Liberty Mutual Safety Index and Costs
Posted on Wednesday, December 29, 2004
Liberty Mutual Group announced findings from their first-annual Liberty Mutual Workplace Safety Index, listing the 10 leading causes of injuries and illness that account for 86 percent of the $38.7 billion in wage and medical payments employers paid in 1998, the last year for which data is available. The Safety Index highlights these leading causes and also provides guidelines to help reduce the human and economic costs generated by the top causes of job-site accidents. Liberty Mutual identified the leading causes of workplace injuries and illness and associated direct cost using its own claims data and findings from the Bureau of Labor Statistics and the National Academy of Social Insurance. According to the Safety Index, overexertion, or injuries caused by excessive lifting, pulling, pushing, holding, carrying, or throwing an object resulted in $9.8 billion in direct costs. Repetitive motion injuries accounted for $2.3 billion. When the indirect cost of workers compensation claims are added to the $38.7 billion in direct costs identified by the report, the total economic burden of workplace injuries and illness is far greater, with estimates ranging between $125 billion to $155 billion. "There is a clear link between workplace safety and a company's performance," explained Gary Gregg, executive vice president of Liberty Mutual's Commercial Markets, which provides commercial insurance coverage to large and medium size companies.

"Our Safety Index. can help focus existing safety programs on those areas that have the greatest potential negative impact on employees and employers." Gregg noted three benefits from improved workplace safety. First, it reduces employee pain and suffering. Second, it helps avoid the direct cost of workplace injuries - such as wage replacement payments and medical care expenses. Third, it prevents the indirect cost of these accidents - lower employee morale, lost productivity and the cost of hiring or training overtime or temporary replacement workers. Liberty Mutual will release its annual ranking each year, based on the most recent data from the federal Bureau of Labor Statistics and the National Academy of Social Insurance. Accident Drivers The leading causes of workplace injuries and illness that resulted in employees missing five or more days of work in 1998, include: Accident causes: Percent of workers compensation direct cost paid in 1998: Estimated workers compensation direct cost nationwide: Overexertion - injuries caused by excessive lifting, pushing, pulling, holding, carrying or throwing of an object 25.57% $9.8 billion Falls on same level 11.46% $4.4 billion Bodily reaction - injuries resulting from bending, climbing, loss of balance and slipping without falling 9.35% $3.6 billion Falls to lower level, such as falling from a ladder or over a railing 9.33% $3.6 billion Being struck by an object, such as a tool falling on a worker from above 8.94% $3.4 billion Repetitive motion 6.10% $2.3 billion Highway accidents 5.46% $2.1 billion Being struck against an object, such as a carpenter walking into a door frame 4.92% $1.9 billion Becoming caught in or compressed by equipment 4.176% $1.6 billion Contact with temperature extremes that result in such injuries as heat exhaustion, frost bite or burns .92% $.3 billion All accident causes 100.00% $38.7 billion Knowledge is Power "We developed the Liberty Mutual Workplace Safety Index to provide employers with a single source of information that will help reduce the human and financial cost of workplace accidents," explained Tom Leamon, vice president and director of the Liberty Mutual Research Center, which works to prevent illness and injury at work, home and on the highway. "Actionable information is the key value of the Index. Other studies identify workplace accident frequency rates or the total indemnity cost of all types of workplace injuries. While this broad information is interesting, it is difficult for employers to use it to improve workplace safety. In addition, the Liberty Mutual Workplace Safety Index will help focus public and private safety research efforts on the root causes of workplace injuries and illness." How the Research was Compiled The first step in developing the Liberty Mutual Workplace Safety Index was to apply Liberty Mutual 1998 workers compensation claims cost data to the workplace accident frequency information provided by the U.S. Department of Labor's Bureau of Labor Statistics for that year. In order to broaden the study's findings, the relative proportions of each accident type were then applied to national estimates of the cost of workers compensation benefits from The National Academy of Social Insurance, which includes information from a broad range of workers compensation insurance companies.