The Hidden Costs of Construction Accidents
Out of all the industrial sector jobs, construction is arguably the most dangerous profession. The very nature of the job is complex and riddled with peril. In fact, according to OSHA’s statistics, the majority of fatal injuries belong to the construction sector. Its fatal injury rate is higher than the national average for any other industry in this category.
The high cost of accidents is one of the major concerns for employers in the construction sector. Many people do not realize the high cost of these accidents, which is mainly due to the fact that most of these costs are not obvious. It is crucial for construction employers to control these costs for the success of their businesses.
For example, a worker who is gravely injured due to an accident might be sidelined for months, or even years. Such a situation can drastically affect their financial situation. Other than the worker’s financial situation, the cost of the accident can have a severe impact on the company’s bottom line. Between workers’ compensation insurance premiums and embarrassing OSHA citations, there is a lot to lose for a company.
Direct Costs for Employers
Let us take a look at the most obvious costs that befall an employer in case of a workplace accident. It can include the costs of:
- Workers’ compensation claim
- Medical bills in case the workers’ compensation claims do not work out
- All legal costs in the aftermath of the accident, and possibly increased insurance premiums
- The costs of damage to any uninsured property
These are just the costs for employers on the surface. Often, indirect costs can outweigh the direct costs.
Indirect Costs for Employers
Other than the obvious financial aspects that employers cover in case of accidents on construction sites, there is a slew of costs that can usually be greater. These indirect costs may include but are not limited to:
- Spoiled work due to the accident
- Loss of production
- Time lost from work by the injured employee
- Replacing the injured employee
- Loss of efficiency due to crew breaking up
- Time lost for replacing the damaged equipment
- Replacing the damaged equipment
- Training a new worker
- Loss of time by supervision
- Overhead costs while work was disrupted
- Administrative time lost
If you weigh the direct and indirect costs for employers on a scale, it is clear that indirect costs can be more significant.
Direct Costs for Employees
Employees also stand to lose a lot in case of workplace accidents on construction sites. When you are on the job, there are days you see yourself putting in additional hours on the clock every shift (if it is possible) to get a hefty amount of overtime pay in the long run.
While the employer might be dealing with the immediate costs of medical bills, workers’ compensation insurance premiums, and property damage, a worker’s costs can include, but are not limited to:
- Losing their regular wages
- The loss of possible overtime pay
These are on the surface costs for an employee who is involved in a construction accident. Just like the employer, an employee also has indirect costs to deal with.
Indirect Costs for Employees
The indirect costs of a construction accident for an employee might not be financially as expansive as they can be for an employer. That being said, they can be significant considering the fact that they are compounded with the direct costs.
Indirect costs for employees can include but are not limited to:
- The possible inability to be productive even after recovering
- The physical pain, suffering and mental anguish of suffering from an accident
- Decreased active participation with friends and family
As you can see, the true costs of construction accidents go beyond just the financial costs for an employee.
The Need to Address Construction Safety
Understanding the true scale of the problems that can result from construction accidents should inspire better action from both employers and employees. It also highlights the importance of having adequate crisis management plans in place to ensure a minimal amount of loss in case of workplace accidents.
In case of any incident resulting in injuries, the situation is assessed, possible causes of the problem are determined, and the corrective course of action is taken accordingly. If it is ever found that somehow the employer was even partially responsible due to negligence, it can even incur the damage of bad press and subsequent loss of reputation and possible criminal charges .
Ensuring the safest possible work environment will ensure a workplace that is less prone to accidents, and well-equipped to deal with difficult situations with an appropriate response.