⇐ Return to list of OSHA FAQ
Direct and Indirect Costs of workplace injuries and illnesses
Create a culture of safety as part of your OSHA program.
A culture of safety and health in the workplace has many benefits including increased worker protection, reduced occupational accidents, injuries and illnesses, and reduced expenses. The safety and health protection of workers is the greatest motivation for preventing and controlling workplaces hazards. Although economic considerations are secondary to the safety of workers, it can be useful for employers to calculate direct and indirect costs of injuries and illnesses in order to better understand the potential economic benefits of an effective safety and health program to reduce occupational injury and illness.
OSHA estimates for each $1 saved on 'direct costs' including medical or insurance compensation for an injured worker, an additional $5 to $50 more is saved on the associated "indirect costs" such as expenses for building and equipment repair, costs to replace damaged materials, losses due to production delays, costs of accident investigation, and money spent on hiring and training replacement workers. OSHA states that "the long-term benefits of effective safety and health management consistently exceed its costs." When you increase worker protection, improve employee morale, increase productivity and reduce business expenses, it becomes easily apparent that safety pays!