Managing Accidents and Incidents
Nothing is more important or more tragic than the the human aspects of accidental loss in terms of injury, pain, sorrow, anguish, loss of body parts/functions, illness, disability or death.
Whether or not people are injured, accidents and incidents do cost money!
Interestingly, Neil's experience has identified that most accident investigations fail to identify the systemic failures or underlying contributing factors resulting in incorrect preventative measures being put in place leaving both the organisation and workers at risk of recurrence.
Most organisations do not know what accidents and ill–health really cost them in time and money. They are often surprised to find out what the actual costs are.
For example
- An injury to a worker using an unguarded drill cost a small engineering company $AU90,000. And that was not all. The managing director was prosecuted. Two workers had to be made redundant to keep the company afloat.
- At the other end of the scale the Piper Alpha explosion killed 167 people and incurred estimated costs of over $AU4 billion.
- Accidents in construction can account for 3% – 6% of total project costs.
The impact on organisations
What work accidents and ill–health will actually cost an organisation depends on several things, eg:
- how many people work for the organisation;
- how many incidents the organisation has;
- the sort of work the organisation does; and
- the value of the organisations materials, products or services.
The impact of the costs to the organisation depends on its annual turnover and where relevant, profit margin.
For companies who may be struggling economically any losses are serious.
Losing skilled workers, even for a few days, can have a bigger effect than direct financial costs might suggest. Many smaller organisations have little cushion against accidental losses. A serious accident could put them out of business. 60% of companies experiencing a disruption lasting more than 9 days go out of business.
Insurance Coverage
Many PCBUs (Employers) believe that most incident costs are covered by insurance. The reality is usually the opposite.
Insurance policies don't cover everything. They may only pay for serious injuries or damage. Or the policy excess may be greater than the individual amounts concerned. All other costs will have to be met by the organisation.
The most obvious cost is from a person taking time away from work. But there are other costs too. Often these are not readily apparent from the balance sheet.
Costs not necessarily covered by insurance
Many injury and ill-health costs are not covered by insurance. They 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;
- fines;
- loss of contracts;
- legal costs; and
- loss of business reputation.
The amount an organisation may actually recover depends on their individual insurance policy terms.
A safety management system, by its very nature, should be proactive and accident and or incident management must be guided by clear activities and standards which actively encourage compliance.
All personnel should be able to identify what types of situations are to be investigated, by whom and what time–frame is acceptable.
Those who investigate must be trained in suitable techniques, as with many management control activities, effectiveness requires training.
Effective investigations don't just happen — they are the results of a well-managed investigation process.
Ringshaw Consulting can provide Accident and Incident Management Services and or train your personnel in the appropriate Accident Investigation processes.
Either way our solutions will reduce your accident and incident related costs and increase your bottom line by identifying the true underlying contributing factors and making recommendations for remedial actions to be implemented. Resulting in improved systems, awareness, procedures, etc. On completion of the investigations process and implementation of corrective or remedial actions, the likelihood of recurrence will either have been eliminated or reduced.
The whole concept of Accident and Incident Management is to identify and control basic causes.
Contact Neil to discuss your Accident Management and or Investigation Training requirements.