Safety in Numbers
Workplace injuries don’t make headlines despite the fact they cost about $1 billion a week in wage and medical payments alone. The true total annual cost of on-the-job injuries is $146.6 billion, or $1,060 per worker, according to the National Safety Council. Even as the number of injuries declines (injuries fell 7.8 percent between 1998 and 2002), the costs continue to go up, due in large measure to medical and wage inflation. According to Liberty Mutual, the cost of serious on-the-job injuries–those causing an employee to miss six or more days of work–rose about 12 percent from 1988 to 2002, with half of that increase coming in 2002.
The good news is that while employers may not be able to control inflation, they are not powerless to prevent injuries or contain workers’ compensation costs. It all begins with the right information, which can be found in the Liberty Mutual Workplace Safety Index. This index ranks the top nine causes of workplace injuries. The top causes have been the same for the past four years, which the insurer’s researchers say gives risk managers a clear roadmap.
“If you want to dramatically cut workers’ compensation costs, follow the numbers not the headlines,” notes Dr. Tom Leamon, director of the Liberty Mutual Research Institute for Safety. The top three injury causes (overexertion, falls on same level and bodily reaction) represent 50 percent of the total cost of serious workplace injuries, or about $25 billion a year. That’s about $500 million a week. They are also the fastest growing.
Armed with information including the top causes of injuries, risk managers can improve safety every day and many do. The businesses that succeed in controlling injuries have more than information; they have a plan. According to Liberty Mutual’s Leamon, the plans that have the greatest impact share five key steps: 1. Identify the injuries that drive up workers’ compensation costs in the particular business, using the Liberty Mutual Safety Index as a starting point. 2. Prioritize the ones that the company should address. 3. Set clear targets for reducing each injury. 4. Put in place the tactics and training that will prevent these injuries. 5. Regularly track performance and update the plan.
Insurance agents are frequently asked what added value they bring to the insurance transaction. For many employers, their insurance agent is their only safety advocate.