The Fourth Critical Challenge Facing Every Owner & Manager in The Crane & Lifting Industry Today – A Series
This is challenge number four in our five-part series.
In the crane and lifting industry, safety is paramount. Unfortunately, violations,
accidents, and negligence not only lead to devastating human consequences but also
significant financial repercussions, from increased insurance premiums to expensive
legal battles.
Violations Drive Up Insurance Costs
In January 2024, an employee at a large construction company with over 4,000 employees tragically lost their life while performing a task involving a crane. The incident occurred when the employee was pulling on a metal cable, causing the cable drum to engage and pull the worker onto the crane mast, resulting in fatal injuries. Preliminary investigations from OSHA indicated that the crane operator may not have been properly certified, violating OSHA standard 1926.1427 (a).
This is where insurance companies come into play. To determine annual premiums, they rely on your Experience Modification Rate (EMR)—a number based on your company’s safety record. A higher EMR signals higher risk and leads to increased premiums, directly impacting your bottom line.
Key factors influencing your EMR include:
- Annual payroll
- OSHA penalties and violations
- Health and safety program effectiveness
- Workers' compensation claims
The baseline EMR is 1.0, and any deviation from the industry average will cause the rate to increase or decrease. For example, if your workers' comp cost was $100 at an EMR of 1.0 in 2023, a jump to 1.2 in 2024 would raise costs to $120. When you scale these expenses across all your employees, the financial burden becomes even more substantial.
The Cost of Legal Negligence
Accidents involving cranes don’t just lead to insurance hikes—they can result in costly legal battles. Take, for example, a tragic incident in June 2019, when a crane crashed through an apartment roof, killing a young woman. Her parents filed a lawsuit against the developer and crane rental company for gross negligence, accusing them of failing to prepare the crane for high winds, which had been predicted for the weekend.
The case went to trial, and the jury found the developer liable for over $860 million in damages. The developer’s defense—that the crane rental company should bear responsibility—was rejected, with the jury ruling that the employer is ultimately responsible for maintaining a safe work environment, in compliance with OSHA regulations.
This case highlights the importance of adhering to safety standards and taking proactive steps to prevent accidents. Employers cannot delegate their safety responsibilities to contractors or rental companies.
When a workplace violation is identified, OSHA can issue a citation and assess a monetary penalty. Penalties are based on several factors, including the severity of the violation and length of time it has existed. For repeat offenders, fines can increase significantly.
How to Address These Challenges: Compliance and Prevention
1. Stay Compliant with OSHA Standards:
Ensuring compliance with current OSHA lifting standards is crucial for safety and legal protection. In recent years, OSHA inspections have placed additional emphasis on crane operations. The 2022 Subpart CC inspection instructions focus on the importance of operator training, certification, and evaluations.
A Compliance Officer may conduct a comprehensive site survey to assess potential safety risks related to crane operations. These inspections often include an examination of the crane's stability, proximity to power lines, the effectiveness of outriggers, and the general safety of the surrounding environment.
2. Develop a Comprehensive Safety Plan:
A strong safety plan should include clear responsibilities for operators, as well as routine inspections. Just like airline pilots conduct pre-flight checks, crane operators should follow a detailed checklist to ensure the equipment is functioning properly and that the work environment is safe for all.
3. Routine Equipment Inspections:
- Conduct thorough inspections of hoisting and rigging equipment before use.
- Ensure defective equipment is promptly repaired or removed from the site.
- Follow the guidelines set by OSHA inspectors to maintain a safe and compliant operation.
By taking these measures, crane operators and employers can significantly reduce the risk of accidents, minimize legal exposure, and keep insurance premiums manageable.
In the crane and lifting industry, the costs of negligence—both financial and human—can be overwhelming. Ensuring compliance with safety regulations, maintaining equipment, and fostering a culture of safety are key steps in reducing your exposure to these costly risks. Stay tuned for the next installment in our series, where we’ll dive deeper into the remaining challenges faced by crane owners and managers today.
