According to Eurostat (2010), the EU-27, in 2007 there were 5,580 fatal work injuries, and 2.9% of workers suffered some kind of accident that caused them to miss work three or more days. In this post we will describe the categories of costs that we should value and provide data from scientific studies that have established a cost for accidents.
As safety consultants, we are often faced with the difficulty of raising awareness among employers of the need for safety measures due to the “high costs” they may entail.
This high cost is in quotation marks because the first concept to try to teach business people is that safety is not a cost but an investment.
That sentence is very nice, but not a dogma of faith, therefore we must be able to prove it with numbers, seriously and objectively, and that the costs of accidents are not only in business but they affect society in general.
An accident is a cost to the company, everyone in the world agrees with this, but we must not stop with only the direct cost of the accident, but we must assess many other aspects:
- Productivity costs
These costs are associated with lost productivity or production stoppages directly related to the accident. Here we can also assess the lost time as a result of injury or illness with regard to salary.
- Healthcare costs
Medical costs, including both direct (for example, pharmaceutical products, hospitalization, rehabilitation, etc.) and indirect (for example, time spent by caregivers)
- Costs associated with the loss of quality of life
Economic valuation of the loss of quality of life, such as physical pain or suffering.
- Administrative costs
Administrative costs, such as social security payments or accident notification, work site inspection, etc.
- Actuarial costs
Insurance related costs, such as compensation, insurance premiums, surcharges, fees, etc.
These different cost categories should also be considered for all the different interest groups affected:
a) The workers themselves and their families
This would include not only the individual affected by the accident or illness, but also their close relatives or friends, who are also affected by the injury or illness.
b) Business people
This would include the company or organization that the affected individual works for.
c) The government
The relevant public authority responsible, for example, for social security benefits.
THE COST OF ACCIDENTS
Among the studies that have been done to calculate the cost of accidents, I would highlight two:
Cost of accidents to the economy of the United Kingdom:
2006/2007 period: 16,500 million pounds (€ 20,600 million) (1.2% GDP)
2009/2010 period: 14,000 million pounds (€ 17,500 million) (1.2% GDP)
2010/2011 period: 13,400 million pounds (€ 16,800 million) (1.2% GDP)
Cost of accidents to the Australian economy accounted for, in the 2008/2009 period, 60,600 million Australian dollars (€ 42,000 million) (4.8% GDP)
The variation of these estimates leads us to not assess the overall figures in themselves, but to assess the range of magnitude entailed by the inadequate planning of safety measures or a lack thereof on the overall economy.
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