8 Steps to Vet Construction Subcontractors

subcontractorAs a general contractor, it’s likely that you’ll use subcontractors at some point. Subcontractors can be an efficient way to outsource work. As specialists, they’ll often do a better job than a generalist and their smaller size means they can work quicker and leaner.

However, the construction job is your responsibility. The performance of the subcontractor will reflect on you. To complete the job properly and satisfy your customer, you need to make sure your subcontractors will produce quality work in a timely manner.

Before you officially hire any subcontractors, protect your business and your customer by taking these steps to vet the subcontractor.

1. Examine their past and current performance

Request information from the potential customer about their licenses, accreditations, history, and references. Look for any public data on lawsuits, disputes, complaints, or bankruptcies. Ask for the contact information of previous contractors they worked for. Then, search for references independently (without the subcontractor’s involvement) to get some unbiased and unfiltered information.

2. Look at their queue of work

It’s smart to make sure potential subcontractors can actually complete the work you need, so you’ll want to examine their log of previous, current, and future work. If the subcontractor seems too busy for their size, your job might overextend them.

3. Ask about their safety practices

Unsafe operations can leave you exposed to liability and force an inspector to close the job site, so make sure any subcontractors have clean or reasonable safety histories. They should also have ample safety protocols in place and a crew who is coached to prioritize safety.

4. Investigate the subcontractor’s employees

Ask the subcontractor about their team. Are they temporary workers, or do they work full time? Have they worked in construction before, or are they new? Does the subcontractor have the proper number of licensed professionals for the site? Do the workers have the right tools and reasonable workloads? Do any have serious felonies or drug problems that might make them unreliable? Answers to these questions will determine whether the subcontractor is right for your job.

5. Validate bonding and insurance

In most states, contractors are required to have bonding. In all states, they must be insured, including worker’s compensation insurance. If the subcontractor doesn’t have these protections in place, you could be held liable if there’s a problem. If the subcontractor doesn’t have these, reject them as candidates.

6. Investigate the subcontractor’s financial health

If your job is large, you’ll want to make sure the subcontractor’s financials are healthy enough to commit. You don’t want their employees to walk off the site one day due to lack of payment, or an inability to purchase materials. Request their annual contractor volume, two years of financial statements, and their total sales and net worth (you might have to sign a confidentiality agreement). Look for signs of poor health, like poor cash flow, a mountain of debt, or declining income.

7. Ask about their quality control process

In order to avoid rework and warranty work, you want your subcontractors to certify the quality of their materials and finished work. Every professional business should have a procedure in place to guarantee quality assurance. This procedure is rarely complex, but a successful business will have an answer to your questions.

8. Demand a written contract

It is shocking how many people work without a written agreement. As a contractor who is purchasing labor, you need to protect your investment. Every deal should be bound by a contract that clearly describes your expectations, including the scope of work, timeframe, and payment arrangements. Describe what you will provide and what the subcontractor will provide in terms of materials, warranties, and cleanup.

Hiring a subcontractor is like hiring an employee: You want someone who will represent your business well without adding drama, stress, or financial burden. If you follow the steps listed above, you’ll find the right candidate and build a lasting relationship.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

Jon Belek

Trucking Risk Insights: Top 10 Vehicle Violations – 2016

Top 10 Vehicle Violations—2016

A roadside inspection is an examination of individual commercial motor vehicles and drivers by a Motor Carrier Safety Assistance Program (MCSAP) inspector to determine compliance with the Federal Motor Carrier Safety Regulations (FMCSRs) and/or Hazardous Materials Regulations (HMRs). Serious violations result in the issuance of driver or vehicle out of service (OOS) orders. These violations must be corrected before the affected driver or vehicle can return to service.

Trucking ViolationsJonathan Belek
Risk Management Consultant
jbelek@srfm.com

Jon Belek

Trucking P&C Pro-File Newsletter – February 2017

New Study Links Multiple Health Conditions to Preventable Crashes

It can be extremely difficult for commercial truck drivers to stay healthy on the job. Drivers often work long hours without rest, stay seated all day and don’t have access to exercise or nutritious meals. However, a new study conducted by the University of Utah School of Medicine found that drivers with three or more health conditions are much more likely to get into preventable crashes.

The study, which examined the medical records of nearly 50,000 commercial drivers, tracked a number of medical conditions that could have a negative impact on a driver’s performance—such as diabetes, high blood pressure, and anxiety.

Although the study found that drivers who have only one of the conditions

could often control it while on the road, the number of crashes increased significantly when drivers had three or more conditions. The average rate for crashes that result in an injury for all truck drivers is approximately 29 for every 100 million miles traveled, but the rate is 93 for every 100 million miles traveled for drivers who have at least three of the flagged conditions.

Transportation Industry Seeks to Limit New Rule-making

Representatives from the transportation industry have petitioned the Trump administration to slow the rule-making procedures of various federal agencies by adding more steps to the process and including business representatives in future rule-making discussions.

Although agencies such as the Department of Transportation (DOT) and the Federal Motor Carrier Safety Administration (FMCSA) currently go through public steps in their rule-making processes, some business owners believe that the Obama administration bypassed these processes through executive orders and safety advisories. They say this could force businesses to adopt costly new procedures with little evidence of their effectiveness.

New Interstate Passenger Resource

The FMCSA recently released an online

resource to help businesses that transport passengers across state lines. The resource includes a list of requirements that have changed over the years as a result of litigation, legislation, and rule-making. Additionally, passenger carriers can determine their registration requirements, minimum levels of financial responsibility and any applicable safety and commercial regulations.

For more information on keeping your business compliant with FMCSA regulations, contact us at 203-265-0996 today.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

Jon Belek

Construction P&C Pro-File Newsletter – February 2017

New OSHA Beryllium Standards

On Jan. 9, 2017, the Occupational Safety and Health Administration (OSHA) issued a final rule to amend its beryllium standards for the construction, shipyard and general industries.

The final rule will reduce the eight-hour, permissible beryllium exposure limit from 2.0 micrograms per cubic meter to 0.2 micrograms per cubic meter. It also establishes a short-term exposure limit of 2.0 micrograms per cubic meter over a 15-minute sampling period.

The rule will require additional protections that include personal protective equipment, medical exams, medical surveillance, and training.

The final rule becomes effective on March 21, 2017. Affected employers must provide newly required showers and changing rooms within two years after the effective date and implement new engineering controls within three years after the effective date.

OSHA estimates that the new rule will prevent 46 new cases of beryllium-related disease and save the lives of 94 workers annually.

Employers should become familiar with the new standards and evaluate their current workplace practices to ensure compliance with the final rule.

DOL Sues Contractor for Firing Safety Manager

According to a lawsuit filed on Dec. 28, 2016, a Tampa roofing contractor discriminated against its safety manager after he cooperated with an OSHA investigation. The Department of Labor (DOL) lawsuit was a result of an investigation by OSHA’s Whistleblower Protection Program.

Under the program, employers are prohibited from retaliating against employees who raise protected concerns or provide protected information to the employer or government. The lawsuit seeks back wages, interest, and injunctive relief as well as compensatory and punitive damages.

Construction Workers at Highest Risk for WMSDs

According to a recent Occupational and Environmental Medicine report, U.S. construction workers are at a higher risk of work-related musculoskeletal disorders (WMSDs) than all other industries combined. The back is the primary body part affected, with overexertion named as the major cause of WMSDs.

Employers should adopt ergonomic solutions at construction sites, such as training employees on safe lifting practices, in order to reduce the number of WMSDs and prevent lost wages.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

Jon Belek

Reducing Your Risk and Exposure to Worker Compensation for the Sand and Gravel Industry

gravel pitWhen it comes to heavy industrial work and extraction services, the safety of your workers is paramount. It’s vital that you take every step possible to reduce the risk of injury or issues in the workplace, and limit your exposure to possible worker compensation claims for employees extracting sand, gravel, and similar materials.

We’ll start by looking at the data before sharing some common sense best practices for making all of your work sites and people safe.

Information on the sand and gravel industry

  • There are currently between 6,000 and 6,500 sand and gravel operations throughout the US, according to 2013 figures.
  • Most operations have fewer than 25 employees and only 7 or 8 counties through the US have operations with more than 200 employees.
  • There are very few fatalities across the sand and gravel extraction industry as a whole, with a total of 43 reported between 2003 and 2013 (just over 4 a year on average).
  • There are a fair number of nonfatal injuries — Between 2009 and 2013, there were an average of 370 injuries a year, affecting an average of around 1.6% of employees.
  • The most common types of injury for sand and gravel workers, in order, are:

o Handling materials — 35%
o Slip or fall — 29%
o Use of hand tools — 12%
o Powered haulage — 9%
o Machinery — 7%
o Other — 8%

If you want to reduce the risk of injury, and by extension your exposure to worker compensation, you need to make sure you have best-in-class training, safety equipment, working environments, and policies to reduce and prevent injuries.

Creating a safe work environment for sand and gravel employees
We recommend the following when you’re creating and reviewing your safety procedures.

Get a complete, independent audit of your existing safety practices
Have an independent organization come in to examine and report on how you currently operate, with a strong focus on safety. They will produce a detailed report highlighting any gaps in any aspects of your safety processes and policies.

Get very clear safety policies and processes in place and rigorously enforce them
Good health and safety starts with strong policies. Review all of your existing health and safety practices and ensure they’re reflected in the policies you share with employees. Provide plenty of practical examples and context for your policies so your employees can understand how they work in practice. In particular, you need to ensure every employee is responsible for their own health and safety.

Provide the right training on best practices and ways of working
Make sure you have an in depth onboarding and ongoing training program on health and safety for all employees. Ensure the training covers every aspect of your health and safety policies, using equipment safely, operational expectations and an awareness of the health of yourself and others.

Invest in equipment and tools that minimize the risk of injuries

  • Provide protective clothing to your workers
  • Ensure they use equipment and tools designed to minimize the risk of injury. This could include highly visible haulage machinery, hand tools designed with protectors, footwear that allows sure footing, gloves to make material handling safer, and a variety of other areas.
  • Inspect equipment and tools regularly for deterioration and replace anything that isn’t up to standards.

Make it everyone’s responsibility to report potential issues
You want your workers to be aware of their environment and any potential hazards that could affect them and their colleagues. Make it easy to report potential threats and ensure everyone knows it’s their responsibility to do so.

React to potential hazards quickly and ensure they’re fixed
Give a member of your staff accountability and responsibility for monitoring and fixing reported hazards. Measure how long it takes them to do so and use this to design better systems for identifying and fixing problems.

Make sure the environment remains as safe as possible

  • Clearly mark potentially unsafe areas (e.g. loose ground.)
  • Put proper fencing and barriers in place to keep people away from danger.
  • Make sure you control for dust pollution and storing of materials.
  • In times of severe weather, make sure you have proper processes in place to minimize risk (e.g. when people are working in slippery and wet environments.)
  • Keep landslides of sand and gravel to a minimum by regulating the size and location of materials storage.
  • Have rigorous safety controls around all blasting and explosives handling and use.

Taken together, all of these suggestions can make your site a much safer place to work, maintains the health and safety of your people, and makes sure you don’t fall afoul of worker compensation.

Joe Pinto
Risk Management Consultant
jpinto@srfm.com

Joe Pinto Head Shot

 

Understanding the changes in rules for Crane Operators

Construction worker talking to crane operatorBack in the year 2010 the Occupational Safety and Health Administration (OSHA) implemented a rule outlining new regulations for the certification of crane operators. The new regulations stemmed from a high rate of accidents and fatalities related to crane operation in the construction industry. Since the new OSHA standards were released much has transpired regarding some specifics of the rule and the impact on both employers and employees in the construction business. This article will explain the rule, the changes, and the implications for employers.

2010 OSHA Crane Operator Certification Standard: The Basics

OSHA released a final rule in 2010 regarding operator qualification and certification for Cranes and Derricks in construction.

The OSHA rule is quite lengthy but essentially these were the three main points for debate:

  1. It requires employers to ensure that crane operators are certified  by an approved entity before operating a crane
  2. It states that once an operator passes a certification course, they are “deemed qualified” to operate a crane thus replacing the employers duty to ensure that crane operators are competent and well trained
  3. It states that operator certifications are to be based on crane load capacity (multiple certifications would be required for each type of crane; 50 ton, 100 ton, 200 ton, etc.)

Initially, the rule passed down by OSHA would require all operators to be certified by November 2014.

The rule stems from a litany of accidents and fatalities in the industry surrounding the operation of cranes. Cranes pose a significant danger to employees and OSHA has estimated that 89 workers per year are killed in crane-related accidents.

Specifically, crane-related injuries and fatalities have been caused by:

  • Electrocution
  • Being crushed by the equipment
  • Being struck by the equipment or a load
  • Falls

 Rule Appeal and Certification Extension

Industry professionals universally recognize the need for improved training and certification processes regarding crane operation, but after the final rule from OSHA was released it was received with much criticism.

A coalition of experts and industry stakeholders called out OSHA on two main points:

  1. Although necessary, third party certifications alone were insufficient in guaranteeing operator safety and should not replace the employers’ duty to ensure that operators are trained and competent.
  2. Requiring multiple certifications based on the load rating of the crane did not provide any significant safety benefit and would cause an undue financial burden on both employers and employees.

In response to these concerns, OSHA has made changes to the rule. Specifically, they have done two things:

Issued an extension of compliance: The new deadline for employers to ensure that all crane operators are certified has been extended to November 10, 2017.

Revised the crane operator certification standards: OSHA has removed the mandate requiring multiple certifications based on load capacity, and they have reworded the text surrounding “deemed qualified” to put qualification responsibilities back on the employer.

OSHA didn’t quite get it right the first time, but they listened to the feedback from experts in the industry and made changes to make the rule better. Safety in the construction industry is paramount. This new rule regarding crane operation will save lives, cut down on injuries, and keep employees safer. For employers it will keep qualified operators on the job longer, reduce the amount of workers’ comp. claims, and lower operating costs. It’s a win all around.

At Sinclair, we are committed to helping you keep your team safe, reduce risks, and save money. Our construction specialists work with clients of all shapes and sizes and fully understand the diversity of the industry. Get in touch with us today to see what we can do for your operation.

Joe Pinto
Risk Management Consultant
jpinto@srfm.com

Joe Pinto Head Shot

The Key to Controlling your Workers’ Compensation Costs

The key to controlling your workers’ compensation costsThe key to controlling your workers’ compensation costs is understanding your experience modification factor and its effect on your insurance premium. Workers’ compensation costs can make or break your bottom line. But control over these costs is more attainable than you may think if you understand your experience modification factor and its effect on your insurance premium.

Use Your Mod Factor

The key to controlling your workers’ compensation costs is understanding your experience modification factor, or mod factor. Your mod factor is an adjustment to your workers’ compensation premium. It’s based on your company’s actual losses compared to its expected losses based on the industry you’re in.

The mod factor represents either a credit or a debit that is applied to your workers’ compensation premium. A mod factor greater than 1.0 is a debit mod, which means that your losses are worse than expected and a surcharge will be added to your premium. A mod factor less than 1.0 is a credit mod, which means losses are better than expected, resulting in a discounted premium.

If your mod factor is over 1.0, show management how controlling costs can save you money on your insurance premium when it falls below the 1.0 threshold.

Control Your Mod Factor

You may not know it, but you do have control over your mod factor—and control over your workers’ compensation premium.

Your mod is calculated based on data reported to the rating bureau by past insurers. Incorrect or incomplete data can cause inaccurate mod factors. Review your loss and payroll data to ensure that your calculation is complete and accurate.

You can also control your mod factor by encouraging everyone to focus on safety—especially management and anyone else who is involved in controlling costs. Everyone working safely means fewer accidents to report to your insurance carrier and a lower mod factor.

Control Costs with a Return to Work Program

Another way to control your costs is to establish a return to work program and give modified or light duties to injured workers who can return to work.

Finding modified or light-duty tasks may seem inconvenient, but this is an important way to reduce your workers’ compensation costs—you pay for fewer days away from work and you keep regular contact with employees, so you can see how their recovery is progressing. The most successful return to work programs can accommodate almost any restrictions. 

Workplace Policies Help Control Costs, Too

Your workplace policies should encourage safe working habits and prompt reporting of injuries and accidents. Many companies have accident reporting policies in place but do not bother to implement them, which is dangerous because employees’ injuries could go untreated and hazardous situations will not be improved.

When you receive a claim for an on-the-job accident or injury, report it to your workers’ compensation provider as soon as possible.

After an accident or injury, investigate the event right away. Prompt investigation helps you preserve evidence and can deter employees from making fraudulent claims in the future.

If workers’ compensation costs are hurting you financially or if you want to learn more about how your mod impacts your premiums, Sinclair Risk & Financial Management is your resource for policies and guides to keep your costs in check. We’re here to help you protect your company and your bottom line.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

The key to controlling your workers’ compensation costs

Spring Hazards: Worker Safety During Warmer Weather

Spring Hazards: Worker Safety During Warmer Weather Spring signifies the end of winter and a season of new beginnings.  It ushers in budding trees, blooming flowers and warmer temperatures.  It can also bring with it quickly changing conditions and hazards that employers and workers need to be aware of and prepare for to ensure safety.

 While, overall, workplaces are safer today, many people are still seriously injured on the job, especially in industries like manufacturing, construction, transportation, warehousing and oil and gas extraction.  While accidents happen, many are preventable. In fact, the Occupational Safety and Health Administration (OSHA) found that more than 10,000 severe injuries were caused by workplace conditions in 2015.

 What top three hazards do employers need to be aware of during spring? 

  1. Severe Weather and Flooding- Floods and tornadoes are the most common hazards in the United States during spring.  From melting snow to sudden spring showers, flooding can happen quickly and with little warning.  Not only should workers and employers be aware of weather forecasts, but workers should be trained on severe weather plans and have emergency supplies with them to be prepared if severe weather strikes.  OSHA and the National Oceanic and Atmospheric Administration (NOAA) have partnered to provide a comprehensive resource aimed at helping businesses and workers prepare for severe weather, like flooding
  2. Outdoor Work – From construction workers on scaffolding to flagmen helping to direct traffic at highway work zones, outdoor working conditions in the warm spring weather can naturally cause hazards for workers. In fact, more than 100 workers are killed and more than 20,000 are injured in the highway and street construction industry each year, with over half of the fatalities resulting from vehicles and equipment operating around the work zone. It’s imperative that employers put controls in place and train employees to protect workers from injury in outdoor settings.  The National Institute for Occupational Safety and Health provides guides for many industries.
  3. Driving and Pedestrian Safety – As the warm weather approaches, more people get out to enjoy the warm weather – from people walking dogs to motorcyclists enjoying a ride to children riding bicycles.  Naturally, this means that there are more incidents of accidents involving driving and pedestriansIt’s important that drivers properly maintain their vehicles, exercise caution, travel at a reasonable speed, pay attention and avoid distractions like texting.    

Employers are required by law to provide their workers with a workplace free from serious recognized hazards and to comply with standards, rules and regulations issued under the OSH Act.  In addition to ensuring safety protocols, plans and training take place to prevent workplace accidents and injuries, each industry has its own nuances and risks.  At Sinclair Risk & Financial Management, we take the time to understand your company and individual situation and work with you to help you minimize your company’s risks. 

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

Spring Hazards: Worker Safety During Warmer Weather

Are you prepared for an OSHA ‘pop-in’?

Dave Sinclair*ring ring ring*

You’re not expecting anyone, but someone’s at the door…it’s your Aunt Elaine, famously resistant to getting a cell phone, who was in the neighborhood and thought she’d take a chance you might be home and drop by.

Aunt Elaine may be great, but let’s face it, nobody loves a pop-in. While we tolerate the occasional boundary-crossing friend or relative with good humor, pop-ins from government officials on official business can be truly unpleasant.

Think IRS field audit, or unexpected OSHA inspection.

Many business owners, especially in the manufacturing or construction industries, dread a visit from OSHA. But if you follow the Boy Scout model and be prepared, an OSHA pop-in should produce less anxiety than one from Aunt Elaine.

A division of the Department of Labor, the Occupational Safety & Health Administration (OSHA) was born in 1970 via federal legislation that guarantees the right to have a safe workplace. This is not a bad thing. The law requires employers to provide a workplace free of known dangers.  

With millions of workplaces in the United States and just a comparative handful of OSHA compliance officials doing about 100,000 inspections annually, the chances of a random visit are pretty unlikely, but most come about because of whistleblower workers, who can confidentially file complaints.

How do you avoid that? Simple. Keep it Safe.

Easy, right?

Not exactly.

Operator error, failing parts, accidents — a number of factors can contribute to a situation that eventually prompts an OSHA visit. Having a plan in place will make the process significantly less difficult.

1. Identify the primary point of contact for OSHA: you as the business owner, shop foreman, COO, whatever makes sense for you situation. Have a backup person identified OSHAin case you or your primary point of contact is not on site the day of the visit.

2. Be sure the visitor is indeed from OSHA and not an impostor.

3. Have your safety documentation and records in order and easily accessible. If you appear disorganized or flustered, it will raise suspicions.

4. Smile and be polite. A good attitude is likely to be returned.

This excellent article goes into more detail about what to expect during an OSHA visit.

Keep in mind that your responsibility goes beyond keeping the workplace safe. OSHA also requires employers to:

• Inform employees about hazards.
• Keep accurate records of work-related injuries and illnesses.
• Perform tests such as air sampling required by some OSHA standards.
• Provide medical tests required by OSHA standards.
• Prominently post OSHA citations, injury and illness data, and an OSHA poster.
• Notify OSHA of all work-related fatalities within 8 hours, serious injuries within 24 hours.
• Not discriminate or retaliate against a worker for using their rights under the law.

Find out more about that in my blog here.

Unsure about your OSHA preparation level? My team at Sinclair lives and breathes risk management and can help you handle a pop-in, maybe not from Aunt Elaine, but definitely from OSHA.

Dave Sinclair

CEO Sinclair Risk & Financial Management

dave@srfm.com

Employers: Safety is your responsibility (but we can help!)

Dave SinclairA billion dollars…right out the window.

That’s what American businesses spend each week on worker’s compensation claims.

If that isn’t enough to give you pause, that figure represents only the direct costs of medical and legal payments. Indirect costs of training replacement employees, conducting accident investigations, hiring crisis management PR experts, repairing equipment, lost productivity, and low staff morale easily double the pain.

Want a real-world estimate of a threat facing your workplace? This cost estimator provided by OSHA will put the fear of the safety gods into you.

But it doesn’t have to be this way.

Avoiding crippling worker’s compensation claims begins with developing a workplace safety program, reinforced by ongoing training and hands-on management.

Getting started — Developing a comprehensive safety program can seem daunting, but work accidentSinclair Risk & Financial Management can help. We want to reduce your worker’s compensation costs not by just getting you the most affordable premiums, but by making sure accidents are rare or nonexistent in your shop.

Training — Too often we see operator error leading to significant injuries. The machines are working just fine, but employees were not properly educated on how to use them safely. We provide a comprehensive analysis of your operations and identify areas where training needs to occur or be reinforced. 

Make it worthwhile — Safety is your responsibility, but you need buy-in from all staffers. Consider a program that rewards everyone in the workplace for keeping it safe. Six months accident free? Everyone gets an extra day off, or a gift card, or a lunch…there are numerous low-cost incentives that will keep your staff focused on the goal.

Identify trouble areas (and trouble employees) — It’s bad enough if an employee sustains an injury once…but twice? Same goes for a piece of equipment. Anytime there’s a repeat claim associated with an employee or particular piece of equipment, you need to laser in, figure out the reason, and correct the problem. As part of our ongoing commitment to safety in your workplace, we can help with these sensitive audits.

Safety is your responsibility, and operating a safe shop is the only smart way to do business. The Sinclair Risk team includes experts at helping business owners implement a safe workplace and keeping it safe through training and follow-up. Take the scare out of safety and talk to us today.

Dave Sinclair

CEO Sinclair Risk & Financial Management
dave@srfm.com