Effects of Accidents to a Company
Accidents happen, anywhere, anytime — at home, on the road, and even in the workplace —sometimes through no one’s fault. No matter how hard we try, we can’t eliminate the occurrence of an accident. A significant percentage of recorded accidents in the United States occur in a work environment.
The best we can do is reduce the risk of occurrence of an accident by taking the necessary measures which in the case of workplace mishaps, is to hire a safety professional to assess the work environment and point out a potentially dangerous workplace situation.
To Err Is Human
Getting your employees to adopt a safe attitude while performing their assigned tasks, keeping them sensitized on possible safety and health risks as well as how to control them can go a long way towards the creation of a highly productive work environment.
Helping your employees to adopt a proactive approach vis-à-vis a potentially dangerous work environment will also help you guard against complacency and take you a step closer towards creating a nearly accident-free workplace. Nevertheless, despite an employer’s best efforts and due to unforeseen circumstances and human error, workplace accidents will still occur and people will get injured.
What Does A Workplace Accident Mean For An Employer?
The effects of a workplace accident are catastrophic, to both the injured employee and the company itself. On one hand, you have an injured employee who will have to miss work for a couple of days, months or even longer due to some safety rules violations— which is the only side most people see when they hear about the occurrence of a workplace accident.
We have an employer faced by the financial pitfalls involving the immediate costs of treatment for the injured member of staff as well as productivity woes on the other hand, a situation that — in most cases — other parties fail to acknowledge.
The point is, accidents are a part of life, and this goes for workplace mishaps too. But to preserve smooth operations of the business and provide help to the injured employee, employers need to know how to deal with the aftermath of a workplace accident. Here are some of the negative impacts a workplace accident can have on the business.
The cost of a workplace accident is one of the major setbacks an employer has to deal with. According to the American Industrial Hygiene Association (AIHA), companies expend $170 billion a year on costs associated with occupational injuries and illnesses.
This is just but a tip of the iceberg, all related expenses considered, this figure could be much bigger. If as a business owner, you are not careful, these hidden costs can sink your company. The financial repercussions of an accident in the workplace can be categorized into direct and indirect costs.
When a member of staff sustains an injury or suffers an illness, the associated pain and suffering is compounded by the immediate cost of treating the injury or illness. These costs may present themselves in the form of hospital bills, medical equipment, occupational therapy, prescription medicine and so on, you name it. However, most of these direct costs are covered under the employee’s workers compensation policy.
5 Worst Indirect Costs of an accident in a company.
A workplace mishap that results in an employee injury is bound to have expenses that are absorbed into the operations. Experts point out that indirect costs can be three to four times the direct costs. Some of these costs include:
- The cost of recruiting, hiring, and training a temporary or permanent employee to replace the injured employee. Other employees may have to leave their responsibilities to perform the duties of the injured employee before the replacement is ready to step in.
- Decreased efficiency levels, reduced productivity, and lowered morale by supervisors and co-workers after the incident.
- Loss of employees’ time as they respond to the accident and get medical attention for their injured colleague.
- The cost of repairing the damage caused to the equipment — or car in the case of a road accident — during the mishap.
- Time the supervisor takes to create a report after the incident and communicate with loss control as well as the time it takes loss control to investigate the incidence and reach out to the insurance company.
There are many indirect costs associated with a work-related accident. These costs can be large enough to cripple the operations of the business. Ensuring excellent safety performance and compliance through safety inspections can help alleviate the financial burden that accompanies a work-related accident.
Legal Repercussions of Workplace Accidents.
The legal implication resulting from a work-related injury is perhaps the most catastrophic effects of a workplace accident. Acts construed to be of sheer negligence are the most disastrous, for example, if an employer doesn’t carry workers compensation insurance. This could result in a number of lawsuits from government agencies leading to massive settlement rulings that could leave the business bankrupt.
Workers compensation doesn’t cover all expenses, though. In some cases, it doesn’t cover some employees at all — independent contractors, for instance. Therefore, you may still have to part with a significant out of pocket amount even with the workers’ comp.
Companies base their operations on employee schedules. If an employee is injured, their tasks will be left incomplete unless another employee is called to fill in. The company may have to get a replacement if the employee is not able to attend other pre-scheduled shifts.
Productivity levels take a big hit if the injured employee has some sort of specialized skill or many years of experience in his/her department. Production might have to stop temporary — until someone else is trained — if no other employee possesses this skill.
Though the probability of a workplace injury causing a company to go out of business is low, it’s a possibility, especially if the accident was a result of negligence on the part of the employer. A little preparedness can help a company avoid such situations.
OSHA requires employers to provide protective equipment — helmets, protective clothing, gloves, etc. — for their employees. Wearing OSHA protective clothing can help reduce chances of injury in case of an accident. Click here for OSHA PPE FACTSHEET PDF