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Wednesday, 30 November 2016

Direct and Indirect Costs

Direct Costs:

These are the measurable costs which are directly associated with the accidents and involves payment of money. For e.g.

  • Compensation pay outs
  • Victim Sick pay
  • Fines from criminal court
  • Machinery repair costs

Indirect Costs:

These are the costs which are arise as a consequence of the event, indirect costs are often difficult to quantify, they are more substantial than direct costs. For e.g

  • Loss of worker morale (will have impact in productivity and culture)
  • Supervisor Time spent on investigation and preparing reports
  • Recruiting and training new employees
  • Loss of business reputation and goodwill
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