Risk assessment training

The financial costs of poor health and safety

If you've got business insurance that covers injury, sickness or damage after an accident, you'll probably only get a payout in the event of a serious accident. Even minor accidents can have high costs though, many of which are hidden. There's also lots of other hidden costs after any accident that your insurance won't cover, however serious it is. Some of these costs are listed here:

1. Sick pay and temporary staff
   Needless to say it's costly to pay for work that's not going ahead or paying twice for the original job to be done. If your workforce is reduced there's also extra pressure on everyone else to compensate - and if people hurry or take shortcuts to get the job done, there's the chance that further accidents or health problems occur.
   
   
2. Production delays and loss of earnings
   While your workforce is down your business will suffer financial losses. If your business relies on contracts, this may be even more significant if you lose them due to delays.
   
   
3. Damage to stock or equipment
   If equipment, machinery, raw materials or products are involved in any accidents, the damage or loss can be very expensive.
   
   
4. Civil action
   Even if your insurance company pays out if someone is injured at work, you may have to pay high legal costs if that person decides to bring civil action against your business. Civil action and blame culture is very commonplace now.
   
   
5. Insurance premiums
   Your insurance premiums will almost always increase after a claim. Some small companies can find themselves un-insurable after an accident.
   
   
6. Poor reputation
   Poor health and safety translates to a bad reputation for both your business and also you as a responsible manager.
   
   
7. Prosecution and fines
   If your business doesn't meet legal health and safety requirements and you're inspected by an enforcement officer, you will be issued with an improvement notice which you will have to comply with. This means you'll have to meet the financial costs of health and safety improvements somewhere along the line, so you might as well do it sooner rather than later. If you don't comply with an improvement notice, you may be prosecuted and ordered to pay costs and fines, which will be even more expensive.