Document 07nvd0Q1JOZ11MxOe37zXNzO

savings are as meaningful to higher manage ment as those which use frequency and sever ity figures Facts about the costs of accidents may be used effectively m securing the active cooperation of foremen Foremen are usually cost conscious because they are expected to run their departments profitably Monthly reports showing the cost of accidents or the savings resulting from good accident records are an important motivation to achieve safe operating procedures Definition of work accidents for cost analysis Work accidents, for the purpose of cost analysis, are unintended occurrences arising out of employment These accidents fall into two general categories (a) accidents re sulting in work injuries and (b) accidents that cause property damage or interfere with production in such a manner that personal injury might result The inclusion of the no-injury accidents makes "work accident" roughly synonymous with the type of occurrences a safety depart ment strives to prevent Method for estimating To be of maximum usefulness, cost figures should represent as accurately as possible the specific experience of the company itself A fixed rabo of indirect to direct costs devel oped from experience represenbng many different companies in many different indus tries does not serve such a purpose Esti mated costs of accidents in general do not take into account differences in hazards from one industry to another or the more impor tant differences m safety performance from one company to another Since the distmcbons between "direct" and "indirect" costs are difficult to maintain they have been abandoned m favor of the more precise terms "insured" and "unin sured" costs Using these data, a company can estimate its accident cost with reasonable accuracy Insured costs Every organization paying compensation insurance premiums recognizes such expense as part of the costs of accidents In some cases, medical expenses, too, may be covered by insurance These costs are definite, and they are known They comprise the insured element of the total accident cost In addition to these costs, many other costs arise m connechon with accidents The cost of damaged equipment is easily idenhfied Others, such as wages paid to the injured em ployee for hours during which he is not pro ducing, are hidden These items comprise the uninsured element of the total accident cost Uninsured costs. Insured costs can be determined easily from accounbng records The difficult part is determining uninsured costs, and the method described here will serve that purpose The first step is to make a pilot study to ascertain approximate averages of uninsured costs for each of the following four classes of accidents Class 1 --Permanent partial disabilities and temporary total disabilities Class 2--Medical treatment cases requinng the attenbon of a physician outside the plant CLASS 3--Medical treatment cases requinng only first-aid or local dispensary treatment and resulting in property damage of less than $20 00 or loss of less than 8 hours' working time Class 4 --Accidents which either cause no injury or cause minor injury not requinng the attention of a physi cian, and which result m property damage of $20 00 or more, or loss of 8 or more man-hours Once average costs have been established for each accident class, they may be used as multipliers to obtain total uninsured costs in subsequent penods These costs then may be added to known insurance premium costs to determine the total cost of accidents Example of a cost estimate An estimate of costs made by one company is given in the following example First, a pilot study was made to get the average cost of each class of accident Included in the study were 20 Class 1 accidents, 30 Class 2 accidents, 50 Class 3 accidents, and 20 Class 4 accidents Costs were determined and averages developed as m Table 12-B During the enbre year, the company had 281