As a safety consultant, the most frequent question I am asked is "How can I significantly lower my workers compensation premium?" After all, every dollar not spent on insurance is 100 percent bottom line, non-taxable profit. In most cases, the contractor expects to take a "safety pill." They don't actually care how much the pill costs just as long as it can be swallowed quickly and its effects are felt immediately. Unfortunately, this cannot be achieved over the long run.

The most efficacious means to reduce your worker's compensation premium is to lower your experience modification rate (or "mod rate"). With a three-year average of WC claims to work with, any change comes slowly. A work place culture that truly rewards safety, at least as much as productivity, can be difficult to achieve in today's economy. But you cannot expect to lower your EMR without some conscious effort on the part of management to authorize competent persons on-site to "observe, act and verify." When you simply hold your middle management personnel to the minimum safety standards, it is hard to significantly reduce accidents, injuries and deaths. Changing the safety culture of an organization, large or small, is the most difficult business proposition in the market today.

But when you ask all of your workers to proceed with safety first, quality second and productivity third, you are well on your way to success.


For the first year of their apprenticeship, surface and underground miners are taught a lot of things, but nothing more important than how to observe. That is a prerequisite to survival in any mine. I often contend that construction workers would not have escalating fatality and injury rates if they were educated in hazard awareness as thoroughly and frequently as miners. Every training course offered at the National Mine Health & Safety Academy, in Beaver, W. Va., has a core curriculum focusing on observation skills. Here are 10 methods used to observe the work site for dangerous hazards on the job:
  • Job Safety Analysis: A pad of paper and a Bic pen are the ultimate safety tools your employees will ever use. By depending on what's above their shoulders and between their ears, the daily JSA is a dependable hazard awareness method. Because it is performed by employees, it is the only safety device that takes their knowledge and experience into account. In truth, everything else falls into the "band-aid" category.
  • Site-Specific Safety & Health Plan: Don't forget that this document should "live, breath and bleed" just like your employees. In other words, it is the worker's safety and health program, not yours. Issue a copy to every employee. Train them in the details of the plan. Have your employees mark up their copy of the SHP once a year according to their on-the-job experience. Revise the plan according to their suggestions. All it can do is save their lives and your future.
  • Accident Reports: We've all seen them-C-2 forms and corporate accident reports. Without review, analysis and corporate safety policy changes, they eventually find their way into the X-files never to be seen again. The accident report is a chance to change direction as necessary. It is assumed that most accident reports are completed by personnel who are sure it is a waste of time and energy. They can be one of the most important documents in your corporate files if they are thorough, precise and graphic in details. Otherwise, they deserve their reputation for killing more trees.
  • Near Miss Reports: Here is your "get-out-of-hospital-for-free" card. How many people in the room don't want the permanent loss of sight, terminal liver cancer or amputation of your right hand? Don't ignore the potential to eliminate an employee accident before it even has a chance to happen. NM reports are often considered the best method of accident prevention because they train personnel to observe "potential, probable and possible" pre-accident scenarios. Awarding crew gift certificates for the most NM reports is a form of positive safety reinforcement, without the backlash problems created by most safety incentive programs (covering-up the accident).
  • OSHA 200 Logs: OSHA's revised recordkeeping standard stipulates that the employer now post the OSHA 200 log prominently in a place of work (construction site) for three months to enable his employees to understand the nature of the OSHA-recordable accidents the company has had in the last 12 months. If five out of 10 of the company accidents were caused by falls, then the fall protection section of the corporate safety plan is either not applicable to their work or else unimplemented by your foremen and supervisors.
  • Site Safety Audits: Safety officers and committees often conduct regular site inspections using standard checklists. The signed/dated form also becomes a future training plan for "toolbox safety meetings," as well as written confirmation of competency. OSHA standards require the employer to keep employee hazard exposure records for the length of employment plus 30 years. The safety audit can form the skeleton of this record-keeping requirement. The video age has also improved the photo-documentation process 100 percent. Those who complain about being videotaped usually have something to hide.
  • Employee Input: No one knows what is actually going on every day better than your employees. When was the last time you asked them? Listened to them? If you're going to pay top dollars for their labor, why would you ignore their daily observations on every one of your sites? Bring your crews in for a company lunch on the last Friday of each month. After the barbecue, encourage any and all employees to stand up and tell you about their projects, problems and solutions. You can't get more dependable information about your firm's future from anyone else. Try it. After awhile, you'll even grow to like it.
  • Experience Modification Rate: Just one small figure in the complicated, elongated worker's compensation computation formula, this rate will tell your worker's where your company is positioned relative to all other companies in the nation that perform the same work (SIC code number). An EMR of 1.0 means your employees are just as likely to have an accident working with your firm as any other in your particular trade. An EMR of 0.75 means he is 25 percent less likely to have an accident working for your firm. An EMR of 1.25 means you're 25 percent more likely to have an accident on your payroll. Many host employers are requiring submission of each contractor's corporate EMR in their bid package. Many construction bids are being initially rejected by the GC if the corporation's EMR is greater than 1.0. Lower your EMR to half a point and you're in the potential market for becoming self-insured as profits grow geometrically. Lower it even more, and you may be allowed onto the "preferred bidder's list" where you can win the bid when you're quote is as much as 20 percent above the low bidder, who is not on the PBL.
  • Contract Documents: Just going from a single-employer to a multi-employer site status increases your chances of having an accident by a conservative factor of 140 percent. The plans, specification and schedules are keys to your worker's safety, particularly on a multi-employer work site. Always remember that construction safety is a three-dimensional problem. Time spent on carefully reviewing the contract documents will highlight those problem locations, high-risk time periods and hazardous operations created by your own work, as well as the work of other contractors surrounding you. The CDs enable you to sort out temporal/

    spatial contract relationships. That's big.
  • Independent Safety Consultant: Contracting with a safety professional to assess your work sites, interview your employees, inspect your tools and equipment, task-specifically train your workers, review your records and compose a practical corporate safety and health program is a proactive method of reducing losses and increasing profits. Ask your auditor to prioritize your hazards by color codes:
    • Red (immediately dangerous to life/health)-mitigate immediately
    • Yellow (serious)-abate as soon as possible
    • Green (potential)-monitor conditions closely for change


Even if you discover a hazardous condition by means of a safety audit, if nothing is done to abate the hazard, then the potential for injury, illness and death remain viable. When an accident investigator carefully assembles, reconstructs and analyzes pre-event evidence, he or she is looking to find both the direct and root causes which triggered the accident. Having these observations classified and sequenced, the investigator next makes arrangements of hazard controls designed to prevent that accident from happening once more in the same time, place and conditions. There are just three primary hazard controls to enact in a typical JSA but they should have a prioritized sequence in the mind of the competent person.

Tier 1-Engineering Controls:

Engineering controls eliminate the hazard completely. It can be as simple as implementing a lockout/tag-out policy on the job or installing 200-pound resistant guardrails on open edges. Or this may be as complicated as a series of ventilation and atmospheric testing procedures to remove one part per million of hydrogen cyanide from a permit-required confined space before workers enter. Engineering controls can be time consuming, labor intensive and involve expensive equipment. But engineering controls entirely remove the hazard, and worker productivity recovers quickly and, in time, inevitably rises.

Tier 2-Administrative Controls:

Administrative controls may not remove the hazard, but may actually remove the worker from the danger zone. Often hazards are temporary.

Rescheduling work in the hazard hot zone for another shift or day may mean your employees safely avoid a hazard entirely, just as if it had been removed by engineering controls. Setting up barrier tape around the controlled access zone and posting caution, warning and danger signs are also a form of administrative hazard control. Training your employees to recognize hazards and the proper procedures to protect themselves is still another administrative hazard control. Like a hazard communication program ("right-to-know"), supplying your employees with a site-specific, task-specific, worker-specific safety and health plan for a project is another type of effective administrative hazard control. As a category, administrative controls tend to depend on the knowledge, training and experience of your workers to implement them.

Tier 3-Personal Protective Equipment Controls:

Finally we arrive at PPE controls. This is the last level of protection. PPE does not remove the hazard. It merely protects you from the effects. You wouldn't consider staying warm next winter by isolating yourself underneath an electric blanket for three months. You want to battle the elements as far away from your skin as possible, so you thoroughly insulate your home's outside walls and heat the whole interior. Besides, wearing an electric blanket is cumbersome, impractical and under some circumstances, may be dangerous.

If you read the manufacturer's literature accompanying the PPE, you soon realize that all personal protective equipment is designed to fail (not succeed). It is your employer's duty to inform you of your PPE's failure point on every job. Installing guardrails (engineering control) everywhere on the site where falls more than six feet may occur may not be entirely practical or feasible. Issuing, fit testing and training workers to install and wear personal fall arrest systems is intended to allow a fall to occur, but protect you from the terminal effects of an uncontrolled fall. But fall arrest is typically designed for workers weighing less than 310 pounds and freefalling no more than 6 feet if it is to work properly. PPE may not be properly selected, sized or inspected by the competent person, leading to potential injuries.

If the worker chooses to ignore the manufacturer's instructions, PPE may also fail to protect him adequately. As a man-made device, PPE is easily lost, damaged or made ineffective by any number of site conditions. Under some circumstances, PPE may create a hazard greater than the one it is designed to protect you from.

It is also possible that the PPE makes your work tasks infeasible or your work eventually inhibits the proper action of your PPE. Most important of all, PPE does not remove the hazard.

The hazard abatement factor between these three hazard controls typically accounts for 95 percent of the actual hazards identified in your JSA. The remaining 5 percent is often called the "snake in the grass." Informing the workers of the presence of a poisonous snake somewhere on site is similar to informing them of those few hazards that could not be effectively controlled at this time. Construction sites are often like that.

Construction sites are also in a constant state of change. Tomorrow's JSA may afford you the possibility of removing or controlling 100 percent of the hazards or, in some cases, only 50 percent. Giving your workers a heads-up on those uncontrolled hazards is considered a good-faith effort and sometimes the best you can do, until conditions change. Failing to communicate identified and uncontrolled hazards to your employees is considered malfeasant under most circumstances. OSHA may evaluate the employer's responsibility paramount and issue a willful-category citation with a penalty as much as 10 times the original fine, up to $70,000 maximum per incident.


A typical job safety analysis consists of three vertical columns:
  • Steps of the job
  • Hazards identified per step
  • Control methods per hazard
  • Projected cost of column 3
  • Date and signature of verification

We all know that if you forget a line item in any bid and you win the award, the only money available in the contract for that forgotten item comes from profit. Taking away profit for many contractors is a violation of the commander's prime directive: Profit is mine, salary is yours.

As a result, the middle manager (foreman, supervisor) is typically ordered to make miracles happen by increasing productivity at any costs. Labor shortcuts and material shortages are the trademark of a project in bottom-line trouble. When and if they are properly investigated, most employee accidents have their root cause in a short-legged estimate.

Risk-taking is often condoned and occasionally rewarded when liquidated damages are threatened by the owner. Many times a unit-based work bonus is offered to overtime workers on a job behind schedule just before the date of a serious accident. The first 5 and last 30 percent of the project schedule are most prone to job site accidents for a good reason. Command and control is often not established during the first few weeks of the job. While at the end of the job, the balance of the budget may be clearly visible but substantial completion is nowhere in sight. The term "risk/benefit analysis" is often mentioned at about this time.

Your competent person has completed a job safety analysis and determined that 95 percent of the hazards may be successfully abated. It is then incumbent on that employer-designated employee to frequently review the project to assess the degree to which the acts and conditions on the job are free from existing and potential hazards. While a quantitative value of 95 percent may seem like a precise assessment, the site evaluation becomes more about qualitative evaluations. This verification process needs to be thoroughly documented in writing in order to be meaningful and accountable. Job hazards immediately dangerous to life and health may take a long time to become established or else reach critical potential within minutes.

There is no pre-established schedule for hazard abatement verification. In many ways, I've found it to be more of an art than a science. Usually whenever the hairs on the back of my neck stand up and I head out to the site to take a walkabout. And there it usually is, right in front of me. Had I arrived an hour earlier or later, I would not have witnessed that hazardous act or condition.

But just what is it I am supposed to verify? Everyone knows there are a number of minutia on the job site that may or may not develop easily and quickly into a trouble spot. I am looking for a particular set of circumstances that need verification during particular landmarks in the critical path method schedule. The following questions usually help me to identify hazard control verification points:
  • Verify what? Are the hazard controls that were selected actually the proper type for the hazard identified? Chemical resistant clothing is never universal. Particular combinations of materials will resist certain hazardous chemicals in the work environment. But at what concentration before degradation occurs? For how many hours (or minutes) of exposure before the materials fail and permit permeation? Was the exact nature of the hazard actually understood initially by the competent person performing the JSA? A safety committee with two or more members will have a broader interpretation of work events, tools and materials during their site inspections than a single person.
  • Verify where? Is the position of the hazard control optimum for eliminating the hazard entirely? Personal fall arrest systems in the wrong position by as much as 1 foot can seriously injure or kill a worker who is allowed to strike an obstruction in the arc of his arrested fall. A physical barricade to prevent exposure to live electricity is not considered protective until the safe distance is calculated for the potential voltage. All accident investigations involve the analysis of spatial relationships between objects and personnel. Obviously wherever possible, the safe controlled access zone in a hazardous operation should exceed the potential effects of the hazard by a factor of at least two times.
  • Verify when? As with most things in this life, timing is everything. Implementing the correct safe work practice either too early or too late can have devastating effects. Leaving up a physical barrier around a site that is no longer hazardous may create a dangerous traffic condition more serious than the original. The worker is often caught off guard as he is entirely trusting that conditions are not made worse by the length of time the controls are in place. Simultaneous with spatial analysis, accident investigations conduct temporal studies to determine when hazards are exposed and their controls are effective. Obviously, whenever possible control times should precede and postdate the hazard event by a safety factor of at least two times.
  • Verify how? Foreknowledge of the policy, function and procedure of a hazard control for an act or condition is integral to knowing whether it is having any mitigating effect. Understanding the construction phase involved, as well as the methods, tools and equipment, typically used for the procedure will benefit in knowing when and where the work may become hazardous. Implementing controls unnecessarily may pose unique problems for the worker and even caused a hazard greater than the one he is initially attempting to control.
  • Verify how much? Most safety professionals realize that one size does not fit all and more does not necessarily ensure safer. Residential roofers were once regulated by an OSHA residential fall protection standard. It lasted only a few months before Congress rescinded the law, as it caused much more fall-in-place accidents than it prevented falls more than 6 feet. A half-dozen 5/8-inch diameter lifelines dangling from ridge anchors became slip/trip hazards on the inclined roof deck and the dramatic rise in insurance claims caused the law to be removed from the books entirely. The competent person should also know when there is an insufficient number of controls for the extent of the hazard or that the control is not built with enough redundancy or impact strength to resist the potential forces involved.


After "observe, act and verify" have all been implemented, the competent person is responsible to record and report his/her findings. The job safety analysis is also a dependable skeleton on which to design your site-specific safety and health plan. A copy of your JSA is typically delivered up the contract-stream to the general contractor who develops a site safety analysis from his subcontractor's JSA. The GCs will, in turn, forward their SSAs up to their host (controlling) employers, their project managers or engineering firm for final review and development into the project safety analysis.

In this way, the entire site for the duration of work will be analyzed for all existing and potential hazards, regardless of who is creating, controlling or exposed to the dangerous acts or conditions. If your workers are additionally trained to observe, act and notify the competent person of any developing hazards on site, your worker's compensation insurance premiums will undoubtedly decrease steadily over the years.

If you read this article, please circle number 341.