Justifying the Cost of Safeguarding Equipment

Submitted on Wed, 08/02/2017
Machinery safeguarding represents one of the best investments on the plant floor. For example, in a study conducted by the Liberty Mutual Group for the US, 61 percent of executives say they save $3 for every dollar invested in safety equipment and programs. This is just one example of many worldwide studies that show the importance of investing in machinery safety.

No one discounts the impact that an accident has on plant operations. However, the cost of an accident can be staggering. In addition to the emotional cost to employees and managers, the direct and indirect costs of an accident accelerate quickly. Direct medical expenses and workers’ compensation benefits are just the tip of the iceberg. The indirect costs of lost production, OSHA fines, replacing damaged goods and machinery, and paying higher workers’ compensation premiums can represent a larger portion of the total cost of an accident.

The same survey of executives indicates that executives figure to spend $3 to $5 of indirect costs for every dollar of direct costs of an accident. For example, an accident with direct costs of $10,000 has additional indirect costs of $30,000 to $50,000. The impact of just this one accident becomes even more significant when a company realizes that the bulk of these costs are not covered by insurance.

OSHA offers a software program, $AFETY PAYS, as part of its eTools and Electronic Products for Compliance Assistance. This interactive package helps employers determine the potential impact of occupational injuries by estimating both direct and indirect costs.

A user supplies information about company profit margins, and the program calculates the additional sales needed to cover the cost of an injury. The program uses real insurance company claim data and an expert software system. It can be found on the OSHA web site at: http://www.osha.gov/dcsp/smallbusiness/safetypays/estimator.html.

Get Peace of Mind...

  • Knowing that your machines or process lines are safeguarded correctly to the current standards
  • With 100% compliance
  • Having documented risk level identification and risk reduction strategy
  • Knowing machine operators are trained on the safety systems installed
  • By saving money because it only needs to be done once

Talk to one of our automation experts today at (855) 737-4716, or fill out our online form to learn more