Workplace safety might not be the first thing you think about when managing your small business, but ignoring it could be one of the most expensive mistakes you make. According to Pie Insurance’s 2025 State of Workplace Safety Report, nearly 1 in 3 small businesses spent over $20,000 last year on injury-related expenses.
That’s not just a regulatory headache — it’s a direct hit to your profit margin. And, to make matters worse, half of those injuries were preventable.
This article highlights the importance of workplace safety for small business owners. We’ll break down the financial risks of overlooking hazards and share how a few smart strategies can protect both your team and your bottom line.
The True Cost of Workplace Accidents
When an employee gets hurt, the costs go far beyond a bandage and a claim form. The price tag typically includes:
- Workers’ compensation premiums
- Medical treatment and follow-up care
- Legal expenses (even for minor disputes)
- Overtime to cover absent staff
- Lost productivity and project delays
The report from Pie Insurance found that 32% of small businesses faced more than $20,000 in injury-related costs last year, often without a clear plan to prevent future incidents.
Why Small Businesses Are Especially Vulnerable
Large corporations may have full-time safety officers and HR teams. Small businesses, on the other hand, operate with tight margins and smaller teams, where one absence can disrupt the whole schedule.
Unfortunately, many owners believe “it won’t happen to us” — until it does. One slip, one cut, or one overexertion injury can lead to a cascade of costs and lost time.
5 Overlooked Safety Weak Spots That Could Be Costing You
1. Improvised Safety Measures
Nearly 49% of small businesses admitted to improvising when proper safety equipment isn’t available. Makeshift solutions can lead to injuries, insurance claims, and lost workdays.
2. Lack of Formal Mental Health Protocols
Mental health-related injuries made up 22% of all incidents in 2025. Yet only about half of businesses have formal mental health safety measures in place.
3. No Driver Monitoring for Commercial Vehicles
If your business uses vehicles, the risks are even higher. The average cost per accident is $5,725, and many businesses still don’t use GPS tracking or telematics to prevent reckless driving.
4. Outdated or Rarely Conducted Safety Training
Many employees ignore safety procedures because they’ve either forgotten them or never learned them in an engaging way.
5. Reactive vs. Proactive Safety Culture
Waiting for an accident to happen before implementing safety policies is like installing a fire alarm after the building burns down. A proactive approach saves time, money, and trust.
Case Example: The Cost of a Single Injury
Let’s say you run a small retail shop. One day, an employee slips on a wet floor. What follows:
- Medical expenses total $8,000 for treatment and recovery.
- Their absence necessitates overtime for other staff, adding $3,500 in payroll costs.
- A lawsuit from the injured employee incurs an additional $10,500 in legal and settlement fees.
Total cost: $22,000 — all from one puddle of water.
Turning the $20,000 Mistake into a $10,000 Opportunity
Here’s the bright side: 50% of workplace injuries are preventable, and taking action now can turn risk into return.
According to Pie Insurance, small businesses could save $10,000 or more per year by simply reducing preventable incidents. Prevention may involve conducting routine safety audits, upgrading PPE, or leveraging tech like AI, GPS tracking, and wearable monitors.
These are investments, not expenses, and they often pay for themselves within a year.
Workplace Safety for Small Business Owners: A 3-Step Action Plan
Preventative measures don’t have to be complicated, and they don’t require a six-figure budget. Begin with these three quick wins to immediately reduce your risk:
- Conduct a safety audit. Use a checklist to systematically review your worksite for hazards.
- Talk to your employees. Ask what feels unsafe or overlooked.
- Schedule a safety training refresh. Even a 15-minute meeting counts.
