Why serious safety claims can cost you $1m before they get to court

Safety should be at the top of every construction company’s list of imperative business values, and not simply because of the effect a poor safety record has on employee morale. When employees are disaffected by neglect of safety issues, staff turnover increases, training costs soar, and productivity plummets.

Compounding the hit to profits is the ferocity of fines imposed, which regularly stretch into the hundreds of thousands of dollars.

Recent examples of fines awarded include $360,000 levied on three companies and a works manager when an employee of South Coast Excavations was killed in an onsite accident in 2008.

In 2013, two companies and a company director were ordered to pay $147,000 in fines after being found guilty of breaches of the Occupational Health and Safety Act 2000 which led directly to injuries sustained by an electrician who fell 3.4 metres at a residential building site.

There are dozens of other fines imposed on construction companies by courts across Australia, Attempting to reduce workplace safety abuse, many states have introduced fines which can be levied on-the-spot and upon inspection by workplace inspectors. These fines can run to thousands of dollars.

Fines aren’t the end of financial penalties

Of course, fines are only the tip of the iceberg when it comes to counting the cost of injuries on construction sites. A fined company will also be liable for third party legal costs but even this will be insignificant when compared to potential ongoing payments to injured parties.

A company found responsible for injury may be liable for the rehabilitation costs of the injured person: and at an average of $100,000 per year, it’s easy to see how a serious injury can mount to millions of dollars.

How you can avoid crippling safety claims and fines

Here are four things you can do to reduce the potential of expensive onsite injury and on-the-spot fines:

  • Be proactive with risk identification and have the right controls in place

  • Keep good records, which are readily accessible

  • Have a strong investigation process, without blame

  • Introduce ongoing holistic safety training and education by respected specialists

As one of our Tier 2 construction company clients discovered, having a comprehensive safety training program in place can reduce time lost through workplace injury to zero. That’s not only going to increase productivity and reduce related employment costs, but eliminate potential safety claims and related charges.