Direct And Indirect Costs Of Accidents At Work

In 1. Foundation, Health and Safety, IGC 1, Management, NEBOSH, NEBOSH IGC by EDCONS SAFETY INSTITUTELeave a Comment

Direct And Indirect Costs Of Accidents At Work 

When an accident occurs there are two types of costs that the organization may face:

1. Direct Costs

What are the Direct Costs?

Direct costs – the measurable costs arising directly from the accident.



Direct Costs:

  • Fines in the criminal courts
  • Compensation payable to the victim
  • First aid treatment
  • Workers sick pays
  • Repairs to, or replacement of, damaged equipment and buildings
  • Loss & damaged product
  • Lost production time whilst dealing with the injury
  • Overtime to make for lost time
  • Cost associated with the rehabilitation of the injured worker and
  • their return to work



2. Indirect Costs

What are the Indirect Costs?

Indirect costs – those which arise indirectly as a consequence of the event. Indirect costs are often difficult to quantify precisely and may be hard to identify.

Indirect Costs:

  • Loss of staff from productive duties in order to investigate the
  • incidents, prepare reports & undertake hospital visits Etc
  • Compliance with any enforcement notice served
  • Lost of staff morale (which impact on productivity & quality Etc.
  • Costs of remedial action following an investigation, e.g.
  • change of process or materials
  • Costs of recruiting and training temporary or replacement labor
  • General difficulties in recruiting and retaining staff as an indirect result of the accident
  • Loss of goodwill of customers following delays in production & fulfilling orders
  • Damage to the public image and business reputation
  • Damage to the industrial relations



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