Back to that “ounce of prevention” idea: Imagine you’ve achieved a lower-than-average ex-mod of 0.86. You’re now paying $64,500 for insurance—a savings of $10,500.
Now, consider what the Occupational Health and Safety Administration calls “the indirect costs” of the accident you avoided. We’re talking about the production time you would have lost, the costs of recruiting a new employee to replace the person who suffered the accident, the time it would take to hire and train the new worker, property damage, and lower workforce efficiency due to decreased workplace morale—all of that, plus the citation fine itself.
According to OSHA’s scale, these indirect costs can range from 1.1 to 4.5 times the difference between your manual premium and your ex-mod. Let’s use a middle-of-the-road multiplier of 1.5.
$10,500 (your ex-mod savings) × 1.5 (the rate of indirect costs associated with an accident) = $15,750
By adding that sum to your original savings, we come up with the following grand total:
$10,500 (your ex-mod savings) + $15,750 (the indirect costs you avoided) = $25,750
That’s significant for any small business. And keep in mind this theoretical example is a highly conservative one. At KPA, we have been able to bring clients’ ex-mods down from 1.5 to 0.8. That’s on the order of the 6-figure savings—I’ll let you do the math.
Best of all, KPA clients don’t need to spend any more time on safety than they can already afford. Our comprehensive, flexible platform empowers you to quickly and cost-effectively identify issues, implement better habits, and ensure compliance. See how it works.