Construction Risk Blog

Does Your Construction Jobsite Safety Program Need a Jump Start?

Does your safety program need a jump start?
The medical profession has learned that most of us aren't going to eat a healthy diet and exercise regularly. That's why they've invented Lipitor, beta blockers and other drugs that will help delay the inevitable. The ultimate rescue device is the AED or Automatic External Defibrillator. With one of these gizmos we can be just like the doctors we see on TV calling out "Clear", applying the paddles or pads, and shocking the heart back into its normal rhythm. AEDs save a lot of lives and you see them everywhere now, from hallways in buildings to construction jobsites.

Every construction company needs a healthy diet of safety training to prevent worker injuries and avoid excessive workers compensation insurance costs. Do you have a safety culture that constantly reinforces the importance of safe work practices or is it almost time to prime the defibrillator paddles because disaster has struck and your experience mod rate (EMR) is about to enter the RED Zone?

Unfortunately, the average construction company is like the average person. We want to implement the quick fix when we receive the diagnosis. We don't want to proactively do the right things every day so we avoid the problem in the first place. As individuals, we'll go on the starvation diet and get ourselves back in shape but we won't commit to a regular practice of diet and exercise.

A construction company can act the same way. Safety doesn't become a priority until something bad happens and insurance costs spike. Then, instead of focusing on the cause i.e. unsafe workers, you go on the equivalent of a starvation diet, going out to bid to buy cheaper insurance. Just like a Yo-yo diet, you get into a circular loop because you never treat the cause.

Construction companies, like individuals, have a choice to make. You either stay focused on diet/exercise/safety OR you endlessly bounce back and forth between the edge of disaster and recovery, never knowing what it's like to always be in the safe zone.

Don't wait until your company requires the equivalent of an AED. Hire a Risk Advisortoday and create a permanent culture of safety. It will be the best investment you make this year.

When Buying Cheap Insurance Leads to Disaster

Bad insurance decisions can sometimes have catastrophic consequences for construction companies. In most cases, cheap insurance is the culprit.

We came across a very successful third generation company with a large, loyal client base. But they had an insurance problem. Typical workers comp claims for one year usually totaled $50 - $100,000. Now they had a year with $1M in claims, ten times the average. Their EMR (Experience Mod Rate) had spiked to 1.24 costing them an extra $100,000 per year.

How does that happen? Two things had gone wrong. They chose an insurance company selling cheap insurance. They chose an insurance agent who provided no services to help them with their problems.

When we arrived on the scene (Risk Advisors to the rescue), their workers comp was Code Blue. We needed to prime the paddles and get the patient stabilized. When a company of this size has a million in claims in one year it isn't just bad luck. They had been buying cheap insurance from insurance agents for too long and it finally caught up with them.

How does a Risk Advisor approach this challenge differently than an insurance agent? An insurance agent has no tools in the toolbox other than insurance products. Unfortunately, this wasn't an insurance product solution. A Risk Advisor has a wide range of services and when the patient has no pulse, you need to diagnose quickly and then begin treatment. Here's what we did:

• Explained to management the financial consequences of a high EMR (they were stuck with that bad year for three years at an extra cost of $100,000 per year). They had to take immediate action because another bad year in the formula would compound the problem

• Obtained management's buy-in to invest in safety

• Provided customized safety training to all employees at all locations to create a safe culture throughout the company

• Trained middle management to understand the importance of a RTW (Return to Work) program. They needed to understand both the financial consequences as well as the importance of a quick recovery for the injured worker

• Worked with the HR department to manage all open claims for prior years (If you read my last post, this is another important distinction between a Risk Advisor and an insurance agent. Insurance agents don't service policies they didn't sell. A Risk Advisor does whatever it takes to solve the problem)

• Intervened with prior carrier (the one with the cheap insurance) to make them manage their claims properly so our client wasn't unduly penalized in their EMR.

Fortunately, this story has a happy ending. The patient was resuscitated before it was too late. They suffered for three years but their EMR is about to drop 40 points and return to normal. They're going to save $100,000 per year going forward AND provide a much safer workplace for their valued employees.