When a serious accident happens, the first cost anyone counts is the one the insurer pays. It is usually the smallest part of the bill.
The iceberg
A study by the UK's Health and Safety Executive in the 1990s found that uninsured losses from accidents were between 8 and 36 times greater than the insured costs. The exact ratio varies by business, but the pattern is consistent: most of the cost is hidden.
Where the money goes
Stopped production and missed orders. Overtime to catch up. Damaged equipment and materials. Supervisors and managers pulled away for days. Recruitment and training of replacements. Penalties, legal costs and, sometimes, a customer who does not come back.
Why it matters in Pakistan
For exporters, a serious incident can trigger buyer audits and order holds. For manufacturers on tight margins, a week of lost production can wipe out a quarter's profit. The hidden cost is often the difference between a good year and a bad one.
Investigation as an investment
A proper investigation costs a fraction of the hidden loss, and prevents the next one. It also gives insurers, buyers and boards the facts they need, which shortens every other part of the recovery.
KEY TAKEAWAYS
→Insured costs are usually the smallest part of an accident's cost.
→Lost production, time and customers are the largest.
→Preventing one repeat usually pays for the investigation many times over.
QUESTIONS READERS ASK
What are the hidden costs of a workplace accident?
Lost production, overtime, damaged equipment, management time, recruitment, penalties and lost customers, most of which insurance does not cover.
How much larger are uninsured costs?
A UK Health and Safety Executive study found uninsured losses between 8 and 36 times the insured costs.
