Cost of Accidents
All injury cases, whether minor or major, result in financial loss to the organization in addition to irreparable loss for the family members in case of a fatal accident. The cost of accidents comprises two components: Direct cost and Indirect cost.
a. Cost of medical treatment; and
b. Compensation for loss of earning capacity/permanent disability/fatality
- Indirect costs pertain to:
a. Production loss and time loss of co-workers;
b. Idle time of machine and damage to equipment;
c. Loss of morale of workers in the unit;
d. Loss of time of supervisory personnel in submitting report/accident analysis;
e. Loss of efficiency of injured persons after reporting for duty;
f. transportation charges;
g. administrative and legal expenses;
h. company's reputation being at stake;
i. cost of training the substitute employee;
j. business interruption and failure to meet schedule; and
k. investigation by statutory authorities and penalties imposed by them.
Indirect costs usually vary from 5 to 11 times that of direct cost.