Beyond the life-changing impact on employees, workplace incidents can mean crippling financial burdens for businesses.
A dangerous misconception
In the event of an accident, many employers focus on immediate solutions to get business back on track. Rarely do companies get to grips with an incident’s root cause – and the long-term price of a short-term fix.
It’s often assumed that workplace accident costs are recoverable through insurance. But that’s a misguided notion.
The financial impact of accidents and ill-health can be likened to an iceberg: recoverable expenses that are readily visible, and unrecoverable – far more significant – damages concealed below the surface. The HSE estimates the hidden cost of accidents can be up to 10 times greater than the insured costs.
Uninsured costs can include:
- Lost time
- Sick pay
- Damage or loss of product and raw materials
- Repairs to plant and equipment
- Extra wages, overtime working and temporary labour
- Production delays
- Investigation time
- FFI or prosecution fines
- Loss of contracts and damage to reputation
- Legal costs
This hidden expenditure comes out of company profit. And as accident losses increase, so will your insurance premiums. It’s clear that directly and indirectly, accidents reduce profitability.
Invest in prevention
On the positive side, there are definite hidden savings to be achieved through proactive risk reduction.
To keep your bottom line buoyant, we advise effective investment in accident prevention. Begin by reviewing your incident statistics and speaking to the ‘boots on the ground’ to see how and where it’s best to invest.