22 Questions
What is the minimum cover required for Employers' Liability Insurance in the UK?
Five million pounds
What type of costs are concerned with the immediate expenses of an accident?
Direct costs
According to the Employers' Liability (Compulsory Insurance) Act 1969, who is responsible for the health and safety of employees at work?
The employer
What type of costs are concerned with the less obvious expenses of an accident?
Indirect costs
Why is it important to prioritize health and safety in the workplace?
To prevent accidents and injuries, and reduce both direct and indirect costs
What type of insurance is required by law in the UK for employers?
Employers' Liability Insurance
What is the main difference between insured and uninsured costs?
Insured costs are concerned with immediate expenses
What is the purpose of highlighting the financial costs of incidents to management?
To convince management to invest in health and safety
What is an example of a direct uninsured cost resulting from an accident?
Lost production time
What is the estimated proportion of uninsured costs compared to the actual incident cost?
Ten times the amount of the actual incident
Which of the following is an indirect uninsured cost resulting from an accident?
Loss of expertise/experience
What is a potential cost to the engineering firm as a result of the accident?
All of the above
What is one of the benefits of a motivated workforce in terms of organisational image and reputation?
Development of goodwill and stronger relationships with other organisations
Why did the Managing Director of the engineering firm get prosecuted?
Due to the company's failure to prevent the accident
What can organisations achieve by demonstrating compliance with health and safety regulations?
Lower insurance premiums
How long was the employee unable to operate machinery after the accident?
8 months
What is a consequence of ineffective health and safety in an organisation?
The need to tender for new business
What is one of the indirect costs associated with accidents?
Repair or replacement of damaged machinery
What is an example of uninsured costs that can affect the company's reputation?
Loss of morale/bad publicity
What is the result of an inspector's visit to a site with a history of incidents?
A Fee for Intervention (FFI) from the HSE
Why is it important for organisations to check their insurance policy?
To understand the scope of cover
What is one of the benefits of effective health and safety in an organisation?
Boost in motivation within the workforce
Study Notes
Morals & Money: Financial Costs of Incidents
- Employers' Liability Insurance is mandatory in the UK, with a minimum cover of £5 million, as required by the Employers' Liability (Compulsory Insurance) Act 1969.
Direct and Indirect Costs of Incidents
- Direct costs include immediate expenses such as equipment damage, worker absences, fines, and compensation, some of which may be insurable.
- Indirect costs include less obvious expenses like replacement labor, cleanup, lost sales, and workforce morale, which cannot be insured against.
Insured and Uninsured Costs
- Insurance policies only cover a small proportion of the costs of accidents, with uninsured costs estimated to be about ten times the amount of the actual incident.
- Uninsured costs include indirect expenses like equipment repair, hiring temporary labor, and lost productivity.
Benefits of Effective Health and Safety
- Effective health and safety can improve production and product quality, boosting workforce motivation and reducing staff turnover.
- A motivated workforce and improved productivity have a positive impact on the organization's image and reputation, leading to stronger relationships and increased business.
Consequences of Ineffective Health and Safety
- Ineffective health and safety can lead to costly tendering for new business, lost productivity, and damaged reputation.
- Insurance issues can become less costly through compliance, leading to lower premiums.
- Internal resources are not drained due to accident and incident investigations, court attendance, and enforcement officer visits.
Learn about the financial costs of incidents, insured and uninsured, and the benefits of prioritizing health and safety in the workplace.
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