1. The Soft Costs of Injuries
Presented By:
John S. Hillard, CSP
Risk Control Consultant

2. 1.) Also known as indirect costs
Soft Costs of Injuries
What is a “Soft Cost”?
1.) Also known as indirect costs
2.) Costs that are difficult to quantify
3.) Often the answer to ‘Where did that money go?’

3. Examples of Soft Costs:
Production related costs
Work force related
Management efficiency
Insurability
Internal/External corporate image

4. Production Related Costs
Costs following an injury related to:
Decrease in productivity or quality
Loss of income sources
Repair and replacement of equipment

5. Production Related Costs
Gossip about the incident during shift
Equipment or areas shut down for investigation
Customers lost due to inability to fill orders on time
Product destroyed in loss, failure to fulfill order
Orders shipped to customers late $

6. Workforce Related Costs
Costs following an injury related to:
Payment of additional hours or overtime hours
Loss of experienced and skilled workers
Secondary losses due to shock or psychological trauma

7. Workforce Related Costs
Overtime pay required to temporarily cover injured worker’s job
Employees work late that day to cover lost production
More employees needed to replace a more efficient employee
Unable to find replacement employees for that position
Several employees miss a work day due the psychological impact $

8. Management Efficiency
Costs following an injury related to:
Additional work for management staff
Unexpected work
Or duties above and beyond scope of normal job

9. Management Efficiency
HR submits claim, follows up with adjuster, submits wages & communicates with employee regularly
Supervisor takes injured worker to doctor or hospital
General manager must coordinate overtime and fill in for some tasks
Several members of management and supervisors are deposed and required to testify in court
Manager completed a first aid injury report $

10. Costs following an injury related to:
Insurability
Costs following an injury related to:
Insurance recommendations or investigation
Loss in desirability due to frequency or severity
Loss of competition

11. $ Insurability Current carrier not willing to offer a renewal
Handful of carriers desire to write the account
Loss control rep requires immediate correction rather than correction over time
Increase in MOD factor
State-fund or excess market $

12. Internal/External corporate image
Costs following an injury related to:
Repairing image with public, customers or employees
Loss due to corporate image
Loss of competition

13. Internal/External corporate image
Customers avoid doing business because you have a “certain reputation”
Employees feel as though their safety isn’t important
Prospective employees don’t feel you provide a safe work environment
Current employees look for a new place to work
Industry as a whole develops a reputation leading to broad stereotyping $

14. Best Practices PREVENT INJURIES!
If we don’t have losses we don’t have hidden costs
Invest up front to prevent losses
Look for and investigate near miss accidents
Develop and hire employees that value safety
Participate in the OSHA/AMI alliance!

15. Use good claim management practices:
Best Practices
Use good claim management practices:
Offer return-to-work to injured workers
Keep communication open with ALL injured workers
Report claims early
Communicate with insurance carrier and agent

16. Conclusion
Conclusion
Losses that don’t happen are cheap!
Soft costs are hard to anticipate and quantify
An ounce of prevention is worth a pound of cure

17. Thank You!