Bryan,
Do you have any studies that show the true cost af an accident? Not one of those that blows things out or proportion, but a good one. I am doing a presentation and I want to show that for an accident that costs x dollars the company will need to generate XXX dollars in additional revenue. I have a pamphlet that talks about it, but I would like to see some type of report that spells out what the indirects costs of an accident are.

If anyone else has a report like this they can post it here as well. I just figured Bryan would have something. Have you seen his website? Amazing!
Scott

Sounds like a good topic for discussion

Bill

Some of thestudies that I have seen and rememer about accident costs show the indirect cost several times higher than the direct costs.
Indirect costs include but are not limited to
Loss of production from the injuried personel and damaged/ destroyed equipment,
Loss of time necessary to investigate the accident,
The time costs of accident investigators and any witnesses,
The time costs of supervisors and managers dealing with accident results and reporting,
The costs of any accident responders eg. fire and ambulance,
The cost in time of people who stop thier work to rubber neck and then discus what happened when those individuals are not involved with the accident or the response to it,
The costs of any Safety board type of action and or litigation from the accident,
Perhaps lawyers and other fees incurred,
Raised insurance premiums.

Of course you can have one difficult time finding out what or how much any of the above actually costs.
Direct costs arer usually easier to find but all the costs will not be apparent for some time. For example medical costs can take months to be incurred depending on the severity of injuries.

When I was a Saftey NCO in the USAF, I always figured indirect cost at at least 10 times direct costs. But I did not have to worry about various of the indirect costs above (eg lawyers fees and litigation costs).
Some of the studies I have seen since place indirect costs at 10 to 50 times the direct costs depending on circumstances.
This is a topic that has had a lot of conflicting opinions. The only real point that any presentation should get across is that an accident is a blank check on the company's bank account. The actual cost will be expensive.
Good luck

Scott,
What a question you ask,
It's a good'un!.
If the true cost of a Work place accident could be put down to a single arbitary figure, it would make the job of Safety people a helluva lot easier.
But, it really depends on what sort of accident we are talking about here, there are so many variables involved in a single particular accident, that it makes it hard to assess how much it will cost to re-habilitate a given victim, back to health(where this is possible).
We would all like to see a report on the indirect costs of a Workplace accident and I would actively seek the advice of Bryan on this one!.
Statistics only serve to muddy the waters, in these sorts of areas.
One thing that I would like to see figured into the equation is, the loss of income to a bereaved family when a worker is fatally injured or incapacitated enough to dis-allow further work.
Providing PPE and Safety training, is a lot more in-expensive(in monetary and emotional terms) than the loss of a fellow worker to injury/death!.

Thanks guys,
Yes I know that there are direct and indirect costs of an accident. I have seen several some studies about this. They vary widely, the range of indirects costs is from 4 times to 50 times the direct cost. However I think that the indirect costs would be a larger percentage for a smaller injury, say one that only costs $200. Most of our accidents are in this range (knock on wood).

I have to give a presentation to the president of a company that we opened up in Korea. Their views on safety are, shall we say softer than ours. I want to show, in writing, a detailed study that shows the indirects costs and what they are. Then show that to make up for a $200 accident you will need around $10,000 in additional sales to make up for that accident. These numbers are made up and off the top of my head. This is one way to "sell" safety to management. Fortunately I don't have to do this with our management.

I thought that Bryan might have some good information.

Scott

I don't remember where it came from but I did save a chart that I got from one of my training classes and now use it for my own training classes. The amount of rework required to make up for incident/injury losses depends on the profit margin required by the employer. I tried pasting the chart on this forum board, but could not get it to work, so here is my best attempt without a tables chart.
If you work at a 3% profit margin, $1,000 in yearly losses will require $33,000 in new work to make up for the losses. $5,000 in yearly losses will require $167,000 in new work to make up for the losses. $10,000 in yearly losses will require $333,000 in new work to make up for the losses, etc. Other profit margins would be calculated similarly. Most common indirect costs I've seen are rework, down time, replacements, training and company image, but these are very hard to put into a calculation model. If you would like a copy of the full chart, I would be glad to e-mail it.

Well I kind of answered my own question. Check out this link. http://www.mcci-safety.com/estimate.htm If you know what your profit margin is, but don't know what your sales or profit are you can enter the profit margin as total profits and sales as 100. Example 15% profit margin. Total profit = 15, Total sales = 100.
Scott

OSHA has one very similar @
http://www.osha.gov/SLTC/safetyhealth_ecat/mod1_estimating_costs.htm

Liberty mutual and DuPont both have one as well. All three will give a bit of a different answer, but all are within acceptable tolerances.

Thanks all,
I gave the presentation yesterday, and it seemed to go well. Especially with the fact that, unfortunately, the average cost of an accident from our parent company is $6,950. This means additional sales of over $118,000 to cover the cost of each accident.
Scott

Scott,
With the arbitary average figure of $6950, what does this actually take into account?.
This is a rather low figure, in my way of thinking.

great corporate commentary, now tell me how one would use the same premis to convince state officals that safety is to the benifit of the average Joe bag-o-donuts homeowner.........

Trumpy,
The figures of $6,950 comes from a report from our corporate office. They have over 90 companies. So I felt comfortable using that number. Don't forget that while the major focus is on serious accidents, there are many smaller accidents that occur. There was a study that shows that for every serious accident there is about 300 less serious accidnets (cut fingers, strain to the wrist...)

My job is to eliminate all accidents
Scott

Scotts,
I am not disparaging the serious/minor accident ratio for a second.
However, I'm not too sure about eliminating ALL accidents, even small ones come down to inattention, stupidity(that could also hold true for the majority of Serious Accidents, because why, would you get anywhere near a machine that could start-up, with the flick of a Pressure Switch)and just plain ignorance of any safety systems!.

True Trumpy True,

How to eliminate all accidnets???? Wow good question. However I like to tell the employees that I want to eliminate all accidents to show them that is my ultimate goal. Before I started as the safety guy the offical co. goal was to stay below an incident rate of 11.3. However I don't think it is acceptable to say, "We only want 6 employees hurt this year." I want the employees to know that I don't want any of them to get hurt.

Inattention. So true. However let me tell you what happened at our work. We had a good year last year, but the wheels fell of the wagon this year. So I called a special tool box meeting and told them that I did not know what to say. This was the same employees who had a great year last year, however this year we had already had more accidents in the first 4 months than we had all last year. Someone at my wife's work was complaining that they had a bad day. She told him when he has a bad day, he breaks a part, when I have a bad day at work people get hurt. I told them this quote and also that most of the accidents we had this year were caused by inattention. Since then we have been on a roll. Since that day we have not had an accident and that was over 120 days ago (Knock on wood)

I remember the first time that I told the employees that I would like to go a whole year with no accidents. They looked like I was crazy and some of them said that it could not happen. My response to them was "Why?" Total silence. I told them that if anyone was planning on getting hurt to come to my office and we could talk about it. I told them that I truly believed that we could go a whole year with no accidents. We almost did it last year. 239 days.

BTW Trumpy, got your e-mail. I will reply, but I thought that this was appropriate for others to see.
Scott

[This message has been edited by Scotts (edited 07-23-2003).]

Scotts,
That's fine by me!.
The concept of Tool-box meetings was a totally new thing to me as a Trainee Line Mechanic, but that was (and is) the culture that prepares us guys to perform a certain task, efficiently, safely and with the minimum of fuss or accidents.
At a typical Tool-box meeting, amongst us, everyone works out who is going to do what, in accordance with the Line Clearance, who is going to be where at a given time and what they will be doing.
It's almost done like Military Tactics planning, but having said that, I have NEVER, been involved in a single Live-Line accident yet!.
Over here, the very strange thing is, the Tool-box meeting has not filtered over in to the Construction Industry(that has a shocking accident record that has to be read to be believed), but I suppose they're too "tough" to have a wimpy tool-box meeting!.