RI 2625 The Cost Of Accidents In Metal Mines As Measured By Compensation Insurance Premiums

"Human accidents are caused by production accidents, generally ones (such as derailment of cars, falling rock, etc.) that have occurred numerous times before an employee was actually involved. Prevention of human accidents is, one of the essentials in cutting operation costs, and advocates of safety are studying economics to assist them in their work of preventing accidents.Workman's compensation insurance or compensation for human accidents is a true operating cost, and is the only purely tangible measure available which gives a measurement of the cost of accidents even though, as will be pointed out later, it represents but a portion of the total cost of human accidents.In using premiums paid for compensation insurance as a measure of the cost of accidents, it must be kept in mind that most insurance laws, as pointed out in a former paper (Serial 2590 of the Bureau of Mines) provide a waiting period before compensation for the lost-time wages starts, with the compensation limited to definite percentages of the wages. The waiting period and limited compensation combined tend to limit the amount paid to an injured workman who, if he receives 1/3 of the lost-time wage, will probably have been reimbursed as high as the average injured workman.The total or complete economic cost of human accidents, must include, in addition to compensation paid for lost time, and the portion of the lost-time wage suffered by the workman for which he is not compensated, the additional cost to the company through-(a) temporary decreased production by the breaking down of the morale, etc., (b) the breaking in of a new employee which is admittedly expensive,(c) the increased liability of human and production accidents caused to or by the new employee.Another charge against accidents, which is not included in the compensation payment, is the economic loss through the killing of as workman who has no dependents. Few of the States' laws require any compensation except burial expenses to be paid for fatalities to persons having no dependents. It is estimated by the United States Bureau of Labor Statistics that the economic loss through a fatality is 6000 shifts. If each fatality was compensated for this amount of time and at half-time wages, using an average wage of $5.00 per shift, the compensation for fatality based on the economic loss would be $15,000. but the average actual compensation paid for each fatality is about $3,000."