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This week we give you a look at what electrical accidents are really costing your business.
Thanks for joining us again, Troubleshooters! Today on Troubleshooting Thursdays we’re going to be looking at what electrical accidents are really costing your business.
Manufacturing executives who are trying to determine whether electrical safety training for employees is worth the cost may be surprised to learn just how much damage accidents do—to employees, to equipment, and to the bottom line. In fact, the results of just one accident can be catastrophic, to those involved as well as to the business itself.
Here are some of the potential costs associated with electrical accidents:
- Loss of life
There were 154 electrical fatalities in 2016 (an increase of 15% over 2015) in the US. The “Industrial Machinery – Installation, maintenance and repair” occupational group comes in at number 2 on the list of “fatal five” occupational groups at risk for electrical accidents (after construction trades).
- Lost employee work time
There were 1640 non-fatal electrical injuries in 2016 that resulted in days off of work. The median number of days off work was 5. Those days are usually paid, plus employers have to train a replacement or pay overtime to a substitute.
- Production line downtime/lost production
Depending on your industry, when the production line goes down due to electrical accidents (or any other cause, for that matter) businesses can lose as much as $22,000 per minute (that’s in the auto industry, where some executives estimated the amount to be even higher, at $50,000 per minute).
- OSHA investigation
The Occupational Safety and Health Administration (OSHA) of the US Department of Labor investigates fatalities and catastrophic incidents in workplaces where they have jurisdiction. OSHA may also conduct surprise investigations of the workplace as a result of employee complaints or of referrals from other agencies. If they discover that a company is at fault, the business will face penalties. Repeat violators can face extremely high fines.
As mentioned above, OSHA fines can be very high. OSHA publishes examples of incidents and fines, for example, this incident in October 2018 in which a manufacturing employee’s arm was crushed because the manufacturer had failed to implement energy control procedures to prevent unintentional machine start-up. The company was fined $213,411. Or this incident in the same month, in which a plastics manufacturer was fined $107,168 for failing to train employees on lockout/tagout procedures, resulting in amputation.
- Medical costs
The Workplace Safety Awareness Council (WPSAC) says the average cost of hospitalization alone for electrical accidents ranges from $200,000 to $750,000 USD and often exceeds $1,000,000. This of course is in addition to the suffering of the worker during that time and potentially for the rest of their life.
There are approximately 93,000 personal injury lawyers in the US, many of whom specialize in electrocution injury. Something is keeping them busy. Victims may be awarded damages for current and future medical expenses, lost potential earnings, pain and suffering, and legal fees. If a company is found to be particularly negligent, additional punitive costs may be levied.
- Lost business/orders/customers
Accidents that stop production can result in poor plant reliability, and consequently in lost orders or even future business from customers who depend on timely delivery of the product.
- Equipment damage
Manufacturers know just how costly their assembly or production line machines are. While not a tragedy like injury to human workers, damage to equipment as a result of electrical accidents can be hugely expensive to repair, and may require replacing the machine4 altogether. The downtime while this is happening may be just as costly as the machine.
All of this adds up to the potential for massive losses. It has been estimated that work-related injury can end up costing an employer $30 million when medical costs, litigation settlements, and equipment damage are all considered.
Even if it’s not possible to predict exactly how much electrical accidents will cost your enterprise, it’s clear that the cost of training your employees properly to work with electrical equipment is a drop in the bucket, and may even help you avoid the kind of catastrophic accidents from which your business may never recover.
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