What are the true costs of an industrial accident?

Safety at work is a fundamental aspect in any industry. However, we often underestimate the true costs of an industrial accident. Beyond physical injuries and compensation, there are numerous hidden or indirect costs that affect companies and society in general.

The human and economic cost of industrial accidents.
The statistics are clear: According to the International Labour Organization, more than 2.78 million workers worldwide die each year due to workplace accidents or occupational diseases, and approximately 374 million suffer non-fatal occupational injuries. These figures represent an unacceptable human tragedy. But in addition to the human cost, industrial accidents also impose a significant economic burden. Poor occupational safety and health practices are estimated to account for nearly 4 percent of global gross domestic product annually.
Direct and indirect costs of occupational accidents.
When analyzing the cost of an accident at work or considering the return on investment in safety technology, it is essential to understand that the overall costs of workplace accidents and occupational diseases go far beyond what is observed in the short term. They are divided into direct costs, which imply immediate cash outflows, and indirect costs, which do not represent immediate expenses but impose additional expenditures on the company's operation.
Direct costs:
• Compensation payments.
• Medical expenses and treatments.
• Legal and general charges.
These costs are usually covered by insurance companies through compensation premiums.
Indirect or hidden costs:
• Cost of lost time for injured workers.
• Cost of time lost by other non-injured workers, who stop working out of curiosity, sympathy or to help the injured worker.
• Cost of time lost by supervisors or executives.
• Cost of time spent by first aid personnel or nursing unit members when not paid by the insurance company.
• Costs due to damage to machines, tools and property.
• Cost due to interference with production, failure to fulfill orders on time, loss of bonuses, payment of penalties.
• Cost of continuing to pay full wages to employees even if they work shorter hours after returning to work.
• Loss of profit due to worker productivity and having machinery not operating.
Different perspectives on insured and uninsured costs.
Simonds' approach (1955) argues that the distinction between direct and indirect costs based on the type of accident is inappropriate. Instead, he proposes to categorize them as insured costs (borne by insurance companies) and non-insured costs (borne by the company and society). This simplifies the understanding of the costs associated with workplace accidents.
The Elements of Production Method, similar to the previous one, breaks down costs into five productive factors:
• Cost of labor: reflects the cost of the time of the workers involved in the accident.
• Cost of machinery and tools: covers expenses for damage to machinery and tools.
• Material costs: considers losses of raw material, in the manufacturing process and finished products.
• Cost of facilities and equipment: addresses costs for damage to buildings and facilities.
• Time costs: represents the cost of working hours lost due to the accident.
The sum of these costs weighted by the time lost in production forms the total cost.
The profitability of investing in occupational health and safety.
Safety technology plays a key role in reducing these costs. Investing in prevention and protection measures not only saves lives, but also improves worker performance, productivity and well-being.
In short, the true costs of an industrial accident go beyond injuries and compensation. They include human, social and economic costs, as well as direct and indirect costs. Investment in safety technology and accurate data collection are essential to mitigate these costs and ensure a safer and more productive work environment. Safety at work is not only a moral duty, but also a smart investment.