The cost of ignoring health and safety law
11 October 2007
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"We've never had an accident on our premises"; "My insurance will cover any claims"; "I can't afford the time or the money involved in complying with health and safety rules".  These are just some of the reasons why business-owners fail to reach the standards of health and safety in the workplace demanded by the law. Read on to find out why you ignore the law at your peril ...

A surprisingly large number of businesses do not have the proper procedures and policies in place because they think that they will never be affected. The fact is that accidents do happen, and they are less likely to occur if you do have the proper safeguards in place. What's more, the potential cost to your business of dealing with an accident is far more than putting the safeguards in place. And the smaller your business, the bigger the potential impact if you do have a serious incident. It could even put you out of business.

The Health and Safety Executive (HSE) reports that over 200 people a year lose their lives at work in Britain. In addition, around 150,000 non-fatal injuries are reported each year, and an estimated 2 million suffer from ill health caused or made worse by work.

What do health and safety laws cover?
Health and safety laws are there to prevent accidents and illness: fire precautions, housekeeping, computer stations, lone working, noise and staff welfare are all issues covered by the regulations, as well as accidents.
 
What are the potential costs of accidents to your business?
Your insurance will never cover everything: in many cases your insurance will only pay for serious injuries or damage. You will have to pay for other costs, including:
  • Lost time
  • Extra wages/overtime payments
  • Sick pay
  • Production delays
  • Fines
  • Loss of contracts
  • Damage to products, plant, buildings, tools, equipment
  • Loss of reputation

What's more, a poor health and safety record may mean increased premiums or refusal of future insurance cover.

Case study from the HSE:

A worker was using an unguarded drilling machine in a small engineering company employing 15 workers. The sleeve of his jumper caught on the rotating drill entangling his arm.

Both bones in his lower arm were broken and he suffered extensive tissue and muscle injury. He spent 12 days in hospital undergoing major surgery and was off work for three months. On his return he was placed on administrative duties for five months and he was unable to operate machinery for eight months.

The managing director was prosecuted following the incident.

Costs to company

Wages for injured worker over period

£10,000

Loss of production/remedial work required

£8,000+

Overtime wages to cover lost production

£3,000+

Wages for replacement worker

£7,000+

Loss of time of manager/MD

£4,000+

Legal expenses

£3,000

Fines and court costs

£4,000+

Increase in Employers' Liability Insurance Premiums

£6,000

Total cost to business

£45,000+

Another cost was that two employees not involved in the accident were made redundant to prevent the company from going out of business.

More information
Ensure your business is compliant with the latest health and safety regulations by subscribing to the brand new edition of the Health & Safety Guide, updated for 2007. Includes easy-to-use templates and guidance.

Click here to find out more.