Insurance cover is a risk management tool which is sought by various organizations in order to insure their property and resources against loss or employees personal injury in cases of accidents. Insurance cover is very important and is becoming popular since it does not put the organizations’ management to the task of where to find money for handling accident issues. It enables the employees to get their compensation and treatment coverage in cases of personal injuries. In this paper, the real and hypothetical workplaces’ accidents are described and the various insured and the uninsured accident costs and their accounting treatment are discussed.
Accident Investigation Workplace accidents are the accidents which occur in places of work and those can either lead to personal injury or property damage. These accidents can also be real or hypothetical. Real accident is the particular accident that has a high possibility of occurrence, while a hypothetical workplace accident is the accident which is just supposed (Acutt & Hattingh, 2003). ).
Wiley & Sons, Brauer & Wiley Interscience (2006) state that the costs involved in the work place accidents can either be insured or not. The insured costs are the costs covered by the workers’ compensation plan and the other medical costs in case of accident. These costs include personal injury protection and medical protection. On the other hand, Burke, Cooper & Clarke, (2011) state that uninsured costs are the additional costs associated with the actual accidents. These costs may include - the production time lost, productive time lost by fellow employees while trying to assist the injured employee, the time lost when hiring new employee to replace the injured ones, the cost of repair of damaged equipment, and the medical costs paid by the employer but not covered by the insurer.
According to Acutt & Hattingh (2003), all the insured costs are most likely to be tracked or estimated by the employer. This is because they involve payment of the insurance premium to the insurer and so has to be exactly known and accounted for by the employer. On the other hand, the uninsured costs which are likely to be tracked or estimated include the costs of repair of the damaged property and the medical costs paid by the employer. This is because these costs can be directly linked to specific departments within the organization. But then the rest of the uninsured costs can only be absorbed by the various departments since they can not be easily estimated.
In conclusion, it is very important to note that every organization should strive to have a workplace insurance cover for its employees, since it allows for easy coverage of the accident associated costs.