1	REDUCING RISK: CONSTRUCTION SAFETY The Owners’ Role in Construction Safety: The Compelling Economic Realities Beyond the Moral Obligation Construction Industry Coalition Council Forum August 2, 2005 Michael A. Youngblut Vice President Hess Egan Hagerty & L’Hommedieu
2	Facts & Figures Everyday 1300+ construction workers are injured or become ill—three don’t go home at all Construction employs seven percent of the workforce, yet accounts for twenty percent of all job-related fatalities Seventy–five percent of the fatalities are laborers most of whom perish in trenches Ninety percent of all construction companies employ less than twenty workers Thirty-three percent of all construction fatalities involve falls; twenty-six percent involve transportation incidents
3	Economic Figures and Program Costs Construction accidents costs $10-25 billion per year This figure includes both direct (insurable) and indirect costs Ratios comparing indirect costs to direct cost vary widely—from 4:1 to 20:1 Cost of a safety program is estimated to be 2.5-4% of direct labor costs or .625 percent of total project costs or eight percent of payroll
4	Emerging Attitude About Safety Traditional Legal Mandate & moral obligation OSHA regulations & fines Inspection oriented Line item expense—overhead, cost center Emerging Investment Productivity, quality and profitability Competitive advantage Profit center Safety as a BRAND Courtesy of Arch Insurance
5	Economic Incentive for Owners In 2004, all construction accounted for nine percent of the GDP—Non-residential amounted to $464 billion (46%) Accidents cost roughly three to five percent of the total amount spent on construction annually Accidents in 2004 cost “owners” between $14 and $23 billion (non-residential) With the aid of solid safety practices throughout the industry, a thirty percent reduction in accidents is reasonable—ample economic incentive!!
6	Does Owner Involvement Make a Difference? Projects where owners exhibited aggressive project involvement had almost six times fewer injuries per 1000 employees according to a Construction Industry Institute study
7	What can Owners do to get involved and influence a Safe Jobsite? Provide safety and health guidelines that the contractor must follow Require the use of permit systems for potential hazardous activities Require the contractor to designate a responsible supervisor to coordinate safety onsite Discuss safety at owner-contractor meetings Conduct safety audits during construction Require prompt reporting and full investigation of accidents Careful selection of safe contractors—pre-qualification
8	What can Owners do to get involved and influence a Safe Jobsite? Contractual safety requirements Proactive involvement in the safety practices of projects Establishment of and funding for a safety recognition program Require a written safety program tailored to the project Stress safety as part of the contract during the pre-bid walk arounds Maintain statistics of contractor’s accidents Conduct periodic safety inspections
9	What can Owners do to get involved and influence a Safe Jobsite? Set goals for construction safety Be involved in orientation sessions alerting workers to safety hazards on the job Monitor safety performance throughout the project Close out the construction phase with a post contract/safety evaluation Require contractors to have a substance abuse program—including testing Require daily JSA (Job Site Analysis) conducted on the project site Be involved in the contractor’s safety training program—require minimum training requirements Approve job site safety personnel—review resumes Require a safe policy signed by the construction CEO Put “safety” ahead of the “schedule”--priority
10	Additional Resources Construction Users Round Table, curt.org, “CURT Owner Safety Blueprint” (R807), “Construction Safety: The Owner’s Role” (UP802) International Risk Management Institute, irmi.com, “Owner Safety Leadership” Construction Industry Institute, construction-institute.org, “The Owner’s Role in Construction Safety”
11	NOTICE IF YOU’RE NOT CONFRONTING AT-RISK BEHAVIOR…. YOU’RE REINFORCING IT.
12	REDUCING RISK: CONSTRUCTION SAFETY The Owners’ Role in Construction Safety: The Compelling Economic Realities Beyond the Moral Obligation Construction Industry Coalition Council Forum August 2, 2005 Michael A. Youngblut Vice President Hess Egan Hagerty & L’Hommedieu