be covered by insurance. These costs are definite and known.

But injuries can result in hidden costs you may not have taken into account. These costs can include the following:

  • Uninsured medical costs covered
  • Lost efficiency due to interrupted schedule
  • Failure to fulfill customer commitments
  • Reduced competitiveness
  • Additional overhead costs while work is disrupted
  • Cost of overtime
  • Cost of temporary employees
  • Cost of training new or temporary employees
  • Cost of wages paid to supervisors for time spent on investigations
  • Time lost from work by injured employees
  • Lost time by workers other than those injured but who were directly or indirectly involved in injuries
  • Lowered employee morale
  • Employees' loss of earning power
  • Economic loss to injured employees' families
  • Cost of additional wages caused by decreased output by injured workers after returning to work

Other hidden costs

Looking beyond the cost of the actual injury, other costs must be considered such as the cost of failing to meet standards governed by law. Some of these costs can be quite expensive.

The Occupational Safety and Health Act of 1970 requires the government to cite companies for unsafe work practice violations and to propose financial penalties. These penalties range from $7,000 for violations that probably would not cause death or serious physical harm to $70,000 for violations committed intentionally.

In addition to such citations and penalties, the U.S. Department of Justice can bring a criminal action against an employer who willfully violates a standard that results in the death of an employee. A criminal conviction can result in a fine of up to $250,000 for an individual or $500,000 for a corporation.

Excerpted from the new book, "Beyond Worker's Comp-A Human Resources Guide to Building Safety Into Your Organization," published by NSC Press. For information about ordering the book, call (630) 775-2075.

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