Safety has always been essential in the construction industry—but it’s also a financial issue. A single workplace accident can have far-reaching effects on employees, projects, and profitability. According to the National Safety Council, the average cost of a workplace injury is about $1,100. While that may not seem significant at first glance, the impact on a business’s bottom line can be much larger.
Why Safety Affects Profitability
Construction businesses typically operate within narrow profit margins—often around 3%. That means unexpected expenses, like the cost of an injury, take a direct toll on profitability.
Consider the math:
- At a 5% profit margin, a $1,000 injury requires an additional $20,000 in income to make up the loss.
- At a 1% profit margin, that same injury would require $100,000 in new income to offset the cost.
Those numbers highlight just how much additional work is needed to recover from a single injury. On top of that, accidents can also lead to higher insurance costs, longer work hours for employees covering for an injured coworker, or difficult budget decisions such as reducing hours or delaying projects.
Beyond the Financial Toll
The effects of a workplace injury extend well beyond dollars and cents. Injured employees often face time away from work, reduced compensation, painful rehabilitation, and disruptions to their daily lives. For the rest of the team, it can mean added stress, changes to workflow, and the ripple effects of reduced manpower on the job site.
Prevention Is the Best Protection
Profitability is important, but the top priority should always be keeping employees safe and healthy. Safe work practices—such as wearing personal protective equipment, following safety procedures, and staying alert to hazards—are critical to preventing workplace accidents.
It’s always better to spend a little extra time completing a task safely than to risk an injury that could change a worker’s life and impact the business. Every team member plays a role in building a culture of safety.
Risks and Reporting
The Trucordia companies provide construction businesses with insurance solutions designed to help manage risks and support long-term success. Our team has experience in the construction industry and works to help businesses reduce risks, maintain job site safety, and help protect profitability.
Learn more about construction business insurance solutions.
