Insured and Uninsured Costs

Uninsured costs vary between businesses and types of accident. They are, however, several times more than the insured costs. They can be likened to an iceberg. The costs recoverable through insurance are visible. But hidden beneath the surface are the uninsured costs. Like an iceberg, most of the costs are not immediately visible. 

In the UK studies have given different ratios for these insured to uninsured costs. 

• A study in a cheque-clearing department of a financial institution (a lower risk environment) found the insured: uninsured ratio to be 1:3.3. That means for every £1 recoverable from their insurance, the company had to meet a further £3.30 themselves.
• HSE studies found that the insurance premium paid: uninsured losses ranged from 1:8 to 1:36. That meant for every £1 they paid in insurance premiums, the companies had to meet a further £8 to £36 themselves for losses arising from accidents. 

Insured costs; 

• Injury 
• Ill-health 
• Damage to buildings 

Uninsured costs may include; 

• Lost time;
• Sick pay;
• Damage or loss of product and raw materials;
• Repairs to plant and equipment;
• Extra wages, overtime working and temporary labour; 
• Production delays; 
• Investigation time; 
• Fines; 
• Loss of contracts; 
• Increased insurance premiums 
• Loss of experience; 
• Legal costs; and 
• Loss of business reputation.

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