If your company doesn't have a safety culture, start to develop one now, particularly if you anticipate any slowdowns. Not only are workers' compensation claims far more expensive than most remodelers realize, but they often have a greater chance of being filed when workers start to realize that their paychecks aren't what they used to be.

Carpenters and other production employees “are suddenly becoming injured when work slows down and the regular hours they've enjoyed in the past are no longer there,” says Mark Kinsey, an insurance broker with PKG Insurance. “It is the missing overtime they have become accustomed to that will drive employees to figure out that if the work is going to go away, they can get more for workers' comp than for unemployment.”

The danger to business owners runs several ways, Kinsey adds. Injuries could spike your workers' comp premiums for three years, thanks to an increase in your experience modifier. More importantly, “your profits will be nonexistent for any job you sell where a lost-time injury occurs,” he says. Even OSHA's estimate — that employers lose two to four times what the insurer pays for an injury — may be inadequate, he warns. “If the insurance company pays $500 for a splinter in the eye, then the contractor loses $1,000 to $2,000 in lost time, lost production, schedule changes,” and what Kinsey calls the “gawking factor.”

The cost can skyrocket if you figure in factors such as overtime wages to make up for lost time, administrative time working with insurers, equipment damage, inefficiencies, and loss of customer goodwill.

PINPOINTING PROBLEMS Rather than relying on ballpark hunches, Kinsey suggests remodelers use CompEraser ( www.comperaser.com) to limit and quantify the out-of-pocket costs of workers' comp claims. Bill Reynolds, CompEraser president, says the three-year-old Web-based program streamlines claims management, calculates indirect costs of injuries, and can pinpoint where and why injuries are occurring at a company. CompEraser costs pennies per employee per day, he says, and often prompts insurance discounts.

Above all, remodelers should embrace safety in good times and bad. Most companies that have a true culture of safety, Kinsey says, “have survived harder times without sacrificing their employees' safety concerns.