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The first thing that might spring to mind when we talk about the cost of something is money. But of course, money isn't everything, even in business. And an accident at work can cost more than money - it could cost your life. There are many reasons other than financial to avoid accidents, such as preventing harm and suffering, complying with legal requirements and, just simply doing the right thing.

So while we are mostly talking about financial costs in this article, let's not forget that there is also a human cost of accidents, and we will also cover that later on (in the hidden human costs section).

But focusing back on the financial costs of accidents at work, the financial argument for preventing accidents is pretty compelling by itself. In a study by the HSE, they found hidden indirect costs are usually 10 times, and can be up to 36 times, greater than the direct costs from an accident. While the study in no longer available online, it forms the cornerstone of the financial argument for health and safety in most management books and is demonstrated more recently in the HSEs Costs to Great Britain statistics .

Direct costs of accidents

Direct costs from an accident, are the costs directly related to the accident. And your business insurance may cover some direct costs, but it won't cover all of them. For example, your insurance won't cover fines or sick pay. It's often assumed that business insurance will cover all accidents costs, but this is far from the truth. I'd go as far as to say it's a health and safety myth .

Uninsured costs can outweigh the insured costs - and these uninsured costs come straight off your company's 'bottom-line' profits.

Direct costs of accidents may include:

• Damage to materials
• Damage to equipment
• Damage to buildings
• Compensation
• Sick pay
• Fines

For some minor accidents, there might be no direct costs at all, but you can be certain there will be some hidden costs involved.

Indirect (hidden) costs of accidents

In what is often referred to as an 'accident iceberg', the majority of the costs from an accident are hidden below the surface. And just like the titanic, they can sink your business, and indirect costs are unlikely to be covered by insurance.

• Delays to the project or production line
• Cost of overtime to recover delays
• Loss of knowledge
• Loss of skills
• Loss of experience
• Cost of temporary workers needed to replace injured staff or to recover lost time
• Reduced output while getting new team members up to speed
• Cost of time spent on accident investigation
• Additional administration work
• Enforcement
• Damage to business reputation
• Lost orders and contracts
• Increased insurance premiums

And there's more. While the above indirect costs are the burden of the business, the individual will also have financial costs relating to the accident. The financial cost to individuals includes lost employment income and out of pocket expenses like prescription charges, additional travel and living costs, increased insurance premiums, home modifications etc.

Figure 6 shows that over half of the total cost in 2017/18 fell on individuals , whilst the remainder was shared between employers and government – a similar profile as in earlier years.

The human cost

So far, we have talked about the financial cost of accidents. But what about the human cost? You can't put a price on people, after all. The human cost could be the loss of a life when looking at a fatal accident. Or the loss of quality of life, when considering serious or minor accidents, or work-related disease. This loss of quality of life may be permanent or temporary, depending on if the person recovers to full health.

And the human cost is not just felt by the person injured at work, but also to their family and friends, as they can no longer participate in the same way (or at all) to their home and social life.

The majority of costs fall on individuals, driven by human costs, while employers and government/taxpayers bear a similar proportion of the remaining costs of workplace injury and ill health.

Hidden cost to society

We have covered the hidden cost of accidents to your business, which are extensive. And the human cost to the individual. But let's zoom out for a moment. Because people don't just live to work. And we all contribute throughout our lives to the society we live in. Our society needs people. So the cost of an accident is not just felt by the person affected, and the business they work in, but also by society as a whole.

For the remainder of the costs of an accident, the Government (or more accurately - the taxpayer) picks up the tab. This accounts for around 20% of the accidents hidden costs.

Following a serious accident, society may lose a productive person from the labour market, who can no longer contribute to their industry. The cost to society can also include increased healthcare needs and dependency on the benefits system for people that are no longer able to work due to their injuries or ill health.

• NHS treatment
• Benefit payments and associated administration costs
• Reduction in income tax and NI contributions
• Investigations
• Enforcement action and prosecutions

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For everyone involved, the business, the individual, and society, accidents have a cost. And many of these costs are hidden, and not fully considered until an accident happens. The bigger the accident, the greater the cost.

Stop accidents before they happen, with near-miss reporting. Here are 5 examples of how near-miss reporting can help you prevent accidents .