What kind does your company have?
Is it formalized with buy-in from the owner all the way down to the newest employee? Or is it in place because it is the only way you can bid all the jobs you want, and OSHA says you have to? Most contractors fall in the middle. Safety is important, but not to the point where we let it delay a project from being completed on time. Or, we pay a lot of attention to safety immediately following an accident, then we slowly get lazy about it until someone gets hurt again…
Listen folks, the insurance market has been soft(less expensive and more readily available) for contractors for the last few years. According to industry experts, the next hard market is right around the corner and having an effective safety program, is a good way to show insurance underwriters that you care about limiting the amount of claims they have to pay and care more about whether all your employees get home every night instead of getting the job done as fast as you can. Having a safety handbook is helpful, having safety meetings is helpful, wearing hardhats and other PPE is helpful. Putting them all together is VERY helpful and believe it or not, will have a bearing on your insurance pricing.
Is this what your safety program looks like? 
If so, now is the time to get it a real helmet.
Was doing a little after lunch reading today about what’s going on with the stimulus package, and whether any of these “shovel ready” projects that everyone has been talking about are actually underway. Didn’t really find the answer I was looking for, but it was a pleasant break in the hourly updates on which of the AIG guys decided to relinquish their bonus checks they received for ruining their company. But I digress…
Wisconsin just began construction on a $1.9 billion highway modernization project. Rhode Island, a little closer to home, has the shovels fired up for $150 million worth of sewer and drinking water projects. And the new Governor of Illinois, Pat Quinn, is urging lawmakers to pass a bill that will use 26 Billion on a statewide reconstruction project.
Not sure about you guys, but I’m enjoying reading about positive things in the news again. Also found that it’s pretty nice to share good news with friends, co-workers, bloggers, and anybody else that doesn’t spend their days spitting doom and gloom.
To read more about the shovel ready projects going on around wherever you are, swing on by http://www.agc.org/
And if somehow, you are a contractor, and are reading this…make sure to do you due diligence when hiring new workers. I know it can be hard to think about doing background checks when you have had 25% of your workers laid off for the last few months, but the last thing you want, is for an untrained/unqualified/unsafe worker to have a worker’s comp claim that follows your insurance program, and experience modification factor around for the next few years. Dollars spent preventing injuries now will bring the biggest ROI in the long run.
For the 20th month in a row, US construction jobs have been on the decline. Some people are putting the total number of construction workers that are unemployed right now at or around 20%, the highest for any industry. There are plenty of places to place blame for this, but a growing number have put the fault on the bid lists. A few years ago, most contractors would see 3, maybe 4 other bidders on a specific non-residential job, now that number has grown to an average of 25-30! Basically, cheapest price wins. Except now, the bottom has fallen out on what “cheap” used to mean. Various contractors I’ve spoken with have said they’ve seen bid lists recently with quotes so low, the company would be losing money on the deal!
So what does this have to do with fraudulent work comp claims? The answer is a lot. Unemployment checks dry up in CT after 26 months(1/2 a year), while work comp payments, depending on the severity and permanancy of the injury, can last a lifetime. Does this mean that we will see a spike in contractors jumping off roofs and running eachother over to go out on comp? NO. But it does mean that we should anticipate seeing a spike in sprains, soreness, and myriad back “injuries”. As an owner, or the person who handles finance and insurance for construction companies, it is your duty to be vigilant. If any sort of injury reeks of suspicion, it is probably fraudulent. I have covered the “monday morning quarterback” issue here before, but the new trend in fake injuries is to go out on comp rather than go out on unemployment. If the worker senses unemployment is coming, it can be a “good” pre-emptive strike on their part to “pull their back”, which in this case is not to have the comp system pick up their medical bills for a softball injury over the weekend, but more so to pay their bills while they are unemployed. And if they have been reading the same industry publications I have, no one is predicting the construction draught to be over until early 2010. Be watchful folks, even the most honest and loyal employee will do things you don’t think they would be capable of if it means the difference between feeding or not feeding their family.
insurance cat
With parts of our country experiencing a 10.6% unemployment rate (sorry to pick on you Michigan), the commercial insurance industry is expecting a jump in work comp claims. The reason is obvious. If workers are anticipating or are worried about layoffs in their future, going out on a comp injury is an easy way to be out of work and still pay your bills. The purpose of this is not to get you in the mindset that every claim between now and the end of the recession is fraudulent, but at times like these it pays high dividends to pay extra attention. I’ll be adding a few more claim scenarios in the next week or so, but since the Super Bowl was so recent, let’s address…
-The Monday Morning Quarterback.
This is when one of your workers injures themselves early on Monday morning. Sometimes these claims are legitimate, but more often than not, they are a result of something that took place during the weekend(softball, yardwork, miscellaneous horseplay).This isn’t really a new trend, in fact, it’s probably the oldest work comp scam around, yet monday in and monday out, it happens.
So Joe Employee comes in to work on Monday as if nothing it’s just the same as any other Monday, he goes to the jobsite and starts his day. At around 9:15, Joe Employee goes to the foreman to tell him that he threw his back out lifting something. No other employees were around to see the incident that caused the back problem for Joe. What should the employer do?
1. Have the injured employee show you where the incident happened and have him/her write a statement about how it happened as well as how it could have been prevented. The answer will usually be something along the line of “I should have had someone help me lift this”
2. Send the EE to the health clinic to be examined. This can be huge in determining if the injury he/she claims to have, could have been caused by what they say caused it. Soft tissue injuries are a tough thing to diagnose with 100% accuracy, so take the results with a grain of salt.
3. Ask around. See if any other employees saw Joe over the weekend. You’d be amazed how often the results of this inquiry end with “I was at Joe’s house all weekend putting up drywall!”.
I don’t write this kind of thing on here to force a wedge between employers and employees. It is here as a rough guideline of things to pay attention to, and to give you some insight into what I see on a day to day basis and how it could effect the profitability of your company. And in these trying times, a normally straight shooting employee might have to bend their morals to provide for their familes. Or just maintain the best safety culture and safest jobsite anyone has ever seen and no one will get injured!
