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Knowledge Center Items Impact of Job Site Safety on Contractors Insurance

Impact of Job Site Safety on Contractors Insurance

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Construction Safety Week 2019, taking place May 6-10, puts the focus on getting the job done safely on construction sites throughout the country. More than 70 national and global construction firms comprising of The Construction Industry Safety Initiative (CISI) group and the Incident and Injury Free (IIF) CEO Forum join forces during this week to inspire everyone in the industry to demonstrate their commitment to safety. They do this by encouraging the construction industry to celebrate safety in the workplace with events, continuing the conversation on social media, and sharing best practices, tools and resources.

On-the-job safety is of paramount importance in saving lives and ensuring that workers get home safe each and every day to loved ones. Safety commitment and implementation also work hand-in-hand with the insurance and risk management programs construction firms have in place. The more committed a firm is in its safety implementation and management, the fewer incidents of losses it will have, which will directly impact the cost of its insurance program.

Take Workers’ Compensation insurance, for example. Workers’ Comp claims are often settled for hundreds of thousands of dollars, which can be devastating to a small business. A claim can have long-term effects on a firm’s insurability and ability to pursue projects. Recordable accidents – as defined by OSHA, are injuries or illnesses that require medical treatment beyond first aid, as well as those that causes death, days away from work, restricted work or transfer to another job, or loss of consciousness –­­­ affect a company’s experience modification (ex-mod). The higher the ex-mod, the higher Workers’ Compensation insurance premiums will be. Establishing safe practices and implementing a formal safety program typically results in a lower ex-mod, which in turn reduces the cost of Workers’ Compensation insurance.

In addition, project owners and general contractors use a contractor’s ex-mod as a determining factor when awarding projects and contracts. Subcontractors with high ex-mods are often disqualified from bid opportunities. Contractors that lack formal safety programs also may find that they do not qualify to bid on certain projects. For many general contractors, safety is just as important as pricing, and they simply will not work with anyone who puts workers at risk.

Then there are the safety violation fines from OSHA, which continually visits construction sites “to assure safe and healthful working conditions for working men and women by setting and enforcing standards.” As of January 2019, the base fine is $13,260 per violation and $13,260 per day for failure to correct the condition.

Employees are the lifeblood of a construction firm, making a comprehensive safety program critical in reducing risks and keeping a healthy and productive workforce. RPS can assist you in placing Workers’ Compensation insurance for your insureds as well as in helping contractors minimize losses and reduce costs with a robust safety program, implementation of a Return to Work program, review of claims handling and reporting procedures, pinpointing claims trends and evaluating accident history, and more. Just give us a call.

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