ICEBERG THEORY OF SAFETY...

WHAT DO ACCIDENTS COST YOU?

The ILO estimates that some 2.3 million people around the world are prone to work-related accidents or diseases every year which corresponds to over 6000 deaths every single day. Worldwide, there are around 340 million occupational accidents and 160 million victims of work-related illnesses annually.

In the event of an accident at work, many employers focus their efforts on looking at the immediate cause and reacting to ensure operations continue to run smoothly. It is often assumed that workplace accident costs are recoverable through insurance, but this is a misconception.

Accident and ill-health costs can be compared to an iceberg- costs that are recoverable are visible but those that are unrecoverable are hidden below the waterline and are many times greater. It is estimated that the hidden cost of accidents can be up to 10 times greater than the insured costs.

The costs to an organization are based on the Iceberg Theory of direct and indirect costs. Direct costs are insured costs and indirect costs are uninsured costs.

Direct (insured) costs include:

Medical costs
Employee compensation
Insurance premiums and deductibles
Death
Permanent disability and sick pay
Building damage
Tool and equipment damage
Production and material damage
Government fees and penalties
Legal fees
Indirect (uninsured) costs include: Hidden costs of the accident

Loss of experience and expertise
Cost of hiring and/or training replacement staff
Overtime to cover the work/shifts of an injured worker
Extra supervisory time
Lowering of morale, goodwill, image, etc.
Production delays and downtime
Canceled contracts
Increased insurance premiums
Investigation time
Time spent to process the worker’s compensation forms
Loss of product/process material damaged during an accident
Change in incident rates
It’s never too late to build a safety culture. It is important to invest in accident prevention because without adequate control measures in place, accidents will definitely cost you.

"An Ounce of Prevention Is Worth Pounds and Prevention is the key to Safety"

Article by Dr.Yashoda Tammineni,

MSc, Ph.D.

HSE,HOD at NIFS