Accident costs and economic impact

¶ … injury on the job could change everything in one's life. One day, one moment, one split second even and everything changes. This paper will explore briefly the aftermath of being injured while on the job. The parameters of the scenario are as follows:

the injury requires both hospital treatment and six weeks off of work convalescing and (2) the injury occurred due to negligence on the part of the person's employer. What are the direct and indirect costs of such an injury? What was the extent of the injury and how will it affect your functions in the future both at work and in personal life? How much responsibility should the organization take for the injury and what expense? Should your absence be billed back to the company? A rough estimate will be presented. Furthermore, the costs will be divided into two categories as follows: (1) the costs recovered from insurance coverage and (2) costs incurred by you personally during the scenario. How should you be compensated for something that may affect your life for an indefinite amount of time? Sometimes it is impossible to set a financial amount for such pain and suffering. It is the job of the organization to follow through on its responsibilities both legally and personally.

Employee Injury and Costs

Injuries can happen anytime and anywhere. It is estimated by HSE "over 1 million people suffer an injury at work each year. 7.3 million working days were lost in 2000/01 from people taking time off" (par. 1). When such events happen it can be difficult to assess blame and damages as costs quickly accumulate to remedy the situation. How does one put a quid value to their suffering and their loss of personal time as well as time away from work? An investigation of the injury is required to assess damages and compensation. It is clear in these situations, all parties suffer a loss of some kind rather financial or emotional. The following case study acts an example of a detailed cost analysis. It breaks down the expenses associated with a particular injury and surmises the overall picture of direct and indirect costs.

A young nurse leaves the hospital where she works after a long shift and trips over a delivery ramp owned and operated by the hospital. The employee suffered injuries to her back and neck. This injury required a hospital stay and a significant amount of time recovering at home. The organization calculated the total cost of the accident that caused the injury to be £15,130.00

HSE, par. 2). According to the British government each sector and/or profession has different scales of costs evaluated depending on the severity of the injury. By doing an incident cost analysis, one can determine the amount of funds the organization will spend. The following costs will directly and indirectly billed to the organization.

Incident Cost Calculator Results

TitleDealing with Incident (immediate action)

Time

Hourly Rate

First Aid hrs

Taking Injured person to hospital

3 hrs

Making the area safe of Incident hrs

15.00 n

Putting-out fires

Investigation hrs

Immediate staff downtime (e.g. work activity stopped) hrs

Staff time to report and investigate incident

4 hrs

Meetings to discuss incident

4 hrs

Time Spent with HSE Inspector

4 hrs

Consultant's Fees

40 hrs

Assessing/rescheduling work activities hrs

Recovering work/production (including staff costs) hrs

Cleaning up site and disposal of waste, equipment, products, etc.

Bringing work up to standard (e.g. product reworking time/costs) hrs

Repairing any damage/faults

Hiring or purchasing tools, equipment, plant, services, etc.

Salary costs of injured person

240 dys

Action to safeguard future business

Salary costs of replacement workers

240 dys

Lost work-time (people waiting to resume work, delays, reduced productivity, effect's on other people's productivity, etc.)

48 dys

Overtime costs

48 dys

Recruitment costs for new staff

Contract penalties

Reassuring customers

Providing alternative sources of supply for customers

Sanctions and penalties

Compensation claim payments thus far

Solicitor's fees and legal expenses

Staff time dealing with legal cases hrs

Fines and costs imposed due to criminal proceedings

Increase in insurance premiums

579 dys and 17.5 hrs

Table 1: Incident Costs. (HSE Form).

These costs do not even include what the employee may be losing due to the injury. As the case is still pending further direct and indirect costs may escalate due to court fees and further compensation due. A rough estimate of personal cost to the employee is as follows: