Accidents in the workplace are a source of concern for all employers. They not only jeopardize the health and safety of employees, but they also cost the organization a lot of money. Because there are so many indirect and hidden expenses, most companies are unaware of how much an accident will cost them. Let’s look at the total cost of workplace accidents, including direct and indirect expenses, to appreciate better why it’s so vital to avoid the accident and the consequences.
Accidental Expenses In The Workplace:
Many businesses budget for the immediate costs of an accident, which are often covered by insurance; nevertheless, this is just a tiny part of the total cost of an accident. The fact is that the indirect costs of workplace accidents are significantly larger than the direct expenditures, which are sometimes not covered by insurance.
Let’s use the example of an iceberg to help us comprehend this better. The visible section of the iceberg is what we see when we gaze at it. This represents just around 10% of the total iceberg. The remainder is submerged and out of sight. Below are descriptions of the two primary categories of expenses and some famous instances.
Costs Incurred Directly:
Insurance typically covers the immediate expenses of workplace accidents. They include the afflicted employee’s medical expenditures, the costs of prescription drugs and therapy, and the compensation payout paid to the wounded employee, among other things. In other words, these are expenses incurred directly as a result of the disaster. They are simple to compute.
Costs Incurred Indirectly:
Indirect costs of workplace accidents, on the other hand, are expenditures that are not directly related to the accident. These expenses are typically far higher than direct costs, with some studies stating that for every $1 indirect cost, there are $3 to $10 in indirect costs.
When it comes to workplace accidents, it’s simple to add up the immediate expenses and move on. However, it would be best to consider the indirect costs and repercussions of a job accident. For more information on the costs of workplace injuries, see OSHA’s Business Case for Safety, which includes tools to help you estimate how much an accident will cost, and get advice from an expert like Trent Bond.