9 out of the 10 most dangerous jobs in America are related to construction or physical labor.
In 2014, there were 4,821 work-related fatalities, 800 of which were in construction.
A single sprain of a construction laborer would require the company to make an additional sale of $2,155,833 to cover the impact.
This collection of stats is intended to prove that the job of a construction worker is dangerous, and also that a single injury on a construction site or an illness could profoundly impact the company’s profit.
However, despite knowing the danger of the job and the impact it could have on the company’s growth, we find that most workers in the construction companies are under-protected.
As it happens, insurance companies have been taking an increasing amount of interest in the safety of construction workers. They have been advocating that construction companies use technology to improve safety. Why this interest? What’s in it for insurance companies?
Why are insurance companies advocating use of technology to construction companies?
1. Better premium estimation
At one level, contractors merely pay a median premium of $70 per month, i.e. $825 per year for general liability insurance. It is this general liability insurance that safeguards the construction workers from injuries and accidents. As the size of the company and the scope of the projects it handles grows, so too does the premium. The premium varies depending upon various factors such as population employed in specific job types, the distribution across locations, and even worker behavior.
Calculating an appropriate premium for such complex requirements is extremely hard. Needless to say, a lot rides on this calculation. Build in too much safety into the premium calculations and the construction company could end up picking another insurer for lower premiums. Make the premium too low and the financial risk the insurance company has to assume balloons unacceptably.
To ensure that the premium is calculated accurately, insurers need data. They want to know, how many workers, what kind of roles, where are they placed, what has been the track record on the site, within the company, and even for specific categories of workers. This data drives a better understanding of risk. As it happens, technology can play a critical role in providing comprehensive, accurate, and relevant data. For instance, data can be generated from IoT-powered wearable devices used by workers as well as associated with locations.
The location-tagged data generated from location-tracking solutions, when combined with data from smart hardhats and smart tags can offer valuable insights about the worker’s biometrics, environmental hazards, and other potential threats on the site. As enough data accumulates, insurers can also use predictive analytics to calculate the probability of accidents or injuries for construction workers based on their job type, history of injuries, accidents, or illnesses, and safety record. Based on this information, the insurance companies can fix the perfect premium pricing that is right for everyone.
2. Personalized insurance coverage for workers
No two roles are the same. For example, a worker working at height is more susceptible to injuries and accidents than a locksmith. This reflects in the insurance cost too. For instance, the median cost for a roofer will be $3950 per year, while a locksmith’s median cost would be as less as $35 a month. Of course, not all the variables are so well known as jobs evolve and conditions vary. To make better choices, companies must collect data about the conditions in and around the construction site, the kind of job each worker does, and about the possibility of accidents in those areas. They must understand the other circumstances at play, for instance, if accidents happen more when workers are solitary or when they are in groups. This information will help them plan better strategies to safeguard the workers.
Technology can play a crucial role here as data gathered from wearable devices and IoT sensors could provide companies with insights on the jobs that are riskier and that may benefit from higher insurance coverage. Data analytics can also arm construction companies with historical data such as health risks, age, and other variables to choose the appropriate product for their population of workers.
Obviously, construction companies (and insurers) would benefit from acquiring the optimum insurance coverage designed for the specific type of work construction workers do.
3. Fewer claim payouts
Perhaps most obviously, insurance companies encourage construction companies to use technology to reduce incidents related to injuries and fatalities. It’s the moral imperative of construction companies to take all necessary proactive measures to safeguard their workers. While there are guidelines, tools, and processes to protect workers; the real gamechanger could be technology. There are a variety of use-cases that technology is already “enabling”.
It is practically impossible for managers to always monitor the safety of the workers. That’s where technology plays a part. Managers can track the movements of the users and the environment of the workers efficiently with the help of IoT sensors and wearable devices. The data generated from these technologies can be useful in understanding the common threats, enhancing safety in sites, reducing accidents, and, obviously, the claim payouts. IoT sensors and other technologies help in making construction sites smarter and safer. Let’s look at some common ones used by construction companies on site.
- Wearable devices for location proximity and geofencing detect the location of the workers and send real-time alerts to them and their managers every time they get close to a dangerous location or moving equipment or vehicles such as forklifts. This helps to reduce the chances of collisions and accidental entry into no-go zones.
- Smart devices such as smart hardhats and smart tags also provide sensor-based contextual information about the proximity to dangerous locations, which helps in keeping the construction workers safe. These smart devices are also particularly useful in protecting workers from harsh weather conditions. The in-built sensors automatically detect potential environmental threats for workers such as thermal exposure, unsafe exposure to noise, fall-detection, etc, and alert the workers on time.
Data analytics has been leveraged by construction companies and insurance companies to try to get some insights about past, existing, and future conditions on-site for better decision-making. However, there’s more to technology than data analytics. Construction companies can also use technologies such as geofencing and PPE reminders to actively prevent accidents that can easily be avoided. Insurance companies recognize this. They also understand the power such technologies can add to their own efforts to better serve the construction industry.
Stay tuned for future blogs as we dig deeper into the technologies that empower construction companies with solutions that can improve productivity and address common problems related to safety.