Uninsured Costs Of Workplace Accidents – Workplace accidents are common and can happen to anyone, which means it’s vital to have insurance to cover the costs of any injuries or other damages you or your company might face. However, did you know that there are costs of workplace accidents that are often not covered by workers’ compensation insurance? Each state has different laws and regulations, but these uninsured costs of workplace accidents will be important wherever you live, so make sure you’re aware of all possible consequences before someone gets hurt at work. Here are seven (7) uninsured costs of workplace accidents you may not know about.
NOTE: Uninsured cost are also said to be indirect cost of workplace accident.
Loss of Production Time Due To Damaged Equipment
The first uninsured cost of workplace accident we will be considering is – Loss of Production Time Due To Equipment Damage.
If you experience a workplace accident and are unable to work for an extended period of time, then you will not be able to generate an income, which could lead to unpaid bills and other issues. One major uninsured cost is loss of production time due to damaged equipment. Damaged equipment usually results from accidents in manufacturing facilities, construction sites, warehouses, truck yards, offices or any other place where heavy machinery is being used.
Not only will it take longer to complete your tasks, but you’ll need to find new ways to cope with your damaged equipment. In some cases, you may need to buy new equipment in order to get back on track and complete your project on time.
As long as the equipment is damaged due to workplace accident, production time will increase leading in ability to meet up with order delivery time.
Another uninsured cost of workplace accident is productivity loss. This may be due to employee absenteeism and lowered work performance after an accident. For example, according to a 2008 study by Boston University School of Public Health, firms that experience occupational injuries result in the average productivity loss of between $1.5 million and $2.3 million. Lost productivity comes with greater costs when employees are not able to perform their job at the same level they were before they were injured or affected by illness due to injury.
According to statistics from The Bureau of Labor Statistics, in 2011 more than three million work-related injuries and illnesses were reported. At $210 billion, costs were two-thirds higher than those reported in 2001.
According to our survey, most firms consider lost productivity to be one of their biggest costs. In fact, more than 40% reported that they’d had to pay out between $10,000 and $100,000 due to lost productivity associated with workplace injury. We hope that as your company grows and becomes profitable, you will consider adding some type of disability insurance policy or personal liability coverage.
Failure To Fill Orders
Accident can cause Failure to Fill Orders. The shortage of employees with the skills required for your company’s job vacancy or a staff reduction caused by an accident or illness could result in a loss of orders, an increased need for overtime and a decrease in productivity. One way to mitigate these risks is by recruiting qualified candidates ahead of time through pre-screening, skills testing and interviewing methods that are best suited for the position requirements.
If a key staff member leaves your company due to an accident, you’ll need to hire someone to fill their shoes. This person won’t be as productive or possess all of the skills of your departed employee for some time. In addition, you may have to provide more extensive training before they’re fully able to do their job at a high level.
The cost of not being able to fill orders is not covered by insurance, hence the organization stands to bear the consequence of not being able to fill its order. This is why organizations should ensure that they prevent workplace accidents as much as possible.
Workers’ compensation insurance may not cover all of the expenses incurred due to workplace accidents; example of such cost is the Supervision cost. The supervision costs refer to the need for additional time, personnel, and equipment needed after an accident. These costs can be significant in cases where employees are injured and unable to work for long periods of time or are even killed on the job. They can range from temporary hiring that requires extra training, security services during hours when someone is unable to work, overtime pay for supervisors and guards or even hiring contractors or other companies to take over some tasks at a higher cost than before.
In personal injury cases, generally speaking, when workers’ compensation is available it covers most of an injured worker’s lost wages. In these instances, supervision costs may be recovered from other parties who are responsible for causing accidents that resulted in injuries and deaths. However, such a recovery could involve lengthy and costly litigation.
Generally speaking, supervision cost is one of the uninsured cost of workplace accident.
Premises Liability (Costs Imposed On Other Parties By The Injured Worker’s Actions)
Another uninsured cost of workplace accident is Premises Liability cost.
Premises liability involves the injured worker’s actions that imposes costs on other parties. These damages can include pain and suffering, lost wages, medical expenses, and in some cases property damage. Injured workers often overlook these damages because they are not as easy to calculate as work loss or medical expenses.
That doesn’t mean you can ignore these damages, however. Premises liability helps injured workers recover costs related to their workplace accidents. The question is who will pay for these uninsured costs? That depends on your state’s laws and whether or not your employer carried a premises liability insurance policy. Not all states require workplaces to carry premises liability insurance policies, so if your employer did not carry such a policy, it may be up to you to seek recourse against them through civil proceedings.
If your employer did carry a premises liability insurance policy, you may be able to file a claim with their insurer to recover costs for premises liability. Your employer will likely want to challenge such claims on any number of grounds, so you’ll need to build your case carefully and work with an experienced lawyer. Premises liability claims are often long and drawn out and can involve considerable legal fees.
Time Away From Work Due To Injury
Another uninsured cost of workplace accident is – Time Away From Work Due To Injury.
The cost of a workplace accident goes far beyond what is covered by insurance. Whether it is time away from work due to injury, medical expenses, loss of income or the pain and suffering caused by the accident, many people aren’t prepared to deal with the aftermath of a workplace accident. To keep your budget safe in case you are involved in an accident, be sure to check with your employer and state disability agency about when your benefits start.
If you need to visit a doctor while you are away from work, be sure to ask your physician if you need prior authorization before getting any expensive tests or procedures. This way, you will not have to deal with unexpected bills when you return to work.
The organization will also bear the cost of an employee absence from work due to injury as they need to either pay for a fresh hand to cover the role of the employee temporarily or pay for additional shift.
Economic Loss To Injured’s Family
The last uninsured cost of workplace accident is – Cost of Economic Loss to Injured’s Family.
The average worker earns a yearly salary of $38,500. When one member of the family becomes injured, they are paid 90% of that salary while they are not able to work. If you include other benefits like healthcare and life insurance, that number goes up significantly. Employees with no health coverage have a potential liability risk in the event of injury. Workers compensation insurance is designed to cover these costs for employees who were hurt on the job.
When someone is injured in a workplace accident, they will often sue to recover economic loss. There are many different factors which can affect how much money an injured employee recovers from their employer. Some of these factors include whether or not it was an on-the-job injury, and how long they have been working for their employer. Workers compensation insurance covers costs for families who are affected by workplace accidents. When one spouse is killed or disabled in a work accident, the family needs to find another way to make ends meet.
The list is not conclusive as there are other uninsured cost of workplace accident.