Occupational Safety and Health Administration (OSHA) standards can sometimes be expensive, appear unnecessary or extreme, or even just a pain. But when faced with the alternative, a robust safety program is the far better option. Here are just a few factors to consider every time your team heads out to the construction site.
Workers’ compensation insurance is frequently a contractors single largest expense next to payroll and materials. Even a single claim can result in a huge rate hike that is sure to put a dent in your bottom line.
According to OSHA’s Safety Pays cost estimator, a single broken bone can result in upwards of $100,000 in direct and indirect costs. Depending on your profit margin, simply recouping the loss could mean closing an additional $500,000 in business — no easy task in today’s tight market.
Getting caught without workers’ comp coverage can be financially devastating for small businesses. If your employees are not covered, the workers’ compensation charges may be applied to your customers WC — which is never good for customer relations. In the event that no coverage is available, you can probably expect a law suit to follow. And when uninsured employees sue for damages, the legal system is usually on their side. Lost customers, steep legal fees and medical expenses can be just the start of a very expensive mistake.
Work stoppages, working a man down, incident investigations and OSHA record keeping make meeting already tight deadlines that much more difficult. Some jobs have financial penalties for delays, but any missed deadline is certain to tarnish your professional reputation.
Loss of Work
Our recent article, What Every Construction Firm Needs to Know about Safety Performance told you about the safety performance measurements that everyone operating in construction needs to know.
These factors come into play when certain projects, especially large, long-term, lucrative projects, require a company to show an acceptable Experience Modification Rate (EMR), Total Recordable Incident Rate (TRIR) and Certificate of Insurance (COI). If your EMR and/or TRIR are too high, and/or you are unable to provide a COI with acceptable limits, you will most likely be excluded from the bidding process.
As if the above expenses aren’t damaging enough, getting banned from the bidding process may be difficult to overcome.
The moral of this story is simple: Make safety a part of your daily routine. Inspect your job site, have the proper safety plan in place, train your employees on the safety plan and the potential hazards of their jobs, and don’t cut corners on safety. Visit OSHA.gov for the latest safety information and requirements.