Financial Cost of Accidents

There are many costs associated with running a business, some are obvious like heating and lighting, but others are hidden more deeply within the books, and often overlooked. The true costs of workplace accidents, and accident investigation is just one example of those.

There are two main costs associated with accidents; human and financial. Some of these costs are easy to quantify, others less so.

Listed below are some of the financial costs that may arise from a road traffic accident in one of your vehicles. Authorities have now stopped using the term "accident" believing that accidents don´t just happen, they are a series of unplanned events, that may have been prevented by good management and prior risk assessment.

We shall look at the HUMAN COSTS on the next web page.

When a road traffic accident occurs, its easy to calculate the following costs which can range from £3500 for a relatively minor accident, up to around £30.000 for a major accident (HSE 2011)

1. The cost to the driver involved in dealing with any punishment, fines, court cases, possible cost of providing alternative transport if a driving licence is lost
2. The costs of the damage to your vehicle, making good any repairs or replacements, finding a new vehicle
3. The cost of the damage to the third party vehicle or property, and the paperwork trail that occurs in dealing with this matter.
4. The cost of paying for solicitors, doctors and other witness's to attend court.
5. The cost of paying sickness benefit for injuries possibly sustained by staff, or the hiring of temporary staff, or of paying overtime to others to cover for the absentee.
6. The potential value of a lost contract, because an employee failed to arrive because of a road traffic collision
7. The cost of possible increased cost of insurance premiums, loss of no claims bonus, or the penalty of having an increased excess.
8. The fact that if an employee or their dependants take the employer to court following a serious or fatal accident, on charges of corporate manslaughter, fines against the organisation can be virtually unlimited in size.
9. Notwithstanding the above, an employer or dependants could make claims personally against a Director or Senior Management for negligence, which could result in that person facing personal ruin or conviction if found to be in serious breach of care.

These financial costs are easy to quantify, and because they are only cash in real terms, they can be replaced quite easily through more care and effort,but losing or wasting money in a business, is not what its all about. money is the life-blood of a business.

A business that effectively manages workplace transport risks, can benefit from:

1. Reduced loss through damage, injury and people off work.
2. Increased resale values on replacement vehicles.
3. Better insurance rates.
4. Avoiding compensation payments, fines and legal costs.
5. A protected reputation.
6. Improved employee morale.
7. General improvements in working practices that result from a planned and sensible approach to safety, which can lead to improvements in productivity.

Although loss of profit hurts, there is a much greater degree of suffering, have a look at the human costs after an accident.