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Evaluating the Heinrich Ratio of between Direct and Indirect Costs of Industrial Accidents in South Korea

  • Crisisonomy
  • Abbr : KRCEM
  • 2020, 16(1), pp.121-132
  • DOI : 10.14251/crisisonomy.2020.16.1.121
  • Publisher : Crisis and Emergency Management: Theory and Praxis
  • Research Area : Social Science > Public Policy > Public Policy in general
  • Received : December 11, 2019
  • Accepted : January 14, 2020
  • Published : January 31, 2020

JEON, YONG-IL 1 Dong Ha Kim 2 BAEK, HEECHONG 3

1성균관대학교
2Coca-Cola beverage company
3중앙대학교

Accredited

ABSTRACT

In this study, we identified the costs, both tangible and intangible, that are incurred by workplace accidents in order to estimate the total financial losses. We then verified the Heinrich ratio that was originally derived in the U.S. almost 90 years ago. The Heinrich ratio indicates that the indirect costs of a workplace accident are typically 4 times higher than the direct costs (1:4). Our literature review produces the general estimation model which includes the detailed and comprehensive items on direct and indirect loss from workplace accidents. The latest five-year data on workplace accidents in South Korea were used for various sectors including manufacturing, construction and service industries. The data on both fatal and moderate accidents were collected to calculate the direct and indirect costs of workplace accidents in order to verify the validity of the Heinrich ratio of between direct and indirect costs of industrial accidents in South Korea. The ratio was found as 1:6.2 for fatal accidents and 1:7.2 for moderate accidents, which are higher than the ratio of 1:4, originally suggested by Heinrich. The findings of this study could be actively utilized in the company’s safety management and government policies.

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