Occupational Safety and Health Administration (OSHA) standards are established to achieve a simple goal: Keep workers safe. Keeping compliant with OSHA standards does not guarantee an injury-free workplace. OSHA regulations are the minimum required standards. Failure to comply with OSHA regulations, however small or insignificant they may appear, can dramatically increase the likelihood of worker injuries.
Worker safety is always the first priority. With that said, there’s a business side to safety in construction and the real cost of bad construction site safety can put construction businesses out of business. As you consider the cost of providing a safe and complaint workplace, here’s a look at the fallout from cutting costs and corners when it comes to safety.
Insurance Hike
Workers’ compensation insurance is frequently a contractor’s 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 at a 20 percent margin — no easy task in today’s tight market.
Lawsuits
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 expect a law suit is likely 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.
Delayed Construction
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
Last week’s post, What Every Construction Firm Needs to Know about Safety Performance Ratings and OSHA Penalties told you about the safety performance measurements that everyone operating in construction needs to know.
These factors come into play when 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 insurance rate hikes, law suits and delayed projects aren’t damaging enough, getting banned from the bidding process may be difficult to overcome.
The post The Real Cost of Bad Construction Site Safety appeared first on ModSpace Blog – Construction News, Updates & Insights.