New insurance underwriting criteria could have a big impact on how underwriters qualify their contractor customers. Some contractors could see higher bills for worker’s compensation and general liability; a few could even discover that they no longer qualify for coverage.
The reason is that insurance underwriters are using OSHA’s Data & Statistics page, which lists safety citations and fines against contractors and subtrades, to help set rates and determine eligibility. If you’re a general contractor, these underwriters aren’t just looking at your company: They’re also scrutinizing the trade partners you bring onto your jobsites.
Although I suspected this was happening, that suspicion was recently confirmed by a project manager who attended a recent safety class I taught in Mansfield, Mass. “Our insurance company wants to make sure we hire safe subs and installers,” he told me. “So before bringing on a new sub, I now have to go to the OSHA site to see if they have any outstanding citations.” Expect to see more such requirements in the future.
Finding out if a contractor has been cited is fairly simple:
- Go to OSHA’s Data & Statistics page.
- Click on Establishment Search, the top item in the left-hand column.
- Enter the relevant information for the subcontractor you are vetting.
- If the sub has been cited by OSHA, there will be a link to click on for details.
The more complicated matter is how to weigh a violation, if you find one, into your hiring decision. What if it’s a really good company with competitive rates that does great work, but that had an employee on one of its jobsites fail to work safely on one day? In this case, you can ask for proof that the firm retrained its employees to prevent a re-occurrence.
You need to understand that a company that has been fined by OSHA is on a list for follow-up attention. Even if you are confident that the sub has corrected any safety issues, you need to take steps to protect your company in case OSHA decides to conduct a follow-up inspection while the subcontractor is working on your jobsite.
You also need to be prepared when your insurance provider audits your records and requests proof of safety compliance from your subs. The way to protect yourself against both is to make sure the company can document that it has aggressively implemented a safety program and that its workers will follow your company’s jobsite safety protocols.
Although a sub that has been cited will warrant extra scrutiny, the preceding advice actually applies to all companies you bring onto your jobs. Even if a company has never been cited by OSHA, you need to document its safety training. You also need a written safety agreement.
To document training, start by asking the following questions:
- Does the company have a written safety plan and a safety manual?
- Have its employees completed the required OSHA training and do those employees have certification?
- Does the company conduct frequent and regular safety meetings, and have those meetings been documented?
For example, when hiring a roofer I would want to see a written fall protection plan, certification that all workers have completed a fall protection class, and records of weekly safety meetings. If a sub can’t provide this information, you should think twice about letting it work on your site.
If the company can provide the above and you have decided that you want to work with it, then the next step is for the owner to sign a safety agreement.
It’s important that the agreement be drafted with the help of your attorney and that it include the appropriate safety clauses. General clauses should require the sub to follow your jobsite safety protocol; require acknowledgment that all its employees will follow OSHA safety standards; and pre-determine who will speak to an OSHA inspector and how to behave when a jobsite is under an audit.
The agreement also should include specific requirements, such as the following:
- That anyone working at or above OSHA-mandated heights use the proper fall protection systems and guardrails.
- That the sub provide safety gear for its workers. An example phrase might be, “When your workers show up at the jobsite they have a hard hat, safety glasses, and appropriate footwear.”
- That the sub inform your site manager of any safety hazards it will bring to the site. For instance, if drywall will be delivered at 9 a.m. Thursday, the sub needs to tell your project manager or lead carpenter about the delivery, including where and how the sheets will be hoisted into the house.
- That the sub properly manages any hazards it creates. In the drywall example, this would include setting up a controlled access zone to keep other workers away from the area while materials are being hoisted, and replacing any guardrails across window or door openings that they have removed for the delivery.
Other questions will vary by contractor. A qualified safety consultant can help contractors determine what to include by conducting hazard assessments of the jobsites and of the subtrades. Armed with this information, we can then recommend appropriate solutions specific to each contractor’s needs. Our clients use these recommendations when discussing the subcontractor agreement with their attorney.
Including a safety protocol in your agreements is an important step in setting expectations with subtrades and creating a safety mindset. This mindset will improve productivity and keep liability and legal costs in check. Most importantly, it will help prevent injuries and deaths on your jobsites.