Construction Industry Roundup: Safety Professionals, Committees, and Evolving Insurance Strategies

Ensuring workplace safety and navigating insurance complexities are vital to maintaining operational integrity and legal compliance. This roundup delves into two critical aspects of the industry: the availability of safety professionals and the strategic role of safety committees in mitigating workplace hazards, alongside the evolving landscape of construction insurance. By exploring topics that our thought leaders believe should be kept top of mind, we aim to provide comprehensive insights and actionable strategies for construction companies striving to enhance safety and manage risks effectively in an ever-changing environment.  

The Availability of Full-time and Part-time Safety Professionals 

The availability of full-time and part-time safety professionals in companies varies significantly based on factors such as company size, industry, and jurisdiction. For instance, small companies with 0-50 employees often do not employ full-time safety professionals, relying instead on part-time staff or assigning safety duties to existing managers. Only about 10% of these small companies have a dedicated full-time safety professional. In contrast, medium-sized companies with 51-200 employees are more likely to employ at least one full-time safety professional, with approximately 30-40% doing so. Large companies, those with over 200 employees, almost always have multiple full-time safety professionals to manage the complexities of occupational health and safety, with around 80% of these firms employing such professionals (American Staffing Association and HSI). 

Industry-specific factors also play a crucial role in determining safety staffing levels. High-risk industries such as construction, manufacturing, and chemical processing are more inclined to employ full-time safety professionals due to stringent regulations and higher risk environments, with over 70% of these companies having full-time safety staff. Conversely, low-risk industries, including many office-based businesses, typically manage with part-time safety staff or external safety consultants, with less than 20% employing full-time safety professionals (HSI and United Safety Professionals). Additionally, jurisdictions with stricter safety regulations, like California, New York, and Cook County, mandate higher safety staffing levels, compelling companies in these areas to employ full-time safety professionals to comply with local and federal OSHA standards (United Safety Professionals). These staffing models are influenced by various factors, including the degree of hazard, workforce dispersion, and the organization’s overall safety culture (HSI). For comprehensive insights, industry reports from organizations like the American Staffing Association provide detailed data and guidelines tailored to various business scenarios and regulatory environments. 

Establishing a safety committee.  

The importance of establishing a safety committee within an organization becomes evident when examining both the preventive and reactive measures associated with workplace safety. A safety committee typically comprises employees from various levels within the organization, including executives, supervisors, and front-line workers. These committees meet regularly to review near misses, accidents, and safety concerns, and to devise strategies to mitigate potential hazards. 

The Necessity of Safety Committees 

Studies have shown that organizations with active safety committees tend to have significantly lower incident rates compared to those without such committees. According to the Occupational Safety and Health Administration (OSHA), companies with well-functioning safety committees see a reduction in workplace injuries by as much as 25%.¹ These committees enable a comprehensive review of safety practices, providing a platform for workers to voice concerns and suggest improvements based on firsthand experiences. This collaborative approach not only enhances safety protocols but also fosters a culture of safety awareness and responsibility throughout the organization.²

Reactive to Proactive: The Shift in Mindset 

Organizations often realize the necessity of a safety committee after experiencing a critical incident or a series of near misses. For example, a company without a safety committee may struggle to identify the root causes of accidents, leading to repeated issues and increased claims. In one case, a construction company without a formal safety committee faced rising injury rates and mounting insurance costs. After a severe accident, they established a safety committee, which quickly identified several preventable factors, such as inadequate personal protective equipment (PPE) and insufficient safety training. Within a year of implementing the committee’s recommendations, the company’s incident rate dropped by 30% and their insurance premiums decreased by 15%.²

A Case for Comprehensive Involvement 

The effectiveness of a safety committee lies in its composition and the inclusiveness of its discussions. Bringing together executives, supervisors, and front-line workers ensures that all perspectives are considered. Executives might believe they understand why accidents occur, but without direct input from those on the ground, their assessments may be incomplete. Supervisors, while more connected to daily operations, still may not capture the full picture. It is the front-line workers who provide crucial insights, such as issues with PPE or unsafe practices that occur due to practical challenges. A well-rounded committee can therefore address these issues more effectively, leading to substantial improvements in safety.³

In conclusion, the establishment of a safety committee is a critical step for organizations aiming to improve workplace safety proactively. Such committees not only reduce incident rates and associated costs but also enhance the overall safety culture within the organization. By involving employees at all levels, safety committees can develop and implement effective safety strategies that address the real issues faced by workers, ultimately creating a safer and more productive work environment. 

Navigating the Shift in Construction Insurance: Specialization and Risk Management 

In recent trends, insurance companies are increasingly cautious about providing coverage to general contractors who engage in diverse construction projects like apartments, condos, and industrial buildings. This shift stems from a desire to target more specialized builders and avoid the risks associated with broad, opportunistic construction activities. Carriers are implementing stricter policies and exclusions for specific types of projects to manage their risk exposure better. For instance, some insurance policies now exclude coverage for apartments, condos, and single-family homes, steering contractors away from these high-risk projects. This strategic exclusion aims to prevent potential large-scale claims arising from construction defects, such as faulty workmanship or materials, which can lead to significant legal and financial liabilities​ (Insurance Journal)​​ (Insurance Journal)​​ (Insurance Business)​. 

These changes are influenced by the broader economic environment, including the ongoing housing crisis and fluctuating interest rates. With interest rates remaining high, homeowners are less likely to sell their properties, locking many into their current homes with favorable mortgage rates. This situation has led to a greater demand for rental properties and, subsequently, an interest in converting rental apartments into condominiums. Such conversions present additional risks for insurers due to the potential for multiple owners discovering defects simultaneously, leading to class action lawsuits. Furthermore, the construction industry is grappling with rising costs for materials, labor, and insurance premiums, driven by inflation and supply chain disruptions. These challenges emphasize the need for contractors to adapt by understanding their risk profiles and securing appropriate coverage to protect against unforeseen liabilities​ (Insurance Journal)​​ (Insurance Business)​​ (For Construction Pros)​. 

References 

^{1 Occupational Safety and Health Administration (OSHA). “The Importance of Safety Committees in the Workplace.” OSHA, 2022.}

^{2 National Safety Council (NSC). “The Role of Safety Committees in Reducing Workplace Incidents.” NSC, 2021.}

^{3 Insurance Information Institute (III). “Case Studies on the Impact of Safety Committees.” III, 2023.}