Safety Saves More than Lives, it Saves Your Company Money

By Elizabeth Leer

Worker’s Compensation claims cost companies millions every year, but that is only the tip of the iceberg. Throw in injured customer compensation, employee downtime, equipment and facility damage costs, and legal fees and unnecessary accidents prove to be very costly to any business. These costs can be minimalized through comprehensive associate safety training and strict adherence to safety policies.

Brief History of Worker’s Compensation

Worker’s compensation is not solely a U.S. concept. It was initially put into practice in Germany and to some extent Britain. It then expanded throughout Europe and North America from there. New Zealand also implemented a form of worker’s compensation in 1974 that has been much more successful at eliminating litigation than other countries’ policies. In 1986 Australia followed suit implementing the Worker’s Rehabilitation and Compensation Act”, which was revamped and replaced with the “Worker’s Compensation Act” in 1987.

New Zealand’s Comprehensive Accident Insurance System has nearly eliminated worker accident litigation since its implementation by implementing a no-fault comprehensive accident insurance plan. New Zealand’s policy provides compensation for all accident victims and eliminates tort litigation by removing fault from the accidents. New Zealand’s Worker’s Compensation policy has become a working model for other countries as they try to modify their own dysfunctional systems.

Why it Works

A large part of New Zealand’s worker’s compensation policy’s success is that it places a large focus on accident prevention, followed by worker care and reparations. Public hospitals provide treatments and timely reparations are made in order to keep the system flowing smoothly.

To support their campaign for prevention of workplace accidents, New Zealand has several government websites established to guide employers in the process of creating a safe work environment for their employees.

These sites cover a broad spectrum of topics with sections dedicated to a multitude of industries from retail to mining. They also contain employer checklists and detailed action plans for establishing and maintaining a safe work environment in order to minimize on the job accidents.

Additionally, New Zealand enforces its safe work environment policies through a multi-tiered notification process that includes expert assistance in resolving potentially dangerous workplace situations. If this does not fix the problem, the employer can receive a fine of between $100 and $4,000 for safety protocol infringements, followed by legal prosecution that if convicted could have the sentence of up to $500,000 in fines and/or up to 2 years in prison, if the employer still has not corrected the problems.

According to New Zealand’s Department of Labor, the following are key steps to having a safe work environment:

  • know your company’s legal responsibilities
  • make a commitment to provide a healthy and safe workplace
  • plan how your company will implement a safe working environment
  • identify, assess and manage potential hazards
  • provide safety information, training, and supervision for employees
  • report, record and investigate all incidents, injuries, and illnesses
  • involve employees in the safety preparedness process to improve health and safety
  • plan and be ready for any emergencies
  • include contractors and subcontractors in your company’s hazard management processes
  • help your employees return to normal work after an injury

The Cost of Customer Lawsuits

Worker’s compensation and rehabilitation claims are only a fraction of the expense of having an unsafe facility, especially in a retail environment. Customer slip and falls or on-site injuries can lead to extremely expensive and drawn out legal mitigation, large settlements, and costly fines.

According to the United States Department of Labor Occupational Safety & Health Administration, slip, trip, and fall accidents account for 15 percent of accidental deaths and are second in being the cause of fatalities only to motor vehicles. This statistic is a broad spectrum study that covers all industries and includes workers, but it makes it clear that slip, trip, and fall accidents are quite costly.

In a paper produced by Pepperdine University, global retail giant Walmart deals with approximately 1,000 customer injuries daily, and in 1998 had over 3,730 premises liability suits filed against them. This is just one example of how high the number of incidences of on-site consumer accidents is, and the number of premises liability cases filed has consistently increased in the U.S.  since 1998; as has the median award amount. In 2000 the median award for a premises liability case was up 88 percent from what it was in 1994, going from $100,000 to $114,862.

Although the Australian Prudential Regulation Authority (APRA) and the Australian Plaintiff Lawyers Association (APLA) disagree on the amount of increase in public liability claims they both agree that there has been an increase from 1998 to 2000. The APRA states that the number of actual claims rose in that time frame from 55,000 to 88,000 and the overall claim costs rose 52.5 percent, while the APLA says that their ration figures show the increase from 1996 to 2001 was only 2.63 percent.

Limit Premises Liability Claims by having Informed Employees

By educating employees and providing the resources needed to maintain a healthy and safe work environment companies can substantially reduce the number of on-site injuries and premises liability lawsuits. Some ways to do this are:

  • Educate All Employees About the Seriousness of Safety – This is not just informing employees on what to do if there is an injury or accident; include statistics and figures on the cost of injury claims and explain how these expenses cut into the company’s bottom line and inevitably their paychecks. Make sure safety training has a wide variety of possible safety hazard scenarios that could happen and for each scenario what the correct way to resolve the possible safety hazard would be.
  • Have Periodic Mandatory Safety Training Refresher Courses – Having a new hire safety training class for all new employees as soon as they start should be a required policy. However, over time the best way to handle different situations may change and people will forget what they have been taught. To keep safety protocols fresh and up to date in your staff’s minds mandate that refresher courses are taken. Ideally, this should happen either annually or bi-annually.
  • Have Clean-Up and Emergency Supplies Readily Available – Having the proper clean-up and first aid or emergency equipment and supplies on hand are only part of the task. These materials need to be easily and readily available to staff. They are of no value being buried behind boxes of inventory or locked in a supply closet. All staff members need to know where to locate these supplies at all times. These materials should be regularly inspected and replaced or replenished as needed
  • Employee Handbooks – Employee handbooks should include an emergency plan section for major emergencies, as well as a worker’s comp section that contains detailed instructions on what to do if there is an accident or injury, and a section dedicated to safety protocols that provides detailed instructions for specific clean-up or repair situations. This not only gives employees a place to turn to for information if something happens and there is no one else around, it provides the employer with written proof that employees have been provided with this information.
  • Implement and Enforce Safety Protocols – Having safety measures in place means also enforcing them. All companies should have a specific disciplinary policy for any associates who do not follow safety policies. Disciplinary measures should be stringent and also include re-training if necessary. There should be no wavering from employee to employee when enforcing these repercussions. For the safety of all employees, repeated offenses should lead to termination of employment.

On-Site injuries, premises liability claims and workers compensation issues cost companies exorbitant amounts of money, time and resources every year. By educating employees in the workplace and general health and safety companies can save themselves money and frustration while improving their work performance, moral, and safety records. Having a safe and healthy work environment is about more than avoiding injuries, it is essential to any company’s healthy bottom line.