How Uninsured Worker Injury Cost Are Sucking Your Profits Dry, And What You Can Do About It
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Beware: Only 35% Of The Cost Of Worker Injuries Are Insured. The Rest Directly Hits Your Bottom Line
William C. Reynolds, CPCU, CEBS, MBA
President
COMPERASER, INC.
Have you fallen into the trap of linking insurance premium with total workers compensation costs? I ask this because, while insurance premiums are certainly important, ultimately the cost of your workers compensation program is a function of total economic impact of your claims - not insurance premiums.
Industry statistics consistently indicate that only 25 – 40% of the total cost of workers compensation claims are transferable to your insurance carrier. The remaining cost still hits your bottom line - and hits it hard – but are completely uninsured. These "uninsured costs" are the result of the marginal inefficiencies to your manufacturing or service process as a result of a workrelated injury.
Unfortunately uninsured costs are not taken into account by most business owners and financial mangers because they are not easily identified. Examples of such costs include:
- Worker and co-worker downtime
- Co-worker assistance
- Training replacement workers
- Damaged equipment
- Damaged products and materials
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CompEraser, Inc.