After the Accident: What the Smallest Mishaps Actually Cost the Business

Workplace accidents

Accidents can happen from oversights and over-reaching, such as this.

Accidents in the workplace incur a cost that directly impacts your company’s bottom line in several ways. Whether it’s a slip and fall, an injury such as a sprained wrist or something more serious like a broken leg, or not a physical accident, just a mix up in paperwork, the cost of legal, insurance, productivity, and contracts are a very serious concern business owners should pay attention to. Work related accidents are driven by two factors: training employees properly and maintaining a safe workplace environment. Businesses can take steps to mitigate these occurrences by implementing a company-wide safety plan in these areas.

Legal

Legal fees for litigating accidents in the workplace can be astronomical. They encompass paying workers for compensatory, punitive, statutory, and other damages. There may also be fines involved that are metered out by various levels of government. The services of an attorney are crucial to minimize the losses to each entity and to protect from future exposure. New conditions may be imposed by agencies including OSHA that you also have to pay attention to. Legal representation will prevent undue harm to your on-going business operations.

To stop these fees from accruing from an accident, train employees properly. Show them the most important documents, what they’ll be in charge of, and emphasize what mistakes to avoid with paperwork and safety measures.

Insurance

Every business has a variety of required insurance coverage that is specific to the operations. These include worker’s compensation, liability, and more. Rates start at the customary levels in accordance with your company’s industry. and should be similar to other companies in your industry. Increases are based on the claims and safety record of your organization. In most cases, your company must implement a safety program before insurance providers will underwrite a policy. Hiring an employee with a degree in occupational safety or a masters in emergency management facilitates the development, monitoring, and management of such a program.

Check to make sure your business is covered in the areas that would affect productivity and accidents most. If you have a preventative plan, you likely will never even need to use this insurance.

Lost Productivity

When accidents happen, productivity is lost due to worker absenteeism. Accidents can impact employee morale, which will also play a role in the workplace atmosphere and productivity. Continuous training is a deterrent to accidents happening, and could include periodic reviews for operating machinery or handling chemicals. Additional steps may include posting signage throughout the work and common areas to remind employees to be diligent while adhering to the policies that are in place.
Have goals for employees to work toward and make sure they are properly motivated to do their work correctly.

Business Contracts

Your business’ operational track record is incorporated into the reviews conducted by your vendors and clients before signing a contract. Securing a premium deal on rates for services and goods is directly linked to your company’s ability to deliver items without accidents. In addition, some contracts have clauses and contingencies included to address these concerns. Government contracts are examples of lucrative deals with stringent requirements in place.

Set up a policy with your own vendors and make sure you yourself are vetted. When you know up front what you can expect, accidents are less likely to occur.

Every mishap in your company may not be a major accident that results in a big loss. However, they must all be reported. Surprise or delayed reports may be construed as trying to circumvent the system and may trigger in-depth audits and investigations. This in turn will generate additional costs. Developing and maintaining a safety program is the best policy against these risks.

About the Author.

Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For your business, make sure you have a professional with a masters in emergency management take a look at your policies to ensure yours are in compliance with the law. For more information, contact Brooke via Twitter @BrookeChaplan.