The Many Costs of an Arc Flash Incident

Being caught in an arc flash incident can result in devastating primary costs on an unprotected worker. At best, an employee’s life and that of their family is turned upside down as they undergo a long, painful recovery and rehab process. At worst, a family is left coping with the loss of a loved one.

What most individuals involved in the electrical trades – both employers and employees – rarely think about are the multitude of additional costs associated with such an incident. While the profound financial and emotional costs to the worker and his or her family can’t be overstated, from a business perspective, understanding all of the potential costs associated with an arc flash incident might help you make the business case to Senior Management for investing in the Personal Protective Equipment (PPE) required to protect employees from this catastrophic possibility.

Admittedly, outfitting your employees with arc rated, flame resistant (AR/FR) clothing, or supplying them with task-based arc flash suits is a significant investment. But while you go to great lengths to hire well-trained, experienced electricians and to create a “safety-first” culture, you may be overlooking risk factors that you’ve never even considered.

For instance, in his role as a safety advocate, arc flash survivor, Brandon Schroeder specifically points to his professional experience and his company’s culture as factors that contributed to the accident that could have cost him his life. Specifically, the most experienced electrical workers – and their employers – labor under the false belief that an arc flash incident could “never happen to them.”

Until it does.

And when – not if – it does, the costs mount up fast. Some you’ve probably already considered. Others you may not have fully considered. For this series of blog posts, we have grouped these costs into three main categories:

Direct monetary costs – These include costs associated with medical treatment and rehabilitation, workers compensation, legal costs and judgements resulting from litigation, potential fines, and increased insurance premiums resulting from the massive claims associated with the aftermath of an arc flash injury or fatality.

Costs to your reputation – No one wants to their company’s name splashed across the front page in connection with a catastrophic event. Your standing the community, your personal reputation, and your ability to attract talent in a tight labor market can all take a major hit in the wake of an arc flash incident. Of even greater concern is a 2015 Memorandum of Understanding issued by the U.S. Department of Justice instructing U.S. attorneys to criminally prosecute company officers to the full extent of the law for failing to comply with federal safety regulations. Likewise, virtually every state in the U.S. has laws on their books calling for license suspensions or revocations for flagrant safety violations.

Loss of business opportunities – Your customers are risk averse. They don’t look kindly on companies with a higher than average OSHA-reportable incident rate. In fact, many companies set a safety threshold contractors must meet in order to be considered for hire. Most potential customers do not want to take a chance on being associated with a future accident.

The economic argument – as with the emotional justification – for outfitting your workers in the appropriate AR/FR PPE is multi-faceted, and difficult to refute. In our next post we’re going to take a look at just how common arc flash incidents are – putting an end, once and for all, to the belief that “it can’t happen to me.”

This post is part 1 of a 4-part series exploring the financial implications for employers of an arc flash incident involving one of their workers. Be sure to read the other posts in the series: How Common are Arc Flash Incidents; What Does an Arc Flash Injury Actually Cost Your Business; The Cost of Providing Arc Flash Protection in order to fully understand why providing employees with arc flash protection is such a good investment.