Frank Bird’s iceberg theory
Frank Bird (Jr.) explained that the cost of accidents are comparatively like iceberg.
In the sea we can see only 1/3rd part of the iceberg, while 2/3rd part is hidden under the water.
Similarly his explanations says that only a small part of the cost of accident is unhidden while major cost of the accident is hidden.
Frank Bird’s iceberg theory divides hidden cost in two parts accordingly.
- Uninsured cost of property damage. This can be quantified.
- Uninsured miscellaneous cost. This is difficult to quantify.
Unhidden cost:
Another term for Unhidden Cost is “Direct Cost“ or “Insured Cost”. Examples of All medical expenses, amount paid as compensation, legal fees etc. counts under unhidden cost.
Hidden cost:
Another term for Hidden cost is “Indirect Cost” or “UnInsured Cost”. Hidden cost are as follows:
- Damage to reputation of the company.
- Damage to property, equipment etc.
- Damage to material, stock etc.
- Loss due to delay & interruption in production.
- Cost of accident investigation & report preparing.
- Cost of legal cases, fees of advocates etc.
- Waste of time of co-worker and management in attending hospital, courts, government office, discussing accidents etc.
- Cost involved in training the new worker to replace the injured workman.
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