The term “workplace” has different meanings for employees in different industries. A large industrial manufacturing company has factory space with heavy machinery situated on the factory floor. Employees must safely navigate their way around the factory floor to complete their daily tasks.

On the other hand, office workers usually work in an office with desks, chairs, and computer equipment spread out across the office. In this case, employees must ensure that they don’t bump into any of the office equipment.

A third example is that of a residential construction company, or home renovation company. Here, workers must negotiate their way around the obstacles caused by scaffolding, ladders, and other construction equipment while building or renovating the home that they are contracted to work on.

Counting the cost of an occupation injury: A case study

Let’s assume for this discussion that you own a construction company. And, you are working on renovating a small boutique hotel. Therefore, there is scaffolding on the outside of the building. Additionally, ladders are standing against some of the external and internal walls. One of your tasks is to redo the roof. And, one of your employees walked on the roof beams and fell through the roof and ceiling onto the floor below.

Although the reason for the accident is not relevant to this discussion, it is interesting to note that there was a rotten beam that was not noticed during the original site inspection. It is also reasonable to assume that the employee was seriously injured and was transported to the hospital in an ambulance. He has spinal injuries, and it is uncertain whether he will be able to walk well enough to go back to work.

Therefore, the question that begs is, what is the cost of this occupational injury?

The Portland personal injury attorneys at Johnston Law Firm provide some of the answers to this question.

Quality of life

There is no way to quantify the loss of quality of life to this employee. The physical, emotional and mental health and wellbeing metrics will more than likely be very low, especially if the individual is in a wheelchair for the rest of his / her life.

The personal injury or tort and tort law definition provides a partial answer to the question of how to quantify this loss.

“A tort is an act or omission that gives rise to injury or harm to another and amounts to a civil wrong for which courts impose liability.”

And the “primary aims of tort law are to provide relief to injured parties for harm caused by others… [and] …to impose liability on parties responsible for the harm.” Finally, the individual seeking compensation through the personal injury law will ask for damages as financial reimbursement.

The financial compensation

It is important to note that there are direct and indirect costs to an occupational injury. The direct costs are the medical bills, and the loss of income while injured. The indirect costs include the loss of quality of life conversion into monetary terms.

Consequently, the financial cost of this injury is calculated as follows:

  • Direct medical expenses = $48 000
  • Indirect cost = direct cost multiplied by 4 = $192 000
  • Total cost (direct + indirect costs) = $48 000 + $192 000 = $240 000
  • The company’s overall profit margin = 10%
  • Total financial cost of the injury = $2.4 million

Final thoughts

It must be noted that these numbers are guestimates used to demonstrate a concept. They are not reality based. However, they might be considered a fairly accurate estimation of the average cost of a workplace injury.