Costs in Safety

Costs in Safety The Measurements of Costs In the safety domain sooner or later you will come across expressions of costs, the costs of accidents, the costs of preventing accidents, the costs of producing a safety case etc. These are all different costs, even though they look like they might be the same. Or nearly the same at least. The cost of an accident should comprise only the direct costs of the event itself, the material, equipment and vehicles lost, the cost of emergency service attendance and any environmental cleaning required. A further factor that might be considered here is the cost of any penalties or fines. The cost of preventing an accident is different from the direct cost of an accident. It does not represent the actual costs incurred, it is the cost-benefit value and actually represents the benefits which would be gained by the prevention of the accident. This cost is better described as a value, and should incorporate such things as lost domestic product output, human or social factors in addition to the direct cost groups noted above. The cost of producing a safety case is not related to having or not having an accident. You might think that having a safety case should prevent accidents, well in a sense this is true. There is evidence of safety cases reducing hazards and accidents, but it cannot be said that having a safety case is evidence for avoiding accidents. The development of a cost for producing a safety case will be dealt with later in this book, so for now the text will concentrate on the cost of having accidents and the value of preventing an accident. The Cost of Having Accidents The Health and Safety Executive has performed an excellent series of case studies on UK industry. Multiple industry sectors have been closely analysed over relatively short time periods and the accidents and incidents that occurred have been fully costed out to demonstrate the financial impact of having an accident. Incidents at a National Health Hospital [ HSE 2002a] The study took place at a 367 bed hospital employing around 700 staff. The accident criterion for this study was any unplanned event that resulted in injury or ill-health to people, damage or loss to property, materials, products or the environment, or loss of opportunity to provide a service or treatment. The study

lasted for 13 weeks. There were 1232 reported accidents, six over-three-day injuries, 19 other injuries to staff, 38 injuries to patients and one to a visitor. Financial costs were £63,224 Opportunity costs were £66,045 Many of the losses were directly attributable to poor preventative maintenance of equipment, plant and buildings. 78% of the personal injury accidents occurred in the care for the elderly wards. On an annual basis, the total costs represented 5% of the hospital annual running costs. Incidents on a Large Construction Site [HSE 2002b] A supermarket was being constructed by a main contractor and 29 subcontractors. The study covered 18 weeks spanning the ground works and roofing stages. The accident criterion used was any unplanned event that resulted in injury to people, damage or loss to property, products, material or the environment or a loss of business opportunity. There were 3825 accidents including 56 minor injuries, there were no major injuries, dangerous occurrences (near-misses) or three-day injury accidents. Financial costs were £119,519 Opportunity costs were £222,294 £13,175 of the financial costs were the result of lost materials, the total uninsured losses for the main contractor were £102,825. The contribution to the total costs for the actual 65 injury accidents was only £580.50. Incidents at a Financial Administration Company [HSE 2002c] The study was conducted at a financial services organisation involved in cheque clearance processes. This was an office environment where the main activities were working with display screen equipment, manual handling and clerical duties. The accident criterion used for this study was personal injury and loss. The costs also include the impact of providing cover for absent staff. The study was over 13 weeks, there were nine injury accidents and four workrelated ill-health absences. Total cost was £22,822 Seventy percent of the total cost was due to the ill-health events, which represented an average cost of over £3000 for each case. The total cost represented 0.5% of the annual salary bill.