Are you costing your accidents?

Britain has a relatively good health and safety record yet annually there are some 1million injuries and 2.3million cases of work-related ill health in UK businesses, leading to around 40million working days lost each year.

The costs of health and safety failures

The cost to British employers is estimated to be in the range of £3.9 to £7.8billion per annum. The Health and Safety Executive (HSE) suggests that £780 to £4,310million comes from accidental damage to property and equipment (figures from the HSE’s Economic Advisers Unit, 2004). And these figures exclude the costs of work-related road accidents which outnumber conventional workplace accidents by a factor of two to three.

Insured and uninsured costs

Most organisations do not know what accidents and ill-health really cost them in time and money. Few bother to examine costs if and when they investigate accidents and incidents.

It is often assumed that most accident and incident costs are recoverable through insurance. This is a dangerous misconception. The HSE estimates that the ratio between insured and uninsured costs lies in the range of £1:£8 to £1:£36.

In other words, for every £1 recovered from insurers at least £8 is being lost entirely.

Uninsured costs can include:

  • Lost time
  • Sick pay
  • Damage or loss of product and raw materials
  • Repairs to plant and equipment
  • Extra wages, overtime working and temporary labour
  • Production delays
  • Investigation time
  • Fines
  • Loss of contracts
  • Legal costs.

Accident and ill-health costs can be likened to an iceberg: costs that are recoverable are visible but those that are unrecoverable are hidden below the waterline and are many times greater.

Other key points to consider

  • Losing key personnel due to injury or ill-health can be critical to meeting contract deadlines
  • In smaller organisations which have little reserve capacity, a serious accident or an incident such as fire can spell the end of the business altogether
  • Loss of business reputation due to accidents and enforcement action can lead to loss of new or repeat business or loss of new investment
  • Accidents can damage workforce morale and affect productivity
  • Serious accidents leading to injury may be quite rare but minor incidents leading to costly damage are happening most of the time
  • Accident claims invariably mean higher insurance premiums or insurance cover actually being refused.

If you think safety is expensive, try having an accident!

Roger Bibbings

RoSPA’s Occupational Safety Adviser

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