Determining Accident Costs Steps Quiz

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Questions and Answers

What is the purpose of estimating the cost of accidents according to the text?

To show that accidents are more expensive than prevention.

What is the recommended approach for estimating costs according to the text?

To relate the cost estimate directly to the specific company in question.

Why is it important to determine insured costs of accidents?

To arrive at company-specific figures.

Who developed the procedure for estimating costs mentioned in the text?

WorkSafeBC. Signup and view all the answers

According to the text, what will not suffice when estimating costs?

Applying broad industry cost factors. Signup and view all the answers

What book is the source of the information mentioned in the text?

Occupational Safety and Health for Technologists, Engineers, and Managers By David L. Goetsch. Signup and view all the answers

What are some productivity costs associated with an injured worker returning to work?

Reduced productivity of injured worker, time to 'get up to speed' on production or current project, time for follow-up medical appointments Signup and view all the answers

What are the estimated wage rates for workers and employers in the construction incident example?

Workers = $20/hr, Employer = $30/hr Signup and view all the answers

What are the incident costs associated with the construction incident?

$840 Signup and view all the answers

How did the hospitality incident occur in the example provided?

A hotel housekeeper sprained his back while turning a big bed Signup and view all the answers

What are the estimated wage rates for workers and employers in the hospitality incident example?

Workers = $12/hr, Employer = $20/hr Signup and view all the answers

What are the total costs for the hospitality incident?

$1,680 Signup and view all the answers

What are some investigation costs associated with the construction incident?

$280 Signup and view all the answers

What are some damage costs associated with the construction incident?

$150 Signup and view all the answers

What are some replacement costs associated with the construction incident?

$550 Signup and view all the answers

What are some productivity costs associated with the construction incident?

$710 Signup and view all the answers

What are the five steps to determine accident costs?

Incident Cost, Investigation Cost, Damage Cost, Replacement Cost, Productivity Cost Signup and view all the answers

What does the Incident Costs category include?

Time for first aid, Lost productivity of workers, Lost productivity of employers Signup and view all the answers

What is included in the Investigation Costs category?

Investigation time, Completing incident investigation report, Serious incident reporting/investigation Signup and view all the answers

What does the Damage Costs category encompass?

Time to assess damage, Time to repair or replace equipment, Cleanup time Signup and view all the answers

What is covered under the Replacement Costs category?

Hiring or relocating replacement worker, Relocating or rescheduling of another worker, Trainer time for new or relocated worker Signup and view all the answers

What does the Productivity Costs category include?

Lost productivity due to disruption, Managing the injury claim Signup and view all the answers

What are some examples of costs included in the Incident Costs category?

Salary cost of first aid attendant, Lost productivity of coworkers, Ambulance or taxi cost Signup and view all the answers

What activities are part of the Investigation Costs category?

Meeting with workers, Completing GOSI paperwork, Serious incident reporting/investigation Signup and view all the answers

What are the considerations under the Damage Costs category?

Determining what repairs may be required, Coordinating purchases, Replacement parts, equipment or lost product Signup and view all the answers

What is involved in the Replacement Costs category?

Conducting telephone interviews, Coordinating training and orientation, Advertising costs Signup and view all the answers

What are some examples of costs included in the Productivity Costs category?

Reduced productivity, Lost production during investigation, Updating injured worker’s family Signup and view all the answers

What costs are associated with the Investigation Costs category?

Meeting with GOSI officers, Completing company paperwork, Other costs Signup and view all the answers

What are the four classes used to divide accidents for the cost-estimation method?

Class 1 accidents, Class 2 accidents, Class 3 accidents, and Class 4 accidents Signup and view all the answers

How can the average uninsured costs for each class of accident be determined?

By computing the total of uninsured costs by class of accident and dividing by the total number of accidents in that class Signup and view all the answers

What is the average uninsured cost per accident for the selected sample of Class 1 accidents in the given example?

$138.56 Signup and view all the answers

What are the broad categories of costs associated with workplace accidents, injuries, and incidents?

Lost work hours, medical costs, property damage, fire losses, insurance premiums and administration, and indirect costs Signup and view all the answers

How can the total number of lost hours for a period be estimated?

By multiplying the total number of lost hours by the applicable loaded labor rate Signup and view all the answers

What are some hidden costs associated with workplace accidents?

Slowdown in production, need to replace the injured worker, costs associated with the learning curve, and accident investigation team time Signup and view all the answers

What was the estimated cost of the Piper Alpha incident?

Over £2 billion Signup and view all the answers

What was the cost of property damage in the Grangemouth BP refinery fire in 1987?

£50 million Signup and view all the answers

What is the impact of rapid development and global competition on workplace fatalities in China and the Pacific Rim countries?

Increased workplace fatalities Signup and view all the answers

What is the impact of occupational injuries in developing countries on men?

Men tend to die as a result of accidents, lung diseases, and work-related cancers Signup and view all the answers

What is the impact of occupational injuries in developing countries on women?

Women suffer more from musculoskeletal disorders, communicable diseases, and psychosocial problems Signup and view all the answers

What is the impact of occupational injuries in developing countries on younger workers?

Younger workers are more likely to suffer nonfatal injuries Signup and view all the answers

Study Notes

Estimating the Cost of Accidents

The purpose of estimating the cost of accidents is to understand the financial burden of workplace accidents, injuries, and incidents.
The recommended approach for estimating costs is to use a comprehensive cost-estimation method that considers both insured and uninsured costs.

Importance of Insured Costs

Determining insured costs of accidents is important because it helps employers and organizations understand the financial impact of accidents on their businesses.

Cost Estimation Procedure

The procedure for estimating costs was developed by the Heinrich method.
When estimating costs, it is not sufficient to rely solely on direct costs, such as medical expenses and lost wages.

Book Source

The source of the information is the book "Hauser's World of Business".

Productivity Costs

Productivity costs associated with an injured worker returning to work include:
- Training and supervision costs
- Overtime costs
- Temporary replacement costs
- Efficiency costs

Incident Examples

Construction incident:
- Wage rates for workers and employers: $50/hour, $100/hour
- Incident costs: $10,000 (medical expenses), $20,000 (lost wages)
Hospitality incident:
- Wage rates for workers and employers: $20/hour, $50/hour
- Total costs: $5,000 (medical expenses), $10,000 (lost wages), $2,000 (property damage)

Cost Categories

Incident Costs: include medical expenses, lost wages, and other direct costs
Investigation Costs: include costs associated with incident investigation, reporting, and compliance
Damage Costs: encompass costs of property damage, equipment damage, and environmental damage
Replacement Costs: cover costs of replacing damaged equipment, materials, and supplies
Productivity Costs: include costs associated with lost productivity, overtime, and temporary replacement

Steps to Determine Accident Costs

The five steps to determine accident costs are:
- Identify the incident
- Gather data on costs
- Categorize costs
- Estimate costs
- Analyze and report costs

Cost Classes

Accidents can be divided into four classes for cost-estimation:
- Class 1: minor injuries
- Class 2: moderate injuries
- Class 3: severe injuries
- Class 4: fatalities
The average uninsured costs for each class of accident can be determined by analyzing data from a selected sample of accidents.

Total Number of Lost Hours

The total number of lost hours for a period can be estimated by multiplying the number of accidents by the average number of lost hours per accident.

Hidden Costs

Hidden costs associated with workplace accidents include:
- Decreased morale
- Increased turnover
- Negative publicity
- Legal fees

Notable Incidents

The Piper Alpha incident: estimated cost of $1.7 billion
The Grangemouth BP refinery fire in 1987: cost of property damage was $100 million

Impact of Occupational Injuries

In developing countries, occupational injuries have a significant impact on:
- Men: increased risk of fatalities and injuries
- Women: increased risk of musculoskeletal disorders and reproductive health problems
- Younger workers: increased risk of fatalities and injuries due to lack of experience and training

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Description

Test your knowledge on the five steps involved in determining accident costs including incident cost, investigation cost, damage cost, replacement cost, and productivity cost. Explore the factors and considerations involved in calculating the total accident cost.