How to Bridge the Construction Safety Gap

Construction workers who work at least 45 years on the job have a 75 percent likelihood of experiencing a disabling injury, and their chances of dying on the job are one-in-200, according to a recent study by the Center for Construction Research and Training (CPWR). While those numbers may reflect the aging workforce rather than a list of hazards, the construction industry experiences large numbers of employee injuries.

Despite risk management plans, four-in-100 workers sustained injuries on the job in 2010, a Bureau of Labor Statistics report shows. That figure was a 7 percent reduction in injuries from the previous year.

The “2011 Construction Industry Report” prepared by Aon Risk Solutions shows injuries decreased 5 percent from 2009 to 2011. Injury to workers is ranked seventh on the list of top 10 risks facing the construction industry, according to Aon.

Whether the claims department rests with the insurer or within the construction company, claims managers and adjusters often act independently of the safety side of loss management. Some experts say insurer and broker claims departments do a good job of partnering with safety and risk management teams.

On the other hand, claims departments within construction businesses often can be stuck in a reactive mode.

“Whether subconscious or conscious, the thinking is that day-to-day safety would slow down the project,” said Ariel Jenkins, senior risk control manager for Safety National in St. Louis, Mo. “Even with a mid- to full-size contractor who has a full-time estimator and safety professional, if the estimator and safety professional are in silos and don’t plan together, there are a lot of missed opportunities to plan in the cost of safety on a given project.”

A little communication between claims and the safety disciplines could vastly reduce risks and improve safety communication among the departments. However, Jenkins said he’s seen two departments operate on opposite sides of the spectrum. “Somewhere inbetween the claims focus and the safety focus of the loss stream, the opportunity for them to communicate is there. But culturally, it’s not always,” he said.

Clifton Waters thinks claims should facilitate communication with safety management. Vice president of SIA Group in Greenville, N.C., Waters thinks that cultural change within the organization is overdue. He said adjusters generally do a good job of managing claims and are the perfect catalysts to improve the loss control department’s efforts.

Even insurer-housed claims departments can glean the data they need to help safety managers improve processes. “It’s a total business attitude,” Waters said. “If claims is pulling from the insurer and passing onto the loss control department what they’re seeing, loss control should then be able to pass that to the clients.”

Julian Ehrlich, senior vice president of claims at Aon Risk Solutions Construction Services Group, underlined another reason a larger shift in communication is necessary. “The environment in which claims take place is often a legal environment, whether you’re talking workers’ comp, builder’s risk, GL [general liability] or other lines of coverage. And there are constantly changing rules and laws that can have a direct impact on the company’s financial statements,” he said.

Additionally, companies often overlook the cost to the bottom line of inadequate safety programs. Claims managers can help to communicate that information to both safety teams and management. Using claims reports, Jenkins said claims teams can build a case to budget safety planning into future projects.

“The safety professional can take that information and take snapshots of severe claims using that history to show what happens when they don’t plan,” Jenkins said. “Then they can justify the cost of factoring in safety.”

Changing the Culture

It shouldn’t take much for claims and safety to become more aware of and interactive with each other, according to experts. Waters said it’s as simple as an email from the underwriter or even the claims adjuster. Yet communication doesn’t occur because each department isn’t cognizant of the other’s work processes.

“Claims adjusters aren’t going to look at it from an aspect of the account renewing in four months, and the underwriter isn’t going to look at it and think to email the adjuster and find out what’s going on with claims,” he said.

Nevertheless, Jenkins said, ongoing communication among safety, risk management, and the claims community is a culture that’s easy to adapt to and one that can help to prevent future losses.

He remembers one claim early in his career that punctuates that point. When investigating a crane accident on a job site, he discovered a truck-mounted crane with its outriggers extended. The outriggers should have been stabilized with timbers, but in this case, the workers had taken shortcuts.

“One of the outriggers was on top of a piece of plywood, and it was cracked. One of the root causes of that incident was the [workers] were working in soft soil. Also, they were under the gun to keep the project moving. But I believe [the accident] could have been prevented had [the workers] pre-planned to have solid timber at the job site,” he said.

In addition to pointing out shortcuts that have caused accidents, companies can use their claims department to teach construction workers and teams smarter ways to do their jobs. Waters said a company’s culture has to be safety-focused, but claims departments can make a strong case for implementing safety programs and teaching workers claims processes.

He emphasized that older workers, in particular, need to understand their limitations. “The safety director needs to make older workers feel [like a] part of the safety program and the company, and shown that they are more likely to have accidents than the younger individuals. Statistics are a great way to prove it.”

Ehrlich believes the best way to reduce loss and the number of claims is to establish partnerships with key players in the loss control and claims process. He promotes educating the contractor policyholder in the insurance process, and creating a partnership among the contractor, insurer, broker and with defense counsel, if applicable.

If all parties understand the needs and requirements of each other, the business relationship will be stronger, and the better equipped they’ll be to handle claims.

“The more these parties work together before claims happen to establish a process — to allocate risk of loss before losses happen, and to have steps in place from practical, field-level to document-level — the smoother it [will be], the more pain-free it [will be], and the better the results,” Ehrlich said.

Working cooperatively helps safety departments with pre-planning efforts, according to Jenkins. There’s a wealth of information to share, he said. Claims can be a valuable resource, providing key data that can vastly improve operations. He suggested using compiled loss data to understand loss trends and to build safety into future projects.

“If you look at accidents and start peeling back the layers, you’ll see how preventable they are,” Jenkins said.

Understanding claims from a contractor’s perspective is essential to building a better partnership with construction clients. Because what seems second-nature to claims departments could be information critical to the construction client’s understanding of what it takes to improve claims handling, said Julian Ehrlich, senior vice president of claims at Aon Risk Solutions Construction Services Group.

Claims professionals should educate construction clients on the following processes:

• Accurate incident/accident reporting. Communicate to contractors what goes into a report and what shouldn’t. Realize there will be many eyes on those reports, possibly years later, and anything written in the reports may affect the outcome of the claim.
• Tag and bag evidence. Even tools and clothing should be documented and saved for investigators.
• Immediately identify witnesses. Know who was in the area and what they saw. Get their contact information for authorities.
• Identify alternatives. Know what safer options were available that the worker knew about but didn’t employ.
• Keep sign-in or attendance sheets for safety meetings. When a loss occurs involving a worker and he or she had been instructed at a recent meeting not to do something but did, that could be important for the claim.