One of the best arguments as to the importance of safety to a business/organization is the cost or worker’s comp.  I recently came across this article be Bill Reynolds who has a website where you can estimate the true cost of your company’s worker comp cost.  I hope you find this article as interesting as I did and it helps you with your fight to keep safety a top priority.

A worker injury not only creates a workers compensation insurance claim. It immediately creates financial waste throughout your organization. As an example, according to OSHA, for every $1 of medical only claims your organization sustains $4.5 in indirect, uninsured costs. At first blush you would think that this is a small number. In fact, it is like bleeding a slow death.

Let’s assume that your organization averages 20 medical only claims a year and that every medical only claim pays workers compensation benefits of $550. This means that your workers compensation adjuster is paying $11,000 a year. However, using the OSHA estimate of indirect costs, your organization also incurs $49,500. This reflects the financial waste and inefficiency throughout your organization. As a result, these 20 medical only claims actually cost your organization $60,500. Assuming a 5% pre-tax profit, this also means that your organization must sell $1,210,000 each year to pay the total cost of these 20 medical only claims. How many employees must you hire to produce goods and services to generate these sales?

Workers compensation disability claims produce more amazing results. According to OSHA, for every $1 of workers compensation disability payments the organization insures between $2 and $10 of uninsured, indirect costs. To be conservative let’s assume that the ration is 2:1. Also, let’s assume that your organization has 10 workers compensation disability claims and each averages $12,500. Your workers compensation adjuster would pay $125,000 for these workers compensation claims. Also, using the conservative OSHA ration of 2:1 your organization would also sustain $250,000 in indirect, uninsured costs. This additional cost reflects the waste and inefficiency throughout your organization. Again assuming a 5% pre-tax profit, the total cost of these disability injuries ($375,000) requires your organization to generate $9,375,000 in sales to pay for these 10 workers compensation disability injuries. Again, how many employees must you hire to produce goods and services to generate these sales?

I invite you to take five minutes to estimate your TOTAL COST of worker injuries using OSHA estimates in the privacy of your office. It is on-line and available 24-7. To find out more go to These resources also include injury prevention, OSHA compliance, safety training, prompt injury response, workers compensation disability management, plus more. These resources are available 24/7 and used irrespective of which workers compensation carrier you select. Its patent-pending technology also provides unique financial reports for monitoring the effectiveness of your safety and health program on an on-going basis.