Accident Costs
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Transcript of Accident Costs
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The Cost of Accidents at WorkNick HigginsonHealth & Safety Advisor
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Why Prevent Accidents?HumaneLegalEconomic
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HumanePrevent suffering and maintain quality of lifeNo-one should be expected to risk life and limb in return for a contract of employment
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LegalHealth & Safety at Work Act 1974Variety of other Acts and RegulationsFailures can lead to:Enforcement noticesProsecutionCivil actions for compensation
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Is good health & safety good business?
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We recognise the importance of costing loss events as part of total safety management. Good safety is good businessDr. J Whiston, ICI Group SHE Manager
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Safety is, without doubt, the most crucial investment we can make, and the question is not what it costs us, but what it saves.Robert McKee, Chairman Conoco (UK) Ltd.
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Prevention is not only better, but cheaper than cureProfits and safety are not in competition. On the contrary, safety at work is good business.Basil Butler, MD British Petroleum plc
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We saved 750,000 on insurance premiums through improving our systematic management of health and safety.Birse Group plc
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Accident Costs IcebergUninsured CostsInsurance Costs
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Insurance CostsEmployers LiabilityPublic LiabilityProduct LiabilityMotor Vehicle
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Uninsured CostsProduct and material damageLost production timeLegal costsOvertime & temporary labourInvestigation time/AdministrationSupervisors timeFinesLoss of expertise/experienceLoss of moraleBad publicity
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Piper Alpha167 deadEstimated cost of over 2 billion
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GrangemouthBP refinery fire in 1987One person diedCost 50 million in property damageCost further 50 million due to business interruption
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HSE ExampleSmall engineering firm (15 workers)Workers sleeve caught on rotating drillBoth bones in lower arm broken12 days in hospitalOff work for 3 monthsAdmin duties for 5 monthsUnable to operate machinery for 8 monthsManaging Director Prosecuted2 employees made redundant to prevent company going out of business
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Costs to CompanyWages for injured worker over period= Lost production/remedial work required =Overtime wages to cover lost production =Wages for replacement worker=Loss of time of manager/MD=Legal expenses=Fines and court costs=Increase in Insurance Premiums=100008000300070004000300040006000Total cost to business = 45000
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HS(G)96Cost of AccidentsHSE Research5 Case Studies:Construction SiteCreameryTransport CompanyOil PlatformNHS Hospital
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Construction SiteConstruction of Supermarket12 month projectTotal losses of 700,000Equates to 8.5% of tender priceInsured to Uninsured = 1:11
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CreameryManufacture of dairy products340 staffTotal annual costs 975,336Equates to 1.4% of total operating costsInsurance to Uninsured = 1:36
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Transport CompanyFleet of tankers80 employees65 vehiclesTotal annual loss 48,928Equates to 37% of annual profitsInsurance to Uninsured = 1:8
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Oil PlatformNorth Sea100 staff on platformTotal annual loss 3,763,684Equivalent of shutting down the platform one day a weekInsurance to Uninsured = 1:11
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