Frequently Asked Questions About Injury Costs
What Multiplier is Used To Calculate Indirect Costs?
OSHA projects the amount of indirect costs may be estimated by multiplying an injury's direct costs by the multiplier shown in the below table.
| Direct Cost |
Multiplier |
| $0 - $2,999 |
4.5 |
| $3,000 - $4,999 |
1.6 |
| $5,000 - $9,999 |
1.2 |
| > $10,000 |
1.1 |
What is the True Cost (or Total Cost) of a Workplace Injury?
Workplace injuries have both "direct" and "indirect" costs.
"Direct" costs are the most obvious (such as medical bills), but represent just a fraction of the overall cost of an injury.
"Indirect" costs are less obvious (such as loss of productivity), but are estimated to be 3 to 10 times higher than direct costs.
What are "Direct" Costs of an injury?
Think of "direct" costs as those that are paid to address the damage caused by an injury (or the costs you would typically claim under your worker's compensation or disability insurance). Examples of "direct" costs include, but are not limited to:
- Medical expenses
- Lost wages
- Rehabilitation expenses
What are "Indirect" costs of an injury?
"Indirect" costs are all of the other costs that impact a company's bottom line as the result of an occupational injury. These costs are often referred to as "hidden" costs and may include, but are not limited to:
- Loss of efficiency from employee's absences
- Lost productivity while managing incidents
- Lost productivity due to lower employee morale
- Damage to product or product spoilage
- Equipment damage
- Temporary labor and/or overtime costs
- Cost of retraining an injured employee or training a new worker
- Emergency supplies
- Potential OSHA Fines
- Attorney Fees (such as for negotiating OSHA penalties)
- Increase in Worker Compensation Insurance Costs
- Negative publicity and reputation loss
How Injury Reporting Software Can Help
Injury Reporting Software streamlines and simplifies your processes for reporting, tracking, and investigating incidents. This results in:
More Timely Reporting - Incidents and hazards are more likely to be reported in a timely fashion using our efficient incident reporting app.
Improved Performance - Timely reporting results in more efficient responses and corrective action implementation, which reduces the potential for future injuries, eliminates downtime, and improves culture.
Lower Cost Per Injury - Prompt reporting helps ensure injured or ill employees have quicker access to appropriate medical care, which can help get them back to work sooner.
Improved Cost Tracking - With a centralized database of injuries and associated direct and indirect costs, companies are able to quickly run reports demonstrating trends and how injuries are impacting their bottom line.
Trend Identification - Standardized forms gather consistent information and improve incident management around the globe. This allows for better trending and improved visibility of areas/activities that need help/resources.
If you need help calculating the cost of injuries for your company, please call (720) 547-5102.
