Workers comp insurance only pays direct costs, which include medical bills, a percentage of lost wages, maybe some travel expenses, and prescription costs. It does not cover the indirect costs.
Here are examples of how it can really impact a business: Production suffers, people want to see what happened, want to help. There may be a need to clean up after an accident, this could temporally shutdown an area of the building. Lost worker? This one can get tricky. You may be forced to train a new person, hire a temp, or steal someone from another department. Quality suffers, customer relations suffer, and the sales department has to work harder. See where we are going? This could go on and on.
In talking with a very large company, they determined their indirect costs are equal to three to five times the cost of the original accident! They shelled out over $423,423.00 in workers-comp costs last year. This is not what the insurance paid; this is what the company paid. Let’s split the difference and go with four times that amount, which is $1,693,692. That was their approximate indirect cost! Add that to the medical: $2,117,115.00! That’s a massive amount of money spent for something so preventable.
Emphasize to your team to slow down and take care of themselves. If they don’t, they’re taking money out of the company’s pocket, and if you do profit-sharing, their pockets.