The True Cost of Workplace Fatalities: Financial, Legal, and Human Impact

Sarah is a Health & Safety Manager for a construction company in the UK. She spends her days making sure her team members are as safe as possible, regardless of where they are. Despite her best efforts and the efforts of other safety professionals like her, the reality of Serious Injuries and Fatalities (SIFs) in the workplace remains stark.

In 2023, the US recorded 5,283 worker fatalities due to work-related incidents, with construction accounting for the highest share at 1,075 deaths. The transportation and warehousing sector followed, reporting 930 fatalities. 

SIFs leave a profound impact, not only on workers and their families but also on entire communities and organizations. Beyond the human toll, the financial and legal consequences can be devastating. For Sarah, each statistic represents a life lost, a family in mourning, and a system that needs to improve. 

As someone on the front lines each day, Sarah knows how important it is to address workplace safety issues. Not only is it essential for compliance, but proactive measures will help create a culture of safety where employees’ wellbeing is truly prioritized.

In this article, we’ll explore the true cost of workplace injuries and fatalities.

The Financial Impact of Workplace Fatalities

In 2022 the total cost of workplace-related injuries and ill health in the US was estimated to be $167 billion. In that same year, 108 million days were lost due to work-related injuries. When looking at the cost of workplace injuries and fatalities, it’s important to consider both direct costs and indirect costs. Both factors play a significant role in your financial health. 

Direct Costs: Direct costs are what your company can expect to pay out of pocket, immediately following a serious injury or fatality involving your workplace. These costs are usually well documented and easy to keep track of.

Direct costs include:  

• Medical expenses
• Workers’ compensation
• Disability payments
• Legal fees
• Regulatory fines and penalties

Indirect Costs: Indirect costs are secondary expenses your company incurs following a SIF. They accumulate over time. Because of this, Indirect costs can be harder to measure but they generally exceed direct costs. You may find these costs sneaking up on you, which is why it’s essential not to get complacent. 

Indirect costs include:

• Loss of productivity
• Operational disruptions
• Increased insurance premiums
• Loss of trust from employees (this often leads to higher turnovers)
• Hiring costs
• Training costs 
• Financial repercussions from reputational damage

The Legal Consequences of Workplace Fatalities

Maintaining compliance when it comes to workplace safety is a complex matter. A death places your business in the spotlight. It will undergo a period of meticulous scrutiny at the hands of enforcers. There are a variety of legal considerations that businesses must be aware of. Legal matters vary greatly by industry and usually require qualified assistance to navigate. As always, regulations may differ based on industry. It’s up to your organization to maintain compliance with all applicable laws and regulations. 

Criminal and civil liabilities: When a workplace-related fatality occurs, the business in question becomes vulnerable to legal repercussions. Businesses may be brought up on criminal charges such as gross negligence or manslaughter. They may find themselves embroiled in civil lawsuits from victims’ families. These procedures can lead to substantial fines and hefty legal fees.They may even result in imprisonment for responsible parties. Not to mention, they can severely damage a company’s reputation and stakeholder confidence. 

Regulatory compliance: Your company has a responsibility to abide by all laws and regulations. Fatalities must be reported to the police and OSHA, even if the employee was off-site at the time of their death. In the US, OSHA investigate workplace fatalities, and that investigation can take up to six months. They also have the power to impose restrictions and other consequences on companies. 

US fertilizer maker Two Rivers Terminal was fined $394,000  after a truck driver died from toxic fumes coming from one of their tankers. The Washington State Department of Labor & Industries issued 11 citations related to the incident. These included a lack of proper training and a lack of atmospheric monitoring.

Cleveland bakeware company G&S Metal Products Co. Inc. faced $182,000 in fines after two workers suffered amputations from an unguarded machine. These injuries completely transformed the lives of the victims, and they could have been avoided with thoughtful safety measures.

The Human Impact

The most devastating consequence of workplace fatalities is the human impact. The human impact may be difficult to quantify, but it’s no less profound. Losing a family member, friend, employee, or coworker is incredibly difficult. The emotional and psychological toll may lead to feelings of grief, guilt, shock, and a deep sense of loss.Those who witnessed or were closely connected to the incident may suffer from long-term psychological issues. 

The weight of a fatality can also impact the broader team and the company culture. Fatalities damage a company’s reputation. They lead to trust issues and a decrease in engagement across the organization. Fatalities can create a stressful environment. Productivity may suffer while employee turnover increases.The safety culture your business has worked so hard to create may weaken. This can even leave the door open to more incidents if you’re not careful.

How can businesses prevent workplace fatalities?

Reducing injuries is essential for employee peace of mind and smooth, productive, profitable operations. Did you know: Companies with high EHS performance have seen a 12%-point higher revenue growth (16% increase over the last decade) compared to those with average safety performance, which saw just a 4% increase? Here are some tips to help your business decrease the true cost of workplace injuries and fatalities. 

• Hazard Identification and Control: Use risk assessment software to find out where you’re vulnerable and focus on critical control measures. EcoOnline’s intuitive mobile EHS solution makes it easy for workers to identify hazards and get proactive about safety. 
• Improve Worker Safety Knowledge: Invest in a tailored training solution that aligns with the roles of your workforce.  EcoOnline’s training & eLearning solution offers targeted, on-demand training. Identify knowledge gaps, track training progress, and make sure that everyone on your team has completed the courses they need to help keep themselves and their colleagues safe.
• Clearly communicate and carefully plan high-risk work: Adopt a Permit to Work (PTW) system to strictly control activities and ensure cohesive coordination. 
• Put emergency procedures in place: Rapid emergency response will help mitigate dangers to your employees. Make sure they’re prepared for all scenarios. 
• Use targeted interventions: Use EcoOnline’s EHS solution to identify trends and patterns. Implement targeted interventions to reduce risks associated with tasks around the workplace. 

EcoOnline’s seamless EHS solution makes health and safety visible across your workplace. When you have more information, you can make better decisions.  Book your demo with us today to learn how you can reduce SIFs and create a safer, more compliant workplace.