Liberty Mutual identified the leading causes of disabling workplace injuries and their associated direct costs using its own data, and findings from the Bureau of Labor Statistics and the National Academy of Social Insurance.
Findings from Liberty Mutual’s 2002 Safety Index closely match results from the company’s 2001 Safety Index. The rank order of the 10 leading causes of workplace injuries was identical, with ergonomics-related injuries of “Overexertion” and “Falls” being the leading injury causes. The direct cost of workplace injuries (payments to injured workers and their medical care providers) rose 3.6 percent to $40.1 billion in the 2002 Safety Index from $38.7 billion in the 2001 Safety Index.
The total financial impact of both direct and indirect costs (lost productivity, overtime, et cetera) is estimated by the 2002 Safety Index to be as much as $240 billion.
The results of the 2002 Liberty Mutual Workplace Safety Index provide valuable information for the public policy discussion over the call for voluntary ergonomic guidelines by the Occupational Safety and Health Administration. OSHA recently announced its plans for voluntary ergonomic regulations and the Senate Labor Committee was scheduled to hold a hearing on the proposal on Thursday, April 18.
“The findings of the Safety Index will help in the discussion about the most effective way to improve workplace safety by identifying the top ten causes of workplace accidents, and their direct and indirect costs,” noted Karl Jacobson, senior vice president of Liberty Mutual, who is responsible for safety and health research and product development. “The Index provides motivation and a road map to help employers reduce all workplace accidents, including those that are ergonomic-related.”
According to the 2002 Safety Index, the leading cause of disabling workplace injuries that resulted in employees missing five or more days of work in 1999 was overexertion. Overexertion is defined as injuries from excessive lifting, pushing, pulling, holding, carrying or throwing of an object. Overexertion accounted for 25.5 % of total direct costs and incurred a nationwide cost of an estimated $10.3 billion. Repetitive motion, which is often mistakenly considered as the only type of ergonomics-related injury, came in number 6 costing $2.7 billion and accounting for 6.7 % of direct costs.
“The value of the annual Liberty Mutual Safety Index is in highlighting the major injury causes, direct and indirect costs, and importance of workplace safety, as well as providing information employers can use to reduce injuries,” said Mr. Jacobson. “The consistency of the findings lends authority and points to the strength of the study’s methodology. Having two years of similar data will encourage risk managers and safety directors to use the Safety Index to focus their safety resources on the major causes of workplace injury, benchmark their current performance and reduce injuries.”
Jacobson noted that companies absorb all of the indirect cost of a workplace injury, while the financial impact of the accident’s direct cost depends on a company’s specific workers compensation program (the level of deductible, self-insurance, et cetera). Each injury’s indirect costs are far larger than its direct costs. In fact, 56 percent of business executives from a range of geographic locations, company sizes and industries surveyed by the 2001 Liberty Mutual Executive Survey of Workplace Safety reported that businesses faced between $2 and $5 of indirect costs for each $1 of direct costs.
As a result, the $40 billion of direct costs from workplace injuries identified by the 2002 Safety Index produced $80 billion to $200 billion of indirect costs, for a total financial impact of between $120 billion to $240 billion.
“Workplace injuries needlessly sideline valuable employees and waste financial resources,” said Gary Gregg, executive vice president of Liberty Mutual’s Commercial Markets, which provides commercial insurance coverages to large- and medium-sized companies. “Improving workplace safety protects employees and helps companies better manage their financial performance. This is especially important today, with a recession hurting revenues and profits, and costs, including commercial insurance premiums, rising.”
Liberty Mutual also surveyed executives for their thoughts on workplace safety. Ninety-five percent of business executives report that workplace safety has a positive impact on a company’s financial performance. Fully 61 percent of these executives indicated their companies received $3 or more for each $1 spent improving workplace safety.
Ergoweb will provide an interpretation and analysis of this and other recent developments, including OSHA’s current activities, in the next issue of The Ergonomics Report