Introduction to injury costs

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 because of these injuries. Work injuries can happen in any business, whatever its size.

Examples

• An employee had half a finger amputated. He was polishing a metal component when his glove became caught on a rotating machine spindle. He was off work for around 10 weeks. The company costed the accident at just over £4000. This does not include any costs relating to the compensation claim (which is ongoing).
• A worker fell over a delivery ramp while walking in front of an office building. She injured her shoulder and was off work for two weeks. The company calculated the total cost of the accident to be £14 800.
• A farmer was changing the attachment on the back of a tractor. As he did this, his hand was crushed by it, causing severe injuries. Costs were incurred for 3 years following the accident. The net total cost to the family business was over £96 000.
• A butcher cut his hand on a knife left in an animal carcass by another worker. He needed hospital treatment and a week off work. The costs to the company so far are £351 plus 2.5 hours investigating the accident. There are ongoing legal costs.

Further examples can be found on the case studies database. If you wish to view this now, please click here.

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Costs of different injury types

A non-HSE study determined the average uninsured costs of certain injury types. The indicative values (uprated to 2003 prices) found were:

Accident Type	Base value at February 1997 £	Cost at April 2003 corrected for Retail Price Index change £
Causing absence from work	1911	2234
First aid	30	35
Damage only	129	151

Please click on the icon for further information about the data.

As these are uninsured costs, the employer must meet them.

HSE has calculated that for a serious or major injury, the typical cost to employers is about £17 000 to £19 000.

If you would like to see in more detail the costs for injuries that HSE has calculated, then for

• costs determined for different sectors, please click on data icon.
• costs determined for different occupations, please click on data icon.

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Working out your own costs

This website provides a tool to help you estimate what accidents might be costing your company each year. If you want to view this now, please click here.

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Time away from work following injury

The length of time people will be away from work following an injury depends on the type of injury they receive. It is difficult to predict how long a person may be off for any particular type of injury. However, information from the 2000/01 Labour Force Survey shows that:

• over a half (52.8%) of all people who are injured are off work for one or more days; and
• nearly a quarter (23.1%) of all people who are injured will be off work for more than one week.

If you would like to see the average length of time people are absent from work (if they take time off), for:

• average number of days taken off listed by industrial sector, please click on data icon.
• average number of days taken off listed by occupation, please click on data icon.

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But we haven't had many accidents

Your employees are less likely to be injured if you have good controls in place. Even so things can still go wrong. If you do not have good controls in place and have not had an accident, you have just been very lucky. But luck does and will run out.

It's not just the big accidents that cost you money. For every big accident there are likely to be lots of smaller ones. Each of these cost you money - and often more than the immediate and obvious costs.

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Accident pyramids

A number of studies have shown there is a statistical relationship between different accident types. This is often expressed as an 'accident pyramid'.

	- serious injury
	- minor injuries
	- property damage
	- incidents

What the exact ratios are between the different accident types depends on:

• how the accidents are defined;
• the type of accidents; and
• the industrial sector studied.

All the studies, however, agree that some form of accident pyramid exists.

If an organisation does not properly control risks, the outcome of an accident often depends on chance. Because the outcome of an accident cannot be accurately predicted, the only way to effectively reduce accidents is by controlling the underlying causes of all the different accident types. By tackling these underlying accident causes, the losses from all the different types of preventable accidents will be eliminated.

HSE undertook five studies, using a total loss approach, on accident costs. The results were published in 'The cost of accidents at work'. 8% of the accidents studied were judged to have had the potential for more serious consequences. These included fatalities, multiple injuries or catastrophic loss. Only luck prevented these accidents from being more serious than they actually were.

Most accidents have the potential to cause both property damage and personal injury. But not in all cases. Some injury accidents are unlikely to cause property damage. Some accidents, which cause property damage, have no potential to cause injury. Even though the latter do not have the potential to cause harm, they will still cost your organisation money.

Remember: if you have only had minor accidents so far, the next one could well be a more serious one.

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Definitions

On this website, the definition of an accident is 'any unplanned event that results in injury or ill-health to people, or damages equipment, property or materials but where there was a risk of harm'.

This is a narrower definition of an accident than that used in a total loss study, where there does not have to be risk of harm. But the above definition clearly focuses attention onto health and safety management. However, events where people are not hurt, but could have been, are considered to be a health and safety issue. A slight change in circumstances may have meant a person being harmed.

Accident costs can be divided into two types:

1. Financial costs: those additional costs incurred to achieve the desired output.
   For example:
• overtime payments;
• cost of repairs;
• cost of extra materials; and
• fines and penalties.

2. Opportunity costs: the costs of labour paid for no production. For example:
• salary costs of people waiting to work at an idle machine;
• people at home unable to work through injury; and
• costs for machinery running idle.

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Other Links

Accident Costs: work out yours