The Value of Safety

Have you ever thought about the safety challenges a contractor must consider while rebuilding the insured’s structure? Have you ever worked with an estimate that includes costs associated with OSHA or other safety related items?

Typically, OSHA and safety charges occur on large commercial construction projects, although in some instances I have seen these types of charges estimated on small projects as well. Ensuring the safety of both the staff and the policy holder (client) is a very real cost consideration for contractors and carriers.

An article by John Schaufelberger and Ken-Yu Lin titled “Causes of Accidents” revealed that, “90% of accidents on construction sites are due to unsafe behavior and about 10% are due to unsafe job site conditions.” The article then explains, “Unsafe behavior may result from a worker’s state of mind, fatigue, stress or physical condition.” In this compromised mental state a worker may suffer an injury by overexerting themselves, responding incorrectly to an unsafe situation or misjudging their abilities.

The Schaufelberger and Lin article also listed the many causes of accidents on the job site, including:

  • A person detects a hazardous condition such as a defective ladder but does nothing to correct it.
  • A person disregards a safety policy such as refusing to wear gloves while handling lumber.
  • A worker may misjudge the risks associated with a task and choose to perform the task in an unsafe manner.

It is important for construction companies to protect their staff, their business, and their client by implementing a comprehensive and companywide safety program. To create a culture of safety, company leaders must not only emphasize safety in meetings and on-site visits, they must also ensure sufficient resources to support the program.

When insurance carriers work with contractors that value safety on the jobsite, they see value as well. As contractors implement a culture of safety, they reduce their overhead costs, which, in turn, reduces overhead for the carrier and their insured.

In addition, safety programs reduce general liability exposure to the insured while reconstruction is performed. Utilizing a safety program also lowers construction costs on projects due to reduced losses of construction resources. And in the case of catastrophic losses, which are typically high profile projects, the adjuster is able to manage the issues that arise with such projects without having to deal with potential construction accidents.

As you’re examining estimates, look for safety-related costs, including: helmets, high visibility clothing, steel toe boots, scaffold engineering, site security and fencing, OSHA required training and more.  While some of the equipment and training measures are simply the cost of doing business, there are times when you may see safety costs itemized.

Bottom-line: Safety programs may add cost to a project, however safety programs and precautions pays off for everyone in the long run.