The Business Case for Safety: Costs and Benefits questions for the CSP
CSP Domain 2: Program Management (2.11 Budgeting, finance and economic analysis (return on investment, cost/benefit analysis)). 3 free questions below. Every answer quotes and links the source document it comes from.
Sources covered
- OSHA, Business Case for Safety and Health (Costs; Benefits) Business Case for Safety and Health
Guidance documents are quoted from the published edition linked above; they are recommendations, not regulations.
Question 1
A machine shop had a forklift tip-over that injured an operator. A safety manager is building a cost summary and lists these items: the operator's workers' compensation payments, the operator's medical bills, the cost of training a temporary replacement operator, and the cost of repairing the damaged forklift. Which item should the manager classify as a direct cost?
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Answer: D. The operator's medical bills
OSHA's business case guidance lists workers' compensation payments, medical expenses, and legal services as direct costs. Training replacement employees, repairs of damaged equipment, and lost productivity are all named as indirect costs, so those three choices are wrong.
On the job
A plant engineer at a metal fabrication shop helps the safety manager tally the cost of a crane-related injury. Workers' compensation payments, the injured worker's medical expenses, and legal fees go in the direct cost column. Replacement training, repair of damaged equipment, and lost productivity are entered separately as indirect costs, so the summary shows the two categories distinctly.
Study aid, not site-specific safety advice. The official rule controls.
Answer D comes from
OSHA, Business Case for Safety and Health (Costs; Benefits)(opens osha.gov in a new tab)“Direct costs include workers' compensation payments, medical expenses, and costs for legal services.”
Question 2
A distribution company asks a safety manager to justify spending on a new ergonomic lifting program. Which expected result of the investment should the manager include as a cost saving in the cost/benefit analysis?
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Answer: D. Lower workers' compensation costs and medical expenses
OSHA's business case guidance says investing in safety and health reduces injuries and leads to savings such as lower workers' compensation and medical costs. The other choices are wrong because the guidance names avoiding penalties, and reducing replacement training and investigation costs, as savings, not increases.
On the job
An EHS manager at a cold storage warehouse proposes automated pallet-handling aids to leadership. In the cost/benefit summary, the manager counts reduced workers' compensation costs and medical expenses as savings, along with avoided OSHA penalties and lower costs to train replacement employees and conduct accident investigations. These savings are weighed against the equipment purchase to show whether the investment pays back.
Study aid, not site-specific safety advice. The official rule controls.
Answer D comes from
OSHA, Business Case for Safety and Health (Costs; Benefits)(opens osha.gov in a new tab)“This will result in cost savings in a variety of areas, such as lowering workers' compensation costs and medical expenses, avoiding OSHA penalties, and reducing costs to train replacement employees and conduct accident investigations.”
Question 3
A packaging plant had a conveyor guarding incident. A safety analyst is sorting the cost items into direct and indirect categories for a cost summary. The items are: (1) the injured employee's workers' compensation payments, (2) the cost to train a temporary replacement operator, (3) the attorney fees for responding to a claim, and (4) overtime paid because of lost production on the line. Which item set belongs in the DIRECT cost category?
Show answer and source
Answer: C. Workers' compensation payments and attorney fees
OSHA's business case document lists workers' compensation payments, medical expenses, and legal services as direct costs. Replacement training and lost productivity are named as indirect costs, so each wrong pairing includes at least one item that belongs in the indirect category.
On the job
An EHS manager at a beverage bottling plant built a cost summary after a labeler jam injured a line worker. The manager entered the workers' compensation payments, the treating clinic's medical expenses and the outside counsel's fees for a claim response as direct costs. Training a temporary operator and the overtime from lost output went in the indirect column, so the summary showed the full cost of the event.
Study aid, not site-specific safety advice. The official rule controls.
Answer C comes from
OSHA, Business Case for Safety and Health (Costs; Benefits)(opens osha.gov in a new tab)“Direct costs include workers' compensation payments, medical expenses, and costs for legal services.”