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.
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.
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.