The Hartford Introduces Losstimator(TM)

April 8, 2003

When there is an accident in the workplace, the obvious costs include medical expenses and salary for injured employees, and repairing or replacing any damaged property. But it is the indirect costs that account for the majority of an accident’s cost – as much as four to 10 times the direct expenses, according to Brian Hayes, executive technical consultant at The Hartford Financial Services Group.

To help businesses understand the total cost of a workplace accident — including indirect expenses — The Hartford has created a cost estimation tool called the Losstimator(TM).

“Businesses often overlook a variety of costs, especially indirect costs when considering the total value of a workers’ compensation claim,” Hayes said. “We’ve created the Losstimator(TM) to help quantify all the costs associated with a workplace accident so that they can be easily understood by financial professionals and used in determining the resources to put into safety and other loss-prevention programs.”

Indirect costs of an accident can include items such as time spent investigating and reporting the accident and loss in productivity of co- workers who are distracted by the accident or need to undergo additional training to help fill in for the injured worker.

“In these tough economic times, showing financial professionals exactly how much a workplace accident can ultimately cost makes it easier to justify the expense of accident prevention,” said Hayes.

Flexibility is an important benefit of The Losstimator(TM). Risk managers or business owners can adjust the modeled information, creating company- specific scenarios to meet their needs. Once the data is entered, the Losstimator(TM) will estimate either the cost of a single accident or an entire accident year. Depending on the user’s preference, cost calculations can be based on an estimated aggregate of accidents that occur in the industry or on actual costs from a specific incident at that company. Additionally, accidents are classified as low, medium or high severity, allowing a variety of scenarios to be modeled. The Losstimator(TM) then estimates indirect costs, including those associated with the injured worker, co-workers, lost profit, property, and other general and administrative costs.

The Losstimator(TM) estimates indirect costs based on the number of worker hours lost. These costs include those associated with the injured worker, co- workers, management, property, and general costs, such as lost profit from site closure and legal fees.

“Of course the best workplace accident is one a company avoids in the first place, so it is important to have a good loss control program in place to help manage risk. The Losstimator(TM) can help quantify total costs and demonstrate the financial gains that effective risk management programs can provide,” Hayes explained.

It is available on the Web at

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