While every business strives for a zero-incident environment, the fact is, accidents are bound to happen sooner or later. But the good news is that the frequency and severity of these incidents can be greatly reduced over time by better understanding the nature of worker’s compensation claims, identifying key risk factors, and observing how risk management can play a role in a safer overall workplace environment. Here’s a closer look at the relationship between risk management and workers compensation:
The Stats Don’t LieThe average cost of a worker’s compensation claim in 2017-18 was more than $40,000 per the National Council on Compensation Insurance – $41,003 to be exact. In fact, the most costly claims by cause of injury are the result of motor vehicle crashes, which average nearly $78,500 per claim filed in the years 2017 and 2018. Burns ($49,521), slip and fall incidents ($47,516) and being caught or compressed between objects ($43,538) are other claims that came in above the average. Wondering what the most costly worker’s compensation lost-time claim is by nature of injury? As you might expect, it’s that which involves some sort of amputation. These claims average nearly $110,000. Not far behind are injuries related to a fracture, crush or dislocation ($59,253), miscellaneous trauma ($57,805) and burns ($48,295).
Construction and Lost Work DaysAccording to Ortwerth Law, construction is the industry with the most numbers of overall deaths in the year 2017 with 971 worker deaths. Non-fatal injuries, however, in the industry forced 1.5 million construction workers to miss at least one day of work.
Risks That Increase Workers Compensation CostsLiberty Mutual Insurance has put together a detailed list of the driving risks that increase the cost to the employer. Here’s a look at these trends that have a direct impact on the worker’s compensation claim amount:
- Inexperience among the workforce: Due to a labor shortage in the types of professions where worker’s compensation claims are more common, it’s typical for some employers to revert to hiring inexperienced workers. And while employers may be able to save on salary overhead by hiring inexperienced workers, there’s a good chance that any filed claims will more than offset these savings. In fact, it’s estimated that employees within their first month on the job are about three times more likely to incur a lost-time injury than those who have been working at their jobs for more than a year.
- Comorbidities: Obesity. Hypertension. Mental illness. Addiction. These are all comorbidities that are likely to appear on a claim, which just so happens to be a key driver in medical costs. In fact, it’s estimated that medicine accounts for as much as 30 percent of physician expenses in worker’s compensation claims.
- Mental health: The injury itself isn’t the only factor that worker’s compensation claims often need to account for. There’s also the aftereffects of an injury. For example, more than half of all injured workers report feeling depressive symptoms, notably in the first month after an injury. There are many ways to help identify and address mental health issues following an incident, which may involve constant communication, light-duty work and other supportive measures.
- Very serious injuries: Overexertion ($13.1 billion), falls ($10.4 billion), and being struck by either an object or equipment ($5.2 billion) are among the top 10 causes of disabling injuries in the workplace.
How Risk Management Can Decrease Workers Compensation ClaimsWhile we may not be able to completely eliminate worker’s compensation claims, there are measures that can be taken to keep workers safer and decrease both the likelihood and amount of insurance claims. Here’s a look at some tips on how to do it:
- Identify your major risks by assessing your leading indicators.
- Leverage technology: Don’t underestimate the difference that the right technology can make when it comes to risk management and safety improvements. Certain solutions, such as those from Anvl, prioritize safety for frontline workers, allowing hazards to be identified early and appropriate interventions to occur so that the situation doesn’t escalate into a dangerous one.
- Collect and analyze data over time to assess risks within a business and better understand where the threat is. These solutions are essentially able to encompass total worker health, protecting them not just from a physical standpoint, but from a holistic one as well.