What Are Considered the Primary Direct Costs for Workplace Accidents?
Anyone working within the mining, construction, or transportation industries can testify to the fact that these industries are especially prone to workplace accidents. While workplace accidents can be career and life-altering events for employees, employers should also consider the effects of such accidents from a business perspective. To accurately understand the financial impacts of workplace accidents, it is essential to understand what are considered the direct costs for workplace accidents?
The Direct Costs
Direct costs are any costs that are typically covered by workers’ compensation insurance and can be broken down into three categories: medical, indemnity, and program costs. From these three categories alone, the average direct cost of a workplace injury claim is $40,000. This figure is according to the National Council on Compensation Insurance (NCCI). “What are the direct costs for workplace accidents?” $40,000 according to the figure above, without even considering the indirect costs. These indirect costs include training replacement employees, lost productivity, repairs of damaged property, and accident investigation.
Medical
Direct medical costs typically consist of costs associated with hospital stays, physician treatment, medication, and physical therapy. Direct medical expenses alone cost employers more than $35.5 billion just in 2019, according to injuryfacts.nsc.
Indemnity
Indemnity expenses are the second direct costs that can have a devastating impact on businesses. Indemnity payments are typically monies paid on behalf of the insured during the judgment and settlement of the claim. These costs include disability compensation, dependent benefits, death benefits, settlements, legal expenses, and investigations. While these costs along with medical expenses can be insured, they tend to increase the employer’s premium.
Program
While insurance may cover a majority of the direct medical and indemnity costs, employers should not negate the effects that workplace injuries have on program costs. When a workplace injury occurs, employers may find themselves in a situation where they need to pay higher premiums, have claims administration expenses, and hard to predict surety & assessments fees.
What are the Effects of Workplace Accidents?
As we have seen by answering the question “what are the direct costs of workplace accidents” the effects of workplace accidents can have a significant impact on company finances. Employees can also experience life-altering changes. Injuries tend to create emotional strain both on the worker and their families. With the loss of wages comes increased stress at home. Excessive time away from work can also harm employees’ self-esteem and occasionally lead to mental health problems. Coworkers may be impacted as they witness a fellow employee endure a workplace injury.
The 5 Most Common Workplace Accidents
While many workplace accidents can be unavoidable, steps can be taken to mitigate the risks. To properly understand how to minimize the chances of accidents occurring, it is essential to understand the 5 most common workplace accidents.
1. Slips, Trips, and Falls
Approximately one-third of all personal injuries in the workplace result from slips, trips and falls. These types of accidents are also a top cause of worker’s compensation claims as they typically include neck, back, and head injuries.
2. Being Caught in Moving Machinery
One of the most traumatizing (and costly) workplace injuries results from body parts getting caught in or struck by exposed moving parts of machines without protective guards. Crushed hands and arms, severed fingers, and blindness are some of the most typical injuries employees face from this type of workplace accident.
3. Vehicle-related Accidents
Third on our list of workplace accidents is vehicle-related accidents. A high priority for those industries regulated by DOT, these accidents can include being struck or run over by a moving vehicle, falling from a moving vehicle, or being struck by objects falling from a vehicle.
4. Fire and Explosions
Faulty gas lines, improperly stored combustible materials, and open flames have devastating consequences as they can lead to explosions and fires within the workplace. While these types of accidents are the rarest on our list of workplace accidents, only accounting for about 3 percent of workplace injuries, they have the highest casualty rates.
5. Overexertion Injuries
Rounding out our list of 5 most common workplace accidents is complications due to musculoskeletal disorders. These disorders are something that employers must continually keep in mind as they are the costliest workplace injuries. Back pain alone cost employers more than 7 billion dollars last year, not to mention their contribution to the loss of productivity.
What Can You Do To Minimize The Risk Of Workplace Accidents?
While there is no way to eliminate the risk of workplace accidents, prioritizing knowledge of hazards and sharing best practices may reduce the number of incidents. If you want to create a culture of awareness and eliminate apathy towards safety, please contact one of our trainers today. We specialize in providing on-site and virtual training that meets all MSHA, OSHA, and DOT regulations. To get started, please fill out the form below, and a member of our team will be with you shortly.
