Why Injury Management
is Essential: What Claims Really Cost Employers
Employers pay both directly and indirectly for the cost of employee
injuries. Directly, the employer faces increased Experience Modification
factors for three years and lost dividends and return of premium. While
it has been shown that employers pay $2 to $3 back to the insurance company
for every $1 paid out for many employee injuries, indirect costs are even
more significant. In fact, on average indirect costs exceed direct costs
by 4:1. These include lost productivity, training costs, overtime, increased
stress for supervisors and fellow employees, schedule delays, unhappy
customers, morale problems from having temporary employees and legal fees.
Moreover, the longer employees are away from the job, the less likely
they will return to work. Statistics show that at 12 weeks employees have
only a 50% chance of ever getting back on the job.
The chart below indicates how much revenue is required to pay for an accident.
|