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Direct and Indirect Accidents Costs. Presented by QBE Loss Control Services. Why Evaluate Accident Costs. Reliable costs needed for decision making Estimation of cost savings from safety expenditures Dollar savings may be more meaningful to management than incident rates.

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direct and indirect accidents costs

Direct and Indirect Accidents Costs

Presented by QBE Loss Control Services

why evaluate accident costs
Why Evaluate Accident Costs
  • Reliable costs needed for decision making
  • Estimation of cost savings from safety expenditures
  • Dollar savings may be more meaningful to management than incident rates
direct costs insured
Direct Costs (Insured)
  • Definite and known costs

-Worker’s compensation premium

- Costs for repair/replacement of damaged equipment/materials

indirect costs uninsured
Indirect Costs (Uninsured)
  • Other non-billable costs that result from internal systems adapting to the accident. Usually account for 70%-90% of the total true accident cost.
hidden costs of accidents
Hidden Costs Of Accidents

Direct Costs

Like This Iceberg, Hidden Costs Of Accidents Are Not Visible On The Surface, But Are There Just The Same!

Indirect

Costs

indirect costs
Indirect Costs
  • Wage of injured worker for part of day missed due to accident
  • Wage costs of other workers
  • Property damage not covered by insurance
  • Administrative costs
  • Litigation
loss of productivity
Loss of Productivity
  • Injured worker(s)
  • Malingering following injury
  • Damaged equipment
  • Damaged or lost product
  • Other employees time
  • Supervisors time
  • Rescheduling
loss of productivity1
Loss of Productivity
  • Subcontracting
  • Decreased production while new employee is trained
  • Down time
  • Interviews/investigation
  • Cleanup after accident
training
Training
  • Time
  • Development costs
  • Planned or unplanned
hiring replacement
Hiring Replacement
  • Interview
  • Orientation
  • Drug Test
  • Physical
morale consequences
Morale-Consequences
  • Poor safety practices
  • Work slows down
  • Poor workmanship (quality)
  • Lack of respect for management
legal costs
Legal Costs
  • OSHA Fines
  • OSHA- Cost/Time to correct violations
  • Legal

- Depositions

- Information Searches

- Attend court proceedings

human resources
Human Resources
  • Insurance forms
  • Accident investigation
  • Medical management
  • Recordkeeping
  • Finding light-duty jobs
direct vs indirect costs
Direct vs. Indirect Costs
  • Indirect Costs
  • Are from 2to 20Times
  • Direct Costs
did you know
Did you Know?
  • Claims reported more than 3 days after injury can add:
    • 16% to Medical Costs
    • 38% to Indemnity Costs
  • Claims reported more than 12 days after injury can increase the likelihood of Attorney Representation by:
    • 67% for Medical Claims
    • 69% for Indemnity Claims
sales required to pay for an accident
Sales required to pay for an accident

Profit Margin

1% 2% 3% 4% 5%

$1000

$5,000

$10,000

$25,000

Accident Cost