Society exerts pressure through three overlapping and interacting spheres of influence: moral, legal and financial. This section outlines the moral and financial drivers for health and safety management. The legal framework for health and safety regulation is discussed in later elements.
Imagine you are a Health & Safety Manager at a company performing poorly in health & safety. You are trying to persuade a company director to take health and safety more seriously. What moral arguments could you make, i.e., what could you say to the director to change their way of thinking about this?
Remember, when it comes to moral arguments, you’re basically trying to make someone see the difference between right and wrong.
Give it a shot and don’t worry if it seems difficult. You’ll be able to see some suggestions once you’ve had a go.
Accidents clearly cost money because of injured people, damaged plant and machinery and wasted product. The HSE estimates that occupational injuries and illnesses cost the UK in the region of £20 to £30 billion pounds each year if the total costs to individuals, employers and society are considered. The costs of highly visible accidents involving large-scale loss of life or major property damage as a result of fire and explosion are often determined by official inquiries.
The BP Texas City fire and explosion in 2005 cost over $21 million in fines, $2 billion in civil claims, and $1 billion in reinstating the site. The Buncefield oil refinery fire in 2005 is believed to be the most expensive accident in UK history, with a total cost of over £1 billion, including £9.5 million in fines.
Smaller accidents have proved much more difficult to cost as relatively few companies have systems in place to quantify them.
HSE Guidance from 2002, “Reduce Risks – Cut Costs” (INDG355) identified three methods for quickly and crudely estimating uninsured costs of accidents.
As every business and every incident is different, the only accurate way of determining costs is to measure them.
Direct costs are those that can be easily attributed to an incident. They include costs such as:
Indirect costs can remain hidden. They may not be attributable to a single incident. However, an organisation will still incur losses over time if they have poor health and safety performance. They include costs such as:
Some financial costs are covered by employers’ liability insurance. For example, suppose an accident has caused an injury. In that case, the injured worker may be able to bring a personal injury claim for their injuries. Damages are awarded on various factors, including the loss of a faculty (such as sight or hearing), whether the injury is permanent, and its effect on the claimant’s ability to earn a living.
However, not all costs are covered by such insurance, and the business will have to take those financial hits. Examples are:
Accident and ill-health costs can be likened to an iceberg: costs that you can recover from insurance are visible. Those not covered by insurance are hidden below the water and are many times greater.
Following an accident, a company was closed for two weeks while an internal investigation took place. The associated downtime caused many missed production deadlines and loss of contracts.
Some of the exercises we include in the course ask you to write your answers to questions. There are a few of them in this section – how did you get on with them?
If you found them challenging – that’s a normal reaction! Many learners find it challenging to put their ideas down on paper (or type them into the box).
But the thing is – that’s what the NEBOSH Open Book Exam is all about, so you’ll need to practise this skill if you want to do well!
Watch the video for an approach you might find helpful.