Insight
What’s the Indirect Cost of Risk?
The indirect cost of risk is the portion of the total cost of risk (TCOR) that is not directly related to the cost of managing risks. It includes the cost of lost productivity, damage to reputation, and other indirect costs resulting from risks.
The indirect cost of risk is often more difficult to quantify than the direct cost of risk, as it can be more intangible and harder to measure. However, it can be just as significant, if not more so, in terms of the overall impact on an organization.
Some examples of indirect costs of risk include:
- Lost productivity: Accidents or injuries can result in lost time and productivity, which can have a negative impact on an organization’s bottom line.
- Damage to reputation: A company’s reputation can be damaged by negative events, such as accidents or injuries, which can lead to a loss of customers and business.
- Decreased employee morale: Poor workplace safety can lead to decreased employee morale, which can result in lower productivity and potentially lead to high turnover rates.
- Legal liabilities: Companies can face legal liabilities if they are found to be responsible for workplace injuries or fatalities, which can result in significant costs.
Overall, the indirect cost of risk can have significant consequences for organizations and should be taken into consideration when managing risks.
Latest Posts
May 16, 2023
Safety and Ergonomics Webinar: How To Prevent Injuries with AI & Data Science
Learn about transformational safety analytics from CompScience that utilizes workplace video to generate predictive models from that safety managers and ergonomists can use to report and improve injury rates in manufacturing, logistics, construction and more. This 45 min webinar was presented by Kris Mizel, CSP, Head of Loss Control and Lauren Wandell, Head of Ergonomics […]
Read more
May 5, 2023
What is workers’ compensation insurance?
Workers’ compensation insurance is a type of insurance that provides benefits to employees who are injured or become ill as a result of their work. The purpose of workers’ compensation insurance is to ensure that employees have access to medical care and financial support in the event of a workplace injury or illness, and to […]
Read more
May 5, 2023
How To Focus A CFO On Improving Workplace Safety?
Here are a few strategies that may be helpful in convincing a CFO to prioritize workplace safety. It may not be clear at first why improving safety with analytics is important, but reducing accidents and improving an X-mod has high impact on costs. Talk with CompScience about how we can help reduce injuries with […]
Read more
April 30, 2023
How X-Mod Affects Workers Compensation Costs and How X-Mod Is Affected By Safety Practices
The Experience Modification Rate (X-Mod) is a factor that affects a company’s workers’ compensation costs. A high X-Mod indicates that a company has a higher than average number of claims, which can result in higher insurance premiums. From the perspective of safety managers, a high X-Mod suggests that a company’s safety program may not be […]
Read more
April 27, 2023
Reducing TRIR with AI and Computer Vision
TRIR (Total Recordable Incident Rate) is a measure of how many work-related injuries and illnesses occur in a workplace, usually expressed as a rate per 100 employees per year. AI (Artificial Intelligence) and computer vision can help reduce TRIR by improving workplace safety through the use of advanced technologies. We have measurably reduced TRIR for […]
Read more
April 27, 2023
How To Reduce DART Rates
Reducing the dart rate is a critical goal for any safety manager, as it directly relates to the safety and well-being of employees in the workplace. The dart rate, also known as the days away, restricted, or transferred rate, measures the number of days employees are away from work due to occupational injuries or illnesses. […]
Read more