Indirect costs of accidents

The total cost (including hoth direct and indirect costs) of accidents to the organization, as well as the average cost of each over the 12-month period and... 

Show management, in terms of dollars, of the direct and indirect costs of accidents and injuries and illnesses to the organization, along with the organizational costs, in terms of fear, lack of trust, feelings of being used, and so on, that can add to lost dollars in terms of lost productivity, poor performance, and lack of employee motivation. 

In Chapter 1, the moral, legal and financial arguments for health and safety management were discussed in detail. The important distinction between the direct and indirect costs of accidents is reiterated here. 

The indirect costs of accidents are not so obvious, e.g. replacement staff, investigation costs, poor publicity. In addition, many of the direct and indirect costs are not recoverable as insured losses. 

Reduction of industrial insurance premiums and costs Reduction of indirect costs of accidents Fewer compliance inspections and penalties... 

Despite the prevalence of sleep disorders, most cases go undiagnosed and untreated. The direct cost of insomnia alone adds an estimated 13.9 billion to the national health care bill each year. The direct and indirect costs of sleep disorders including medications, treatment, absenteeism, decreased productivity, accidents, hospitalizations, and increased morbidity and mortality is estimated to be between 92.5 and 107.5 billion annually. Improvements in recognition and treatment may decrease the economic burden and prevent progression to both medical and psychiatric disorders. ... 

Accidents are the leading causes of death for persons in their teens and up to age 45. The cost of accidents in the workplaces of the United States is approximately 150 billion annually. Work accidents are expensive. Besides the fines, management also incurs costs for safety corrections, medical treatment, survivor benefits, death and burial costs, plus many other indirect costs. The value of lost production due to accidents can exceed those listed above. 

Hidden Costs. To industrial executives is offered the incidental or, more correctly, the hidden or indirect, but nonetheless real, employer costs of accidents, as indisputable evidence of the need for recognizing accident prevention as an essential of sound business management. 

The final phase of the accident sequence and the last link in the chain reaction are costs. All contacts and exchange of energy result in some form of loss. Losses could include both direct and indirect costs of the accident. In mining and industry, property damage costs could be up to 50 times greater than the direct costs of accidents. A third is the hidden costs, which are seldom identified or tallied. The hidden costs of the accident are also losses that are hard to determine, but which exist nevertheless. 

There are direct and indirect costs of an accident occurrence. Some examples of the direct costs are liability claims, compensation, and medical costs. 

Prevention costs less than accidents. This fact has been proven consistently by the experience of thousands of industrial operations. The direct cost is represented by medical care, compensation, etc. The indirect cost of four to ten times the direct cost must be calculated, as well as the loss of wages to employees and the reflection of these losses on the entire conununity. 

Many safety and health experts estimate that the indirect (uninsured) costs of accidents, and the costs associated with them, are equal to five to ten times the direct cost of the accidents. These indirect costs are caused by many of the following ... 

The uninsured (or indirect, hidden) costs of accidents should also be established. Bamber developed a list of uninsured costs which is considered to be objective, and which will readily be accepted by operational management as being costs associated with accidents ... 

For decades, safety practitioners have used the ratio of indirect-to-direct costs of accidents to inform managements on total accident costs and to achieve improvements in safety management systems. The most commonly used ratio is 4 to 1, but the literature contains a wide range of ratios and an even broader range of methods for determining the ratios. Uniformly accepted computation methods to determine indirect and direct costs have not evolved. Differences in the systems utilized are substantial. 

Enter indirect and direct costs of accidents into an Internet search engine and a large variety of documents will be found. Some will pertain to the occupational accident costs that an employer would bear. Others have a broader range and relate to the societal burden of such costs. A selected number of examples are shown here relating to employer costs, the subject to which this chapter is devoted. 

Western National Insurance, in a paper titled The Total Costs of Accidents and How They Effect Your Profits says Most experts estimate that the indirect costs are 3 to 10 times the direct costs of an accident. ... 

The International Labour Organization, in an undated training module titled Introduction to Occupational Safety and Health, says that It has been estimated that the indirect costs of an accident or illness can be four to ten times greater than the direct costs, or even more. ... 

U.S. Department of Labor, OSHA (2007), in an undated bulletin titled Safety and Health Management Systems eTool—Costs of Accidents says Studies show that the ratio of indirect costs to direct costs varies widely, from a high of 20 1 to a low of 1 1. Geige Safety Group provides OSHA Academy Course 702— Accident Investigation Recommendations (April 2010). They say If the indirect (uninsured) accident cost totals 160,000 and the direct (insured) cost is 40,000, the ratio of indirect to direct costs will be 4 to 1. ... 

Any accident or incidence of ill-health will cause both direct and indirect costs and incur an insured and an uninsured cost. It is important that all of these costs are taken into account when the full cost of an accident is calculated. In a study undertaken by the HSE, it was shown that indirect costs or hidden costs could be 36 times greater than direct costs of an accident. In other words, the direct costs of an accident or disease represent the tip of the iceberg when compared to the overall costs (The Cost of Accidents at Work HSG96). 

Whilst the direct costs of accidents, incidents and occupational iU-health can be readily identified, the indirect costs are commonly overlooked and get lost in the operating costs of the business. The indirect costs can be classified as follows ... 

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