Document jyopngaQ7Gp8Xvj6d7Q0e0VRO

ACCIDENT INVESTIGATION, AN ALT SIS, AND COSTS ny can estimate its accident cost with rea sonable accuracy Every organization paying compensation insurance premiums recognizes such ex pense as a cost 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 others arise m connection with accidents Some, such as the cost of damaged equipment, are easily identified Others, such as wages paid to the injured employee for hours dur ing which he is not producing, are hidden These items comprise the uninsured ele ment of the total accident cost Insured costs can be determined easily from accounting records The difficult part is determining uninsured costs, and the method described here will serve that pur pose The first step is to make a pilot study to ascertain approximate averages of unin sured costs for each of the following four classes of accidents Class 1--Permanent partial disabilities and temporary total disabilities Class 2--Medical treatment cases requiring the attention of a physician outside the plant Class 3--Medical treatment cases requiring 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 requiring the attention of a physi cian, and which result in 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 costif in subsequent periods These costs then may be added to known insurance premium costs to determine the total cost of acci dents Example of cost estimate 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 in Table 10-A. TABLE 10-A PREDETERMINED AVERAGE COSTS Class of Accident Class 1 Class 2 Class 3 Class 4 Number of Accidents Reported 20 30 50 20 Average Uninsured Cost $ 60 00 19 30 280 12130 During the entire year, the company had 34 Class 1 accidents, 148 Class 2 accidents, and 4,000 Class 3 accidents No record was kept of the Class 4 accidents after the pilot study was completed Instead, the ra tio of Class 4 to Class 1 accidents found in the pilot study was used This ratio was shown to be about 1 to 1, and since there were 34 Class 1 accidents during the year, it was assumed there were about 34 Class 4 accidents (A separate record could be kept of the number of Class 4 accidents ) The average cost for each accident class was applied to these totals to secure the re sults shown m Table 10-B TABLE 10-B ESTIMATE OF YEARLY ACCIDENT COSTS Average Cost Class Number Per Accident Total of of (from Uninsured Accident Accidents pilot study) Cost Class 1 Class 2 Class 3 Class 4 34 148 4,000 34 $ 60 00 1930 280 12130 Total Uninsured Cost Insurance Premiums Total Accident Cost for the Period $ 2,040 00 2,85600 11,20000 4,124 00 $20,220 00 13,00000 $33,220 00 An estimate of costs made by one compa ny is given in the following example First, a pilot study was made to get the average cost of each class of accident Included in Since the final total is the sum of many estimates, it should not be stated in a way which suggests absolute accuracy Whether 10-13