The Hidden Cost of Workplace Fatalities: 43 Billion Dollars

dollar_signWhile even the non-fatal injury can cost a company ten’s of thousands of dollars (as noted in’s post: The Hidden Cost of Unsafe Behavior: Running the Numbers, even more unbelievable is the cost of a fatality.  NIOSH has produced a document entitled, The Cost of Fatal Injuries to Civilian Workers in the United States, detailing a decade of research (1992 – 2001) into the economic aspect of a workplace fatality.

The method used to calculate the economic burden was the cost-of-illness method: which sums indirect and direct costs.  The cost-of-illness method was used to calculate the mean, median, and total societal costs for the fatalities reported in National Traumatic Occupational Fatalities surveillance system (NTOF).

Indirect costs are calculated for each incident by accounting for the probability of survival, median annual earnings at the time of death, home production costs, earnings growth rate adjustments, and real discount rate. These costs are then added to the direct cost of medical expenses to arrive at the societal cost of fatal injury. The addition of home production costs to this model represents an advancement in methodology over models which simply account for loss of income from wages and presents a point of departure from previous studies. Limitations of this study are varied and include lack of inclusion of some costs of insurance compensation, lack of comprehensiveness of data drawn from death certificates and pay equity.

After the calculations are preformed, over $43 billion dollars (in 2001 dollars) is the cumulative cost for occupational fatalities in the US.


Some of the major findings included:


The Hidden Cost of Unsafe Behavior – Running the Numbers

dollar_signAccording to information provided in a report by a nationwide insurance company, approximately 60% of company executives figure that their companies save $3 for every dollar spent on safety programs.  A $10,000,000.00 company that spends 1% of their budget on safety can figure to save approximately $300,000.00.  OSHA puts the figure to be more likely $6 to $1 (i.e. $600,000.00 saved).

If an employee is injured, the insurance company reported that for every dollar cost of an accident, approximately $3-$5 additional dollars are spent as indirect costs.   Therefore, if an accident costs a company $10,000.00, an additional $40,000.00 may be spent on average for that injury, costing the company a total of $50,000.00.

Well, how much money does that $10,000,000.00 company need to make to recoup that $50,000.00?  Assuming the company has a profit margin of 8%, the company will need to increase revenue by an additional $625,000.00 (or 6.25%).

Stay Safe!

OHSAS 18001 Explained


Often used in conjunction with ISO 14001 (Environmental Management System) OHSAS 18001 2007 is a voluntary occupational health and safety management standard  that was developed by the OHSAS Project Group and sets the criteria for health and safety management requirements for various health and safety programs.  The goal of OHSAS 18001 is to help organizations and businesses rec0gnize, evaluate and control their health & safety risks and allow a proactive approach by an organization to mitigate those risks.