There is a strong correlation between the economy and the level of investment made in safety and the amount of accidents that occur. When the economy was booming, more money was available to spend on crane safety training and safety programs. However, the chance of accidents occurring also increases with the increase of the work schedule. During a recession, less work may mean fewer opportunities for accidents, but often investment in crane safety training and risk management is scaled back to cut costs. Upgrades to aging equipment are delayed, payrolls are streamlined putting more responsibility on fewer employees, and there is an increased risk of accidents.
Consider that eight years of consecutive growth led to equipment sales of $24 billion in 1998. The economy remained strong through 2008. From 1997 to 2007, annual crane-related deaths ranged from a low of 62 per year to a high of 90. Then in 2008, the number jumped to 197, followed by another increase in 2009 to 217. As the economy has changed, challenges have increased related to increased costs, compliance requirements, accidents, and litigation.
Challenge #1: Impact of near misses, accidents, injuries and death on a business
According to a 2009 Fact Sheet from the Bureau of Labor Statistics, more than 50 percent of U.S. crane accidents that had injuries in 2009 resulted in fatalities. The primary causes of all crane related deaths and injuries are crane collapse (39%), overhead power line contacts (14%), struck by crane load (13%), struck by crane parts (11%), and other (23%).
Beyond the loss to human life and limbs, accidents and near misses cause tremendous financial loss. In just one year, in the U.S., the total cost of accidents and near misses including fatalities and non-fatal injuries was $13 billion. The National Safety Council estimates the cost of one lost-time accident at about $27,000, with punitive damages ranging into the millions of dollars.
Crane Industry compliance with OSHA and ANSI standards, proper and frequent equipment inspection, and robust training reduce the number of accidents significantly. Money spent on just one lost time accident could easily cover the cost of providing comprehensive and ongoing crane safety training programs for operators, site managers, and supervisors.
Challenge #2: OSHA regulations, investigations, costs of compliance, and imposed fines
At the same time that the crane industry is working to comply with new OSHA regulations, OSHA is shifting from an attitude of compliance assistance to one of compliance enforcement. Among the tasks employers are facing are ensuring all operators are certified by November 2014 and ensuring that other workers are trained and qualified. The new regulation also requires daily, monthly, and annual inspections of mobile and tower cranes.
Meanwhile OSHA’s 2010 and 2011 budgets increased funding for additional compliance officers and proposed shifting existing compliance assistance employees into enforcement roles. OSHA has tripled its number of crane industry “significant cases” (those involving citations of $100,000 or more) in the past year and is more frequently imposing penalties of $1 million or more.
The first step to a solution is to conduct a safety analysis and risk assessment of your company. Since 90 percent of crane accidents occur due to human error, proper crane and rigging training is imperative. An effective crane safety training program forms the basis of good worker protection and can save time and money. An analysis of fatality reports by OSHA indicates that 58 percent of crane-related fatalities could be prevented by adherence to OSHA standards.
Challenge #3: Equipment damage, failure, replacement costs, rental costs, and project delays
The recession forced many businesses into survival mode. Investment in risk management was scaled back, loss control personnel were laid off, upgrades to aging equipment were delayed, and reduced work forces put more responsibility on the employees that remained. The result is equipment damage, higher maintenance costs, and increased risk of accidents. Additionally, unexpected equipment downtime eats away at profits. According to 2011 statistics from Michael Grossman, attorney, preventable repairs cost businesses up to $2 million per crane.
Routine inspections by properly trained inspectors and operators ensure equipment is properly checked and maintained for more reliability, increased life and fewer incidents. Before every shift, crane operators should check both the equipment and the work environment.
Challenge #4: Increasing insurance premiums and litigation, legal exposure and expenses due to deaths or serious injuries
Besides the cost of fines, OSHA violations increase insurance rates. To determine a company’s Experience Modification Factor (EMF), the insurance industry weighs frequency of claims, accidents and, citations. Likewise, workers compensation insurance rates depend on the quality of your safety management program. And it goes without saying, that litigation is always expensive. One tower crane accident in 2000 caused one fatality. In 2006, a jury awarded damages of $5.3 million to the victim’s family.
Providing proper policies and procedures written into contracts, which include contractor and crane rental provider requirements, will result in lower incident rates.
Challenge #5: The hidden cost of not providing crane safety training
As previously outlined, there are hidden costs associated with not providing training—missed work days, rising insurance costs, OSHA fines, litigation costs, lost business. As one example, a crane being used to perform regularly scheduled maintenance on an amusement park ride tipped over, injuring two workers. The result was four months of lost revenue to the park and lost income to the employees.
According to 2002 U.S. Department of Labor statistics, the return on investment for every dollar spent on training is a savings of about 400%. Investing in training for operators, inspectors, supervisors for the purpose of reducing accidents is also an investment in ensuring projects are completed on time and under budget.
