it is sharing of knowledge. By Bimal Chandra Das, Rtd. AGM (Safety), Bokaro Steel Plant,/ Bokaro. Kolkata

1. Cost of Accidents
Cost of Accident is a valuable tool to measure safety performance. Lord Kelvin had said
“When you can measure, what you are speaking about, and express it in numbers, you
know something about it ; when you cannot measure it, when you cannot measure it in
numbers, your knowledge is of a meagre and unsatisfactory kind . “ Having a standard
method of calculation helps in many ways. Even if the standard is not foolproof it equates all
performance on a common ground for comparison. In SAIL, SSO or SAIL Safety Organisation,
had taken the lead in developing a system of calculation of the cost of accidents. Based on a
joint study by OHS, BGH & SED the present system has been developed. If applied only to
individual cases there may be errors but if it is done for departments over a period of time like a
month, the result is a fair indicator of how much the accidents in a department are costing the
company.
Certain pitfalls are present in the system. One major one is the desire of departments to
suppress accident data. To avoid this the data is taken from SED’s record of >48 hrs cases
reported in OHS or BGH. It is also seen that in many cases persons “carry injuries” , that means
they either do not avail of injury leave or join before they are fully fit. This paints a rosy picture
but the actual situation is different, as persons are on duty and working below their full
potential. To some extent this covered in indirect costs.
The basic methodology involves two parts ie. Direct cost and Indirect cost. The Direct
costs have three factors
1. Medical costs
2. Man day wages lost costs
3. Compensation costs
Medical costs involves cost of treatment, medicines, investigations, in patient bed cost
etc. After studying data of 6 months it was simplified and standardised into three groups, First
aid (1 day), Minor (less than 20 days) and Serious (more than 20 days. The per day cost has
been worked out as Rs.90/- for First aid , Rs.240/- for minor cases and Rs.400/- for Serious or
Major cases. It is assumed that in First aid treatment is for one day only, for minor cases 11
days and 21 days for serious cases. This is based on actual statistical analysis and this system is
applied. The man days cost is based on the wages cost for the number of days a person is absent
on medical leave. The Compensation cost of course decided on fatal cases and partial or full
disability by a medical board.
Indirect costs involve a whole range of factors :
 Break down maintenance
 Production loss
 Upstream/down stream production loss
 Loss of property
 Working hours lost (IR)
 Accident investigation
 Administrative cost
 Drop in morale or momentum (apprehension, fear or psychological factors)
Earlier it had been believed that indirect cost is two or three times the direct costs.
However statistics show that it may range from 4 times to 9 times. At SAIL the factor is five
times. Some data have been showed during the session. The yearly, half-yearly and monthly
cost gives a wake up call to department senior managers to start serious efforts to control the
trend. It can also give an indication of the effectiveness of the present safety management
drives and coupled with other accident statistics, help in identifying areas or groups of people
needing special attention.