Direct Cost and Indirect Cost - Iceberg Theory

 Ice Berg Theogry


 

 

 

 

 

 

 

 

 


Direct Cost

  • Fines in the criminal courts.
  • Compensation payable to the victim, which is likely to be met by insurance cover and will therefore result in an increase in insurance premiums.
  • First aid treatment cost.
  • Worker sick /medical pay.
  • Repairs to, or replacement of, damaged equipment and buildings.
  • Lost or damaged product.
  • Lost production time whilst dealing with the injury.
  • Overtime pay for the staff to make up for lost time.
  • Costs associated with the rehabilitation of the injured worker and their return to work.

 

Indirect Cost  

  • Loss of staff from productive duties in order to investigate the incident, prepare reports, undertake hospital visits, deal with relatives, attend court proceedings.
  • Loss of staff morale (which impacts on productivity, quality and efficiency).
  • Cost of remedial action following an investigation, e.g. change of process or materials and /or introduction of further control measures.
  • Compliance with any enforcement notice served.
  • Loss of goodwill of customers following delays in production and fulfilling orders.
  • Activation of penalty clauses for failing to meet delivery dates.
  • Damage to public image and business reputation.
  • Damage to industrial relations, perhaps leading to industrial action( e.g. strikes)
  • Attorney fees.
  • Degraded client loyalty and support.
  • Slowed work pace due to other workers fear of injury.
  • Clean up cost of widespread damage.

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