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How Much Does a Musculoskeletal Injury Cost?

According to Liberty Mutual, the largest workers’ compensation insurance provider in the United States, overexertion, lifting, pushing, pulling, holding, carrying or throwing an object, costs employers $13.4 billion every year due to the onslaught of musculoskeletal disorders.

Statistics compiled by the U.S. Department of Labor for 2011 reported 1,181,290 occupational injuries requiring days away from work to recuperate. Of this total, 387,820 or 33 percent were directly related to musculoskeletal disorders.

However, the costs include more than just time off work and medical bills. OSHA breaks down the costs of any injuries into both direct and indirect costs. Direct costs are paid by worker’s compensation insurance, but employers also pay premiums based on their safety performance records. When their safety records decline, their premiums go up to reflect this performance.

Indirect Costs

OHSA defines indirect costs to include all work stoppage and overtime costs necessitated by an injury, including training of new employees, and clean up and repair of damaged materials or machinery. In addition, legal costs, workers’ pain and suffering, and loss of revenue due to lack of public trust or bad press. On average indirect costs are 1.1 times the direct costs.¹

Direct Costs

Direct costs associated with MSD type injuries include $23,083 for hernias, $28,338 for sprains, and $32,319 for strains.
How Much Does a Musculoskeletal Injury Cost?
These statistics indicate that a musculoskeletal work related injury can cost an employer anywhere from $48,000 to $67,000 for each incident.²

Insurance premiums

The cost of workers’ compensation insurance is determined by the workers’ compensation board in each state. Although base rates vary slightly from state-to-state, the basic process each state uses to calculate base rates is similar and is based on size of payroll, classification of company and jobs and Experience Modification Rate (EMR), a number based on three years of injury losses. Workers’ compensation premiums are multiplied by the EMR rating, either raising or lowering the premiums. An EMR rating of 1.0 is considered average.

Therefore, in terms of total costs to a business, MSDs can become incredibly expensive. It’s time for industry sectors outside of manufacturing to take MSDs seriously, because even just one injured employee can costs a business tens of thousands of dollars in medical bills, insurance premiums, overtime pay, and lost revenue from public distrust

1 In the OSHA report, the indirect cost estimates are taken from the Business Round-table publication, Improving Construction Safety Performance, and are based on a study conducted by the Stanford University Department of Civil Engineering.
2 The average claim costs within the OSHA report were provided by the National Council on Compensation Insurance, Inc. (NCCI). The information in the report reflects the average cost of a lost time workers’ compensation insurance claims from unit statistical reports submitted to NCCI 
for policy years 2007-2009.

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