Saving money by spending on safety

Machine guarding expenses pay off

STAMPING JOURNAL® JUNE 2006

June 13, 2006

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Although the upfront costs of installing machine safeguards can be expensive, it is far more expensive to put your company at risk for employee injury and the resulting medical expenses, lost production, fines, and lawsuits.

Although the Occupational Safety and Health Administration (OSHA) requires and enforces the use of proper safety devices, many companies continue to overlook safety, grossly endangering their employees.

The main reason they give for not implementing proper machine safety guarding is the cost. However, what some employers fail to realize is that besides the moral and humane aspects, installing OSHA-compliant safety guards can actually save companies thousands of dollars each year.

Although it is common sense to install guarding, the upfront cost can be discouraging. Every employer wants to avoid injuries. However, like most people, they sometimes deal in the present more than the future. The mentality is that accidents either will not happen, or at least they will not happen right now. Their focus is limited and does not include all of the actual costs affecting the bottom line.

By analyzing the actual costs of an injury, employers can more accurately determine when to make the investment in a safety prevention program. While a company may think it cannot afford guards, it actually cannot afford to go without them.

The High Cost of Injuries

The total cost of an injury in the workplace far surpasses the obvious expenses. The impact on the budget begins immediately and can last a considerable amount of time. Often the resulting total cost of a work-related injury can be up to 10 times the direct cost calculated by the insurance company.

The first cost considerations with an injured employee are obvious:

  • Lost production when the employee cannot work
  • Doctor bills and related medical expenses such as medicines, lab work, X-rays, hospitalization, and transportation
  • Workers' compensation rate increases
  • Long-term rehabilitation or physical therapy expenses
  • Training for other job functions, such as an injured press operator training for CNC functions

Productivity also slows because of the impact the worker's injury has on co-workers. Some might be asked to train for and transfer to the machine left idle by the injured employee. Some might be required to be involved in the first-aid, investigations, lawsuits, and other related outcomes.

Also, most employees will spend some time discussing the events and speculating about the outcome. As a result, overtime may even be needed to meet production quotas set before the accident.

An injury also has an emotional impact on all employees. Fear of future injuries, lack of trust in the employer, and overall dissatisfaction as a result of the incident cannot be accurately measured. However, companies will feel their financial consequences extensively.

If the machine is damaged, the repairs and downtime increase company costs. The press might even need to be removed from service altogether. There also may be additional expenses related to damaged tooling or workpieces, which might be the customer's property.

Fines and Lawsuits

Depending on the circumstances of the injury, OSHA or state regulatory organizations may impose fines, some of which can be as much as $70,000 per machine. In accordance with 29 CFR 1910, OSHA will mandate the installation of safety guarding that the company originally was trying to avoid.

Litigations and lawsuits often follow an accident. These costs alone can be enough to bankrupt a company. Even if the company wins the case or it is dismissed or settled, the lawyer fees and associated costs are outrageous. Higher insurance rates also negatively affect the company's bottom line.

Inevitably insurance claims, workers' compensation forms, and accident investigation forms must be filled out following an injury. Managers also might be faced with unexpected issues such as slowed worker productivity, decreased employee morale, and budget constraints.

The impact of negative publicity resulting from the injury is hard to calculate too.

Prevention Is Cheaper Than Cure

Especially for small businesses, the upfront costs of safety programs can be difficult. However, prevention by safety guarding can be the best financial move a company can make. By prioritizing safety as a necessity, a company can dramatically improve its bottom line.

Of course, employees are still the most important reason to safeguard machines. Now, however, employers should realize that besides making common sense, machine guarding also makes financial sense.

Ashley Hildreth is business development manager with Press Accessory Sales LLC, P.O Box 591, 97, S. Pomperaug Ave., Woodbury, CT 06798, 203-263-5619, fax 203-263-0601, jennashley80@yahoo.com, www.pasllc.com.



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STAMPING Journal®

STAMPING Journal® is the only industrial publication dedicated solely to serving the needs of the metal stamping market. In 1987 the American Metal Stamping Association broadened its horizons and renamed itself and its publication, known then as Metal Stamping. Print subscriptions are free to qualified stamping professionals in North America.

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