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Work Comp Wednesdays – How to Calculate the Impact of Workplace Incidents on Profitability

Welcome to Work Comp Wednesdays! Insurance People is the industry-leader in North Carolina workers’ compensation insurance. Each week, our team takes a frequently asked question and expands on the issue for our clients, prospective clients, and community members to better understand the confusing nature of Work Comp.


It is no secret that workplace injuries and illnesses can leave a nasty impact on an employer’s bottom line. While most employers understand there are costs associated with each injury, many employers are not aware that their workers’ compensation carrier will not assume all of these costs. In any workplace incident, there are direct costs AND indirect costs. Generally, most direct costs are insured and will be paid by the insurance company, but most indirect costs are uninsured and therefore unrecoverable. In order for a risk-adverse employer to remain proactive, they must be aware of the reality of workplace injury costs and how it impacts their profitability.

OSHA’s $afety Pays Program – Calculate the Impact of Workplace Incidents on Profitability

According to the Occupational Safety and Health Administration (OSHA):

OSHA’s “$afety Pays” program can help employers assess the impact of occupational injuries and illnesses on their profitability. This program uses a company’s profit margin, the average costs of an injury or illness, and an indirect cost multiplier to project the amount of sales a company would need to cover those costs. The program is intended as a tool to raise awareness of how occupational injuries and illnesses can impact a company’s profitability, not to provide a detailed analysis of a particular company’s occupational injury and illness costs.

The $afety Pays Program will:

  • Allow users to pick an injury type from a drop-down list or to enter their workers’ compensation costs.
  • Prompt users for information to do the analysis, including their profit margin and number of injuries.
  • Generate a report of the costs and the sales needed to cover those costs.

Ready to get started? Click Here to be taken to OSHA’s $afety Pays Program! 

Once an employer understands the true impact on their organization’s profitability, they must design a roadmap to develop a proficient workers’ compensation program and a complete safety and health program. With proper procedures in place, an employer can benefit from the long-term savings of workplace injury costs.

For help building a Workers’ Compensation Program, please contact our Work Comp and OSHA Recordkeeping Specialist, Mitch Kaufmann, ACRA, CBIA, MWCA (