Managing Your Risks and Liability
Any construction project involves a risk of liability for damages for either personal injury or property damage. Safety directors take steps to avoid that risk by helping to create a safe workplace, putting in place proper work procedures, and using the proper contractual provisions.
Owners, designers, and general contractors will try to push risk down the line, and the subcontractor is usually at the end of the line. For the subcontractor, there is rarely any place to push risk, so subcontractors must be able to manage it.
The best way to avoid risk is to reduce claims, both in frequency and severity, says David M. Lewin, of the Chicago law firm Tribler Orpett & Meyer P.C. To reduce claims, safety professionals have a set of tools: the programs, policies, and procedures that are set in place at the company.
Gone are the days when risk management was considered to be simply the purchase of insurance at the best price to cover risk. That has changed with the advent of new rules, regulations, and requirements, coupled with recent case law. The once-sole remedy for worker injuries—workers’ compensation—has been set on its ear. A litigious climate has resulted, says Mike McGawley, of II in One, a Chicago-based subcontractor.
The question that now prevails in this climate is how best to position a contractor for the inevitable lawsuits that will happen. Safety professionals are positioned to have the most impact on a company’s legal position. That’s because the safety professional is the primary individual to make safety policy in a subcontractor’s firm. From the safety policy statement to the corporate safety manual to job-specific safety plans, safety professionals are continually making policy.
Not Too Specific
Compliance with regulations is important, but those are minimum requirements. Safety professionals must incorporate established best practices into the safety manual, plans, policies, and procedures. However, says Lewin, this is an area where the safety professional must walk a thin line. He or she must balance the need for compliance and the safety and health of employees with the current legal climate.
This is where the wisdom, “If you give enough rope, you may end up hanging yourself,” applies. You need to communicate goals, outline employee involvement, and provide for accountability. But it is better to be vague while still making the point than to be specific and right on the point.
When drafting a safety manual, the safety professional must keep two goals in mind. First, the safety manual should serve to communicate proper procedures, rules to avoid accidents, and methods to respond to accidents that have occurred. At the same time, the safety manual must be drafted in such a way as to avoid imposing additional liability for injuries sustained, says Lewin.
Safety manuals for construction companies frequently include broad statements of policy. Frankly, there is no reason to include any such statement, says Lewin. Obviously, the purpose of the manual is to avoid accidents. There is no reason to make statements such as: “It is the policy of this company to do everything possible to avoid accidents.” Writing that only opens the contractor to questions at trial as to whether, in fact, everything possible was done. The law imposes certain duties on contractors. The safety manual should not take on a greater duty, according to Lewin.
Keeping Commitments
The contractor must realize that the safety manual will be dissected at any personal injury trial. If the safety manual has investigation forms, the use or lack thereof will be questioned. If the contractor does not intend to use investigation forms on each and every accident, do not include them in the safety manual. The safety director can always maintain such forms to be used on a case-by-case basis. They need not be included in a manual for general distribution.
What’s more, the safety manual should not include duties that will not be regularly fulfilled. The safety manual of one Chicago-area general contractor states that “Management Will. . . 3. Require all subcontractors to abide by this policy.” If that was the not the case in practice, the phrase should not have been included in the manual. Adding that phrase may serve to impose liability on the contractor where the law otherwise might not.
The same manual provides that “Job Superintendent will. . . 1. Be completely responsible for onsite safety.” That contractor, despite that language, argued that it was only responsible for the safety of its own employees. If that was the case, the safety manual should have been more specific or, better yet, should not have included that line at all.
Neither the safety manual nor any other document should rank violations in terms of “seriousness.” Never make statements such as “a certain violation is a Grade 1 violation,” or that others are “Grade 3 violations,” and repeating a violation makes it a “Grade 5 violation.” Doing that serves no real purpose and will only open the contractor to liability at trial.
If the safety manager feels that a safety violation was serious and intends to document it for the personnel department or otherwise, then the nature of the violation should be described in detail. Assuming that nobody was injured by the violation, the safety manager can personally tell the individual in question about the seriousness of the violation. Ranking violations serves no purpose other than to invite liability.
A well-thought-out drug-testing program is an essential component to any safety program. But the motivation behind the program should not be to catch people using drugs illegally; rather it should be geared to assist individuals with third-party intervention and return them to work as soon as possible. The drug-testing element should provide employees with direction and include a mandatory self-help component. Noncompliance with your own program many give you many problems, one of which is liability.
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A comprehensive return-to-work program is also a strong component of any safety program. The safety professional needs to have knowledge of an individual’s physical limitations as well as the individual themselves. Is the employee aggressive about returning to work, or not? Although it is advantageous to have an aggressive return-to-work program, the liability associated with an individual that is not 100% can be very costly. You do not want an injured employee to become re-injured on the job, or even worse, to injure others by failure to perform properly.
When an accident occurs, the risk manager must understand how to respond properly to the accident and how to document it. A key way to manage claims is to reduce them by proper responses to accidents. Mistakes are often made in the investigation that come back to haunt contractors at trial. Throughout the investigation, the risk manager must remember that, very likely, everything done will be a subject of discovery at trial. As a result, notes should go to the point and should not include guesswork or speculation.
Author's Bio: Daniel C. Brown is the owner of TechniComm, a communications business based in Des Plaines, IL.
November-December 2009
Managing Your Risks and Liability
Any construction project involves a risk of liability for damages for either personal injury or property damage. Safety directors take steps to avoid that risk by helping to create a safe workplace, putting in place proper work procedures, and using the proper contractual provisions.
Owners, designers, and general contractors will try to push risk down the line, and the subcontractor is usually at the end of the line. For the subcontractor, there is rarely any place to push risk, so subcontractors must be able to manage it.
The best way to avoid risk is to reduce claims, both in frequency and severity, says David M. Lewin, of the Chicago law firm Tribler Orpett & Meyer P.C. To reduce claims, safety professionals have a set of tools: the programs, policies, and procedures that are set in place at the company.
Gone are the days when risk management was considered to be simply the purchase of insurance at the best price to cover risk. That has changed with the advent of new rules, regulations, and requirements, coupled with recent case law. The once-sole remedy for worker injuries—workers’ compensation—has been set on its ear. A litigious climate has resulted, says Mike McGawley, of II in One, a Chicago-based subcontractor.
The question that now prevails in this climate is how best to position a contractor for the inevitable lawsuits that will happen. Safety professionals are positioned to have the most impact on a company’s legal position. That’s because the safety professional is the primary individual to make safety policy in a subcontractor’s firm. From the safety policy statement to the corporate safety manual to job-specific safety plans, safety professionals are continually making policy.
Not Too Specific
Compliance with regulations is important, but those are minimum requirements. Safety professionals must incorporate established best practices into the safety manual, plans, policies, and procedures. However, says Lewin, this is an area where the safety professional must walk a thin line. He or she must balance the need for compliance and the safety and health of employees with the current legal climate.
This is where the wisdom, “If you give enough rope, you may end up hanging yourself,” applies. You need to communicate goals, outline employee involvement, and provide for accountability. But it is better to be vague while still making the point than to be specific and right on the point.
When drafting a safety manual, the safety professional must keep two goals in mind. First, the safety manual should serve to communicate proper procedures, rules to avoid accidents, and methods to respond to accidents that have occurred. At the same time, the safety manual must be drafted in such a way as to avoid imposing additional liability for injuries sustained, says Lewin.
Safety manuals for construction companies frequently include broad statements of policy. Frankly, there is no reason to include any such statement, says Lewin. Obviously, the purpose of the manual is to avoid accidents. There is no reason to make statements such as: “It is the policy of this company to do everything possible to avoid accidents.” Writing that only opens the contractor to questions at trial as to whether, in fact, everything possible was done. The law imposes certain duties on contractors. The safety manual should not take on a greater duty, according to Lewin.
Keeping Commitments
The contractor must realize that the safety manual will be dissected at any personal injury trial. If the safety manual has investigation forms, the use or lack thereof will be questioned. If the contractor does not intend to use investigation forms on each and every accident, do not include them in the safety manual. The safety director can always maintain such forms to be used on a case-by-case basis. They need not be included in a manual for general distribution.
What’s more, the safety manual should not include duties that will not be regularly fulfilled. The safety manual of one Chicago-area general contractor states that “Management Will. . . 3. Require all subcontractors to abide by this policy.” If that was the not the case in practice, the phrase should not have been included in the manual. Adding that phrase may serve to impose liability on the contractor where the law otherwise might not.
The same manual provides that “Job Superintendent will. . . 1. Be completely responsible for onsite safety.” That contractor, despite that language, argued that it was only responsible for the safety of its own employees. If that was the case, the safety manual should have been more specific or, better yet, should not have included that line at all.
Neither the safety manual nor any other document should rank violations in terms of “seriousness.” Never make statements such as “a certain violation is a Grade 1 violation,” or that others are “Grade 3 violations,” and repeating a violation makes it a “Grade 5 violation.” Doing that serves no real purpose and will only open the contractor to liability at trial.
If the safety manager feels that a safety violation was serious and intends to document it for the personnel department or otherwise, then the nature of the violation should be described in detail. Assuming that nobody was injured by the violation, the safety manager can personally tell the individual in question about the seriousness of the violation. Ranking violations serves no purpose other than to invite liability.
A well-thought-out drug-testing program is an essential component to any safety program. But the motivation behind the program should not be to catch people using drugs illegally; rather it should be geared to assist individuals with third-party intervention and return them to work as soon as possible. The drug-testing element should provide employees with direction and include a mandatory self-help component. Noncompliance with your own program many give you many problems, one of which is liability.
A comprehensive return-to-work program is also a strong component of any safety program. The safety professional needs to have knowledge of an individual’s physical limitations as well as the individual themselves. Is the employee aggressive about returning to work, or not? Although it is advantageous to have an aggressive return-to-work program, the liability associated with an individual that is not 100% can be very costly. You do not want an injured employee to become re-injured on the job, or even worse, to injure others by failure to perform properly.
When an accident occurs, the risk manager must understand how to respond properly to the accident and how to document it. A key way to manage claims is to reduce them by proper responses to accidents. Mistakes are often made in the investigation that come back to haunt contractors at trial. Throughout the investigation, the risk manager must remember that, very likely, everything done will be a subject of discovery at trial. As a result, notes should go to the point and should not include guesswork or speculation.