Frank Bird’s iceberg theory

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.

Also read:

Types of Accident Causation