Safety and Risk ManagementConstruction by nature is…….….inherently dangerous, with a high degree of hazard and risk.• The toll of construction accidents is high in terms of both costs ($) and human suffering• Accidents add a tremendous burden of needless and avoidable expense• Financial loses pale when compared to bodily injury and death, and the resulting human, social impactsSafety and Risk ManagementConstruction accidents…….….add $10 billion annually to construction cost• Insurance (such as workmen’ compensation) can be purchased to protect the contractor from certain direct expenses • Accidents also involve substantial costs that are not insurable, referred to as hidden or indirect costSafety and Risk ManagementEconomic considerations• Direct costs–Medical– Compensation• Indirect or hidden costs– Time lost from work by the injured party– Loss in earning power– Economic loss to injured worker’s family– Lost time by fellow workersSafety and Risk ManagementEconomic considerations• Indirect or hidden costs -- continued– Loss of efficiency by breaking up crew– Cost to train new or replacement employees– Damage to equipment and tools– Loss of production– Cost incurred by delays– Failure to meet contract demands (completion, etc)– Overhead costs associated with disruption of workSafety and Risk ManagementEconomic considerations• Indirect or hidden costs -- continued– Cleanup and repair costs– Administrative costs of investigations and reports– Increased insurance premiums– Loss of future projects due to adverse publicity – Cost of fines– Many, many others difficult to quantifySafety and Risk ManagementAccidents…….….are defined as events occurring by chance from unknown causes. In reality, construction accidents are:–the result of negligence–needless–avoidableSafety and Risk ManagementAs construction managers…….….we must concern ourselves with the issues of safety for several reasons:1. Legal obligations imposed by OSHA 2. Contract requirements3. Direct and indirect financial impact (profit picture)4. Corporate & personal legal liability (fiduciary duty)5. Ethical duty and moral obligation 6. Public image and reputationSafety and Risk ManagementThe courts charge the employer (management) with the responsibility of :1. Providing a safe place to work2. Providing safe appliances, tools, and equipment3. Developing and enforcing safety rules and regulations4. Providing instructions regarding employment dangers Safety and Risk ManagementBasic elements of a Safety Program as identified by the National Safety Council1. Declaration of management policy and leadership2. Assignment of responsibility, authority, and accountability3. Maintenance of safe working conditions4. Establishment of safety training5. Establishment of an accident reporting and analysis systemSafety and Risk ManagementBasic elements of a Safety Program (continued)6. Creation of medical and first aid programs7. Acceptance of personal accountability by employeesKeys to a successful safety program– Support and enforcement from top management – Front line management (superintendents & foremen) consistently following and enforcing the safety program– All employees recognizing that safety is everyone’s job Safety and Risk ManagementSafety Program Goals…….should be:» Achievable» Demanding» Supported by company resources» Well-defined» Measurable» Monitored Safety and Risk ManagementOccupational Safety and Health Act….OSHA• Established by Congress in 1970 • Part of the Executive Branch -- Department of Labor• Goal of providing a safe and healthful workplace for all Americans• OSHA Standards are part of the Code of Federal Regulations (CFR) published in the Federal Register• OSHA Standards are found in Title 29 of the CFR– General Industry = 1910.xxx– Construction Industry = 1926.xxxSafety and Risk ManagementTitleCode of Federal RegulationsPart SectionHeadings &Paragraphs29 CFR 1926 0.59 (h)(2)(ii)Safety and Risk ManagementOSHA….Key Standards•Sec 5 (a)(1) “Each Employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or likely to cause death or serious physical harm to his employees” -- General Duty Clause•Sec 5 (a)(2) “Each employer shall comply with OSHA standards promulgated under this act”Safety and Risk ManagementOSHA….Key Standards•Sec 5 (b) “Each Employee shall comply with OSHA safety and health standards and all rules, regulations, and orders issued pursuant to this act which are applicable to his (or her) actions and conduct”•1926.16 (a) Rules of Construction – “In no case shall the prime contractor be relieved of overall responsibility for compliance with the requirements of this part of for all work performed under the contract”Safety and Risk ManagementOSHA….Key Standards• “Competent Person” means one who is capable of identifying existing and predictable hazards in the surroundings or working conditions which are unsanitary, hazardous, or dangerous to employees, and who has authorizationto take prompt corrective measures to eliminate them.Safety and Risk ManagementOSHA Inspections• Reasons for inspection– Investigation of imminent dangers – Fatality and Catastrophic Investigation • Fatality(s)• 5 or more employees hospitalized for 24 hours– Complaints and referrals– Programmed Inspections – based on loss data– Target Program InitiativesSafety and Risk ManagementOSHA Inspections• Right to inspect• Credentials• Opening Conference• Employer and Employee “Walkaround” Rights Inspection Process• Employee Interviews• Closing ConferenceSafety and Risk ManagementCitations and Penalties (per violation)• Non Serious – up to $7,000• Serious – between $1,500 to $5,000• Willful Violations – Up to $70,000• Repeat violations – original penalty multiplied from 1 to 10 times• Criminal PenaltiesSafety and Risk ManagementConsiderations When Assessing Penalties • Gravity of violation • Good Faith Compliance Efforts• History of Previous Violations⌦ Penalties can be adjusted down as much as 95%Safety and Risk ManagementPart 1926 -- Safety and Health Regulations for Construction• Subpart A - General• Subpart B - General Interpretations• Subpart C - General Safety and Health Provisions• Subpart D - Occupational Health and