The Cost Impact of Incidents & Theft in Construction Industry

The construction industry contributes significantly to national economic growth and provides numerous opportunities for job creation; however, workplace accidents and theft have long plagued the industry. 

The economic significance of workplace injury by construction activities and theft can have a detrimental impact on growth in the industry. These incidents represent a significant economic and social burden on both employers and employees. 

Wherever construction work happening, there will always be related problems of theft and vandalism, which will depend on the nature of construction work and vary from major projects like highways and airports to in-fill housing developments.

Although it is not possible to insure against all the costs arising from these incidents, it is possible to prevent accidents from occurring. Consequently, the costs of accidents can be avoided, time and money can be saved and harm to employees prevented.

Incidents in Construction Industry 

The construction industry is one of the most hazardous in the US. According to the National Safety Council (NSC), the construction industry experienced the largest number of preventable fatal injuries in 2020. There were 957 fatalities and 250,000 medically consulted injuries in the construction industry in 2020.

Safety incidents are like an iceberg. There are the costs you see and the costs you don’t. Accidents have a significant impact on construction projects and can result in expenses that can quickly add up to thousands of dollars.

Costs of Construction Injuries/Impacts

For construction companies, the average cost of one lost-time injury on a job site is $35,000, though many injuries cost much more due to litigation, medical expenses and compensation, according to the Workplace Safety and Insurance Board. Furthermore, 6-9% of construction project costs are workplace injury related, leading to long-term increases in insurance costs and shrunken profit margins. A severe or deadly accident can mean the end of a project or company.

According to the Occupational Safety and Health Administration (OSHA), US companies pay over $1 billion per week in workers’ compensation for disabling and non-fatal injuries. Preventing these accidents means protecting the lives of workers while offering major savings for their employers. It is estimated that the full impact of workplace injuries and fatalities costs companies approximately $151 billion per year.

The human impact of accidents is even more significant and important than financial losses. In 2020, the US Bureau of Labor Statistics (BLS) reported 2.7 million work injuries and illnesses, and 4,764 workplace fatalities. One-fifth of those fatalities occurred in the construction industry.

Costs of Construction Theft & Vandalism

Construction job sites are naturally at high risk of theft due to the valuable assets found on them. Such items include large excavators, loaders, vibrator rollers, dumpers, generators, pumps, drillers, breakers, shutters, and scaffolds. Theft of high-value assets such as construction plants results in loss of profits for contractors.

Though it does not result in massive losses for contractors, vandalism is a nuisance that must be avoided. Vandalism manifests in the form of destruction

of in-place materials, graffiti, broken glass, and damage to construction plants. Taken together, theft and vandalism ought to be critical facets of commercial construction projects which must be given attention. Thieves and vandals can directly impact the success of a project and diminish the potential profitability of the project under construction. Theft is more costly to large-sized firms than to smaller firms, but vandalism is more costly for smaller firms despite the measures used by larger firms to combat theft and vandalism on their construction sites. 

Installing construction cameras at construction job sites is the most effective way to protect your projects from the threat of theft, trespass, arson, and vandalism. A camera on-site acts as a visible deterrent, which can prevent criminal activity before it occurs, thereby saving the costs that have been discussed above.