Two separate construction accidents in Boston recently caused a stoppage on projects by the region’s largest construction company. According to reports, Suffolk Construction halted work at multiple job sites on May 6 in order to “reinforce safety awareness” after multiple workers were hurt when a former power plant under construction collapsed May 4, followed by an accident at another job site May 5 when a worker fell 30 feet.
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“These were pretty big news stories for us here in the Boston community,” he said, with the most recent incidents shutting down a subway stop and delaying traffic while officials checked the area for further hazards. “Any time you are talking about injuries, fatalities, or a stoppage of work, that is at the more extreme end when it comes to a construction accident. A lot can go wrong in construction, and the implications of that can be severe.”
By May 10, Suffolk Construction had completed its safety evaluations and resumed work at its Boston job sites, saying in a statement that the company would continue to “aggressively maintain the highest levels of safety,” WCVB reported. From injuries to temporary shutdowns, construction accidents can have far-reaching consequences. In addition to the human toll on injured workers and their families, serious incidents can trigger OSHA investigations, regulatory penalties, work stoppages and significant financial losses. In many cases, investments in workplace safety can help prevent these costly outcomes.
Construction workers at risk for falls, lifting injuries
When construction accidents occur, losses could be covered under a company’s Workers’ Compensation Insurance, Commercial General Liability (CGL) Insurance, Excess Liability Insurance, Builder’s Risk Insurance, or Professional Liability Insurance.
According to the National Institute for Occupational Safety and Health, falls are the leading cause of work-related deaths in construction in the U.S., causing over 1 in 3 construction worker fatalities in 2019. The same year, falls, slips and trips caused 32% of nonfatal injuries requiring time off work in the private construction industry, according to the U.S. Bureau of Labor Statistics. In British Columbia, Canada, falls were the cause of 4,050 worker injury claims in 2021, hundreds of which were linked to the construction industry, CTV News Vancouver reported on March 8.
Construction sites present numerous opportunities for workplace injuries. Some of the most common Workers’ Compensation claims stem from falls, while lifting injuries and strains are also frequent causes of significant losses.
Frequent exposure to heavy lifting, elevated work areas and other physical hazards contributes to the inherently higher risk associated with the construction industry.
These injuries can leave employees unable to work for weeks, months or longer. In 2019, fall, slip and trip claims kept workers home for a median of 28 days, the U.S. Bureau of Labor Statistics reported. Workers’ Compensation Insurance, which is regulated at the state level, is essential for any employer and can pay for injured workers’ medical expenses, a portion of their salary while they are unable to work, and any rehabilitation needed to get them back to work. It can also provide death benefits if a worker is killed in an accident.
Workers’ Compensation Insurance plays a critical role in helping injured employees recover while protecting employers from the financial impact of workplace injuries. However, effective risk management and accident prevention remain the most important tools for reducing losses and protecting workers. When injuries do occur, Workers’ Compensation Insurance can provide the support needed for employees, employers and their families.
Accident-related bystander injuries, property damage can cause further losses
Construction accidents are a risk not only to the workers on site, but also to the general public and nearby property. In April, a woman in Chicago was seriously injured while walking on a sidewalk when debris from a building fell on her, FOX 32 Chicago reported. The building reportedly had scaffolding placed on the sidewalk recently because of a similar incident. In January, a man suffered serious injuries after concrete fell from a construction site in Yorkville, Ontario, CP24 News reported.
A construction company’s CGL Insurance can cover expenses related to third-party bodily injury and property damage, as well as legal defense in the event of a lawsuit. Defense costs are an important component of the policy, Sullivan said.
“Whether there is a pedestrian walking by and they get hit by a fallen piece of roofing or other types of construction material, or damage done to nearby buildings, those are the main types of expenses you are looking at,” he explained. “There are tailored insurance programs for contractors and construction companies when it comes to the forms and endorsements.”
Due to the risk of severe, high-cost incidents, construction companies also typically require Excess Liability Insurance. “When you have incidents like this with fatalities or major property damage, these claims can rise in cost very quickly,” Sullivan said. “With the tough litigious climates in the Northeast, a lot of the settlements and damage that come with this can really be substantial. The last thing you ever want an insured to do is have an uncovered loss or not have enough insurance limit to cover the cost of that settlement or damages.”
Excess Liability Insurance is “a very hot topic within the construction industry right now,” Sullivan added. “When it comes to trying to save on costs, excess limits is not the place to cut back,” he said. “Many owners and developers will require a certain amount of limit.”
Contractual requirements should always be considered when selecting insurance coverage, Sullivan noted. It is also important for general contractors, real estate developers and others to obtain certificates of insurance for subcontractors and check for any necessary hold-harmless wording. “Those are two important things to really keep your eye on,” he said. “The general contractor needs to be properly insured and use proper contracts with subcontractors to ensure everyone is carrying the correct coverage and limits so that the transfer of risk can be there.”
Other types of construction-related lawsuits, including those involving errors or third-party loss of income related to construction delays, may be covered by a firm’s Professional Liability Insurance, Builder’s Risk Insurance or other policies.
“Talk to your insurance professional about other important coverages,” Sullivan said. “They can tailor coverage for your specific operations. If you are in the construction industry, you want to work with a retail broker familiar with the construction fields and that has insurance carriers that can target and have the specific appetite to underwrite and perform risk control for the construction industry in particular.”
Reduce accidents with risk management, insurance resources
Large construction companies often employ full-time risk managers to oversee workplace safety and regulatory compliance. Smaller firms that may not have the resources for a dedicated risk manager can benefit from consulting with third-party loss control specialists and utilizing the risk management resources available through their Workers’ Compensation insurance carriers.
This is also important when it comes to CGL Insurance and other policies, Sullivan added. “Ask and be willing to accept the resources that are out there,” he advised. “Whether it is with your retail agency or insurance carrier, there may be loss control measures that can be applied to your everyday business going forward. Do not be shy about asking for those resources that might be at your disposal based on the insurance program you are paying into.”
Construction firms should understand that their workplace injury history is an important underwriting consideration for insurance carriers. A poor loss history can lead to higher premiums, reduced market availability or greater difficulty obtaining coverage.
Although Workers’ Compensation Insurance is regulated at the state level, carriers can differ significantly in the services they provide. Companies should evaluate not only pricing but also access to specialized construction expertise, workplace safety resources, loss control services and other value-added offerings that can help prevent claims and improve risk management results.
