Cost Benefit Analysis of Implementing LOTO LOTO COMPLIANCE Cost Benefit Analysis of Implementing LOTO

Insured Cost Vs Uninsured Cost Insured cost : Are costs that are directly related to the accident. They may be insured (Claims on employers and public liability insurance, damage to buildings, equipment, or vehicles) or uninsured (fines, sick pay, damage to product, equipment or process) Source: Introduction to Health & Safety at Work by Phil Hughes, Ed Ferrett

Insured Cost Vs Uninsured Cost Uninsured Cost: Are costs not directly related to the accident. They may be insured (business loss or product or process liability or uninsured (loss of goodwill, extra overtime payments, accident investigation time, production loss) Source: Introduction to Health & Safety at Work by Phil Hughes, Ed Ferrett

Accidents Cost Iceberg

Cost to Company – Insured Cost Covering Injury Ill health Damage e Source:Printed and Published by HSC, UK

Cost to Company – Uninsured Cost Wages for injured worker over period Loss of production/remedial work required Over time wages to cover lost production Wages for replacement worker Loss of time of Manager/MD Legal expenses Fines and Court costs Insurance premiums Source: Printed and Published by HSC, UK

Cost to Company – Uninsured Cost Loss due to damaged Equipment Loss of contracts Clearing the site Investigation time Excess on any claim Loss of business reputation Source: Printed and Published by HSC, UK

Injuries related to non-compliance / non-implementation of LOTO

Source: Cost of Accidents by Dallas Babcock Total Accident costs to Industry was $123 billion in 1999 – Quantifiable Loss % on each category Source: Cost of Accidents by Dallas Babcock

Statistics on Industrial Accidents per year Cost of Disabling Injuries – 3.5 mn Workplace Fatalities - 6,120 Average cost of an accident involving death- $940,000 Average cost of an accident involving disabling injury - $28000 Source: Printed and Published by HSC, UK

Reports by various councils on Accidents 80% of all industrial accidents and injuries are due to Human Error (Source:NSC) i.e. $98.4 Bn out of $123Bn (Total Accident Costs to Industry in 1999) 19,371 accidents out of 23,338(Total accidents in the last 10 years)are due to Human oversight or Lack of Knowledge (Source: National Board of Boiler and Pressure Vessel Inspectors Reports) Source: Cost of Accidents by Dallas Babcock

LOTO Related Accidents Approximately 3 mn workers face the greatest risk of injury if Lockout/Tagout is not properly implemented 120 fatalities and 50,000 accidents a year can be prevented with the compliance to Lockout/Tagout standards 20% of the fatalities (83 of 414) that occurred among their members between 1973 and 1995 were attributed to inadequate hazardous energy control procedures specifically, lockout/tagout procedures. (Source: UAW (United Auto Workers) Source:http://www.osha.gov/SLTC/controlhazardousenergy/index.html

Top 10 list of most frequently cited OSHA Standards Scaffolding, general requirements, construction (29 CFR 1926.451) Fall protection, construction(29 CFR 1926.501) Hazard communication standard, general industry (29 CFR 1910.1200) Ladders, construction (29 CFR 1926.1053) Respiratory protection, general industry (29 CFR 1910.134) Control of hazardous energy (lockout/tagout), general industry (29 CFR 1910.147) Electrical, wiring methods, components and equipment, general industry (29 CFR 1910.305) Powered industrial trucks, general industry (29 CFR 1910.178) Machines, general requirements, general industry (29 CFR 1910.212) Electrical systems design, general requirements, general industry (29 CFR 1910.303) Source: JJ Keller & Associates, Workplace safety

Reduce Risks Cut Costs… Taking action to improve health and safety standards, as well as required by law is healthy for your business Insurance against every loss is not possible but through safety measures, time and money is saved It’s not just big accidents which costs you money, there would be many less serious ones “The real cost of a minor cut is much more than the sticking plaster” Source: Printed and Published by HSC, UK

Reduce Risks Cut Costs… The amount of uninsured costs varies between businesses and type of accidents, but is several times more than the insured costs. “A poor health and safety record may mean increased premiums or refusal of future insurance cover” Saving on the cost of accidents is an investment to your future business Source: Printed and Published by HSC, UK

Step 1 &2 Step 3 & 4 Step 5 Find out what could cause harm How to reduce Accidents? Find out what could cause harm Identify who could be harmed Step 1 &2 Decide what should you do to prevent anything happening to them Take action in a planned way, recording what you have done Step 3 & 4 Check if these actions are still working from time to time Step 5 Source: Printed and Published by HSC, UK

Be Aware!!! Industry Distribution 74% is formed by Manufacturing Sector Occupational Distribution Operators form 45% Craft & Kindred workers form 34% Activity of time of Accident Un-jamming objects from equipment – 30% Cleaning Equipments-29% Adjusting Equipment – 12% Source:http://www.stclaire.com/go/lockout_tagout/osha/htmlpreamble/pre-147com.htm

Be Aware!!! Circumstances of Injuries Injured by moving machine part – 80% Equipment Turned On or Off before doing the task No – 78% Major reasons for not turning off the equipment Did not think it necessary – 35% Task could not be done with power off – 35% Source:http://www.stclaire.com/go/lockout_tagout/osha/htmlpreamble/pre-147com.htm

Be Aware!!! No – 61% Was Lockout instructions provided to Employees? Equipment Mode when Injury occurred Production Mode – 70% Maintenance Mode – 30% Source:http://www.stclaire.com/go/lockout_tagout/osha/htmlpreamble/pre-147com.htm

OSHA Analysis of 83 Fatalities Investigation Cause Number Percentage Lack of Adherence to Safe work practices 83 100 Accidental or Inadvertent activation 21 35 Failure to Deactivate 29 25 Equipment Failure 27 8 Others 5 6 Source:http://www.stclaire.com/go/lockout_tagout/osha/htmlpreamble/pre-147com.htm

LOTO Violations OSHA fined Pepsi Cola & National Brand Beverage Ltd. with $195,000 in proposed penalties for alleged workplace safety and health violation Violations include the company's failure to provide training on lockout/tagout procedures, which prevent the inadvertent start-up of machinery or the release of hazardous energy, failure to apply lockout/tagout procedures when machines were being serviced, and failure to properly guard machinery Source:http://ohsonline.com/articles/2008/10/5-osha-fines-pepsi-cola-for-loto-violations.aspx