1. Cost Benefit Analysis of Implementing LOTO
LOTO COMPLIANCE
Cost Benefit Analysis of Implementing LOTO

2. 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

3. 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

4. Accidents Cost Iceberg

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

6. 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

7. 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

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

12. 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

13. 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

14. 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

15. 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:

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

17. 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

18. 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

19. 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

20. 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:

21. 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:

22. Be Aware!!! No – 61% Was Lockout instructions provided to Employees?
Equipment Mode when Injury occurred
Production Mode – 70%
Maintenance Mode – 30%
Source:

23. 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:

24. 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: