1. The Soft Costs of Injuries Presented By: John S. Hillard, CSP Risk Control Consultant jhillard@murrayins.com 717-606-5904

2. 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?’ Soft Costs of Injuries

3. Examples of Soft Costs: 1.Production related costs 2.Work force related 3.Management efficiency 4.Insurability 5.Internal/External corporate image Examples

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

5. Gossip about the incident during shiftOrders shipped to customers late $ 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

6. 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 Workforce Related Costs

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

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

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

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

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

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

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

14. 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! Best Practices

15. 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 Best Practices

16. 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 Conclusion

17. Thank You!