Costs Of Construction Site Accidents: A Case Study

Identifying a Suitable Case for Analysis

The chief objective of this study to determine the costs that result from construction site accidents so as to offer advice on the best safety practices and strategies in order to cut down on the number of such incidences. A construction organisation with good safety programs will not only acquire a competitive edge in the market but also safeguard the lives of its workers and increase the production output with low costs. Amadon Bakri 2006 suggested that for a construction organisation to improve its image it should be ready to adopt the most efficient ways of evading and handling construction site accidents as that increases its productivity (Yang, 2014, p. 482). 

In June 2008 in the construction of a new apartment building, a manual worker fell 14 metres to the ground when he was bolting a steel beam on the fifth floor during steel erection of the steel column.it happened when the ring of his safety belt came off, and with nothing to support him he fell off. It was a new apartment construction that involved steel-framed reinforced concrete which the foundation work had been completed the day before the day of the accident (Singh, 2010, p. 480). The state of the construction activity was as follows; the steel casing of the body part stood to 4 knots, the steel casing of the middle part was at 2 knots, and the steel casing of the remaining part had not been amassed yet. On a particular day, the steel erection work was the one that assembled the steel of the 3-knot section of the middle part that was assembled to 2-knot section. In that particular time and state of construction the steel was being lifted by a crane and the involved manual workers had done a temporary tightening of the steel column of the 3-knot section and the 2-knot column section with an attached board and bolt while on a crane as the transport means. The work went on as planned that morning and the manual worker attached their safety belt to the main rope and gangway for moving up and down the steel beam of the fifth floor and di their duties of tightening the 3 knot section of the steel column and the 2 knot section of the column while using the crane.

One of the manual workers stood on the beam of the fifth floor having secured his safety belt to the main cord was doing the assigned work as required. In the meantime another manual worker, there being no appropriate scaffold passed the cord of his safety belt through a gangway of the steel column put his weight on the cord of his safety belt in the shape of a u hanging and was in the process of doing his work when he suddenly gave out a loud scream. He fell about 14 metres to the ground. He was rushed to the hospital immediately, but he had sustained severe injuries on his hand and legs and had lost a lot of blood in the process. He took about 8 months to completely heal due to the severity of damage the falling had caused on his body. The victim of this accident can be said to be the cause of the very accident because he failed to use the safety belt in the proper way. His safety belt was a single hook hanging type and not the u-hanging type. Also, the worker used the wrong hook as it was not the one originally for the safety belt as he had acquired it differently and not as one of the safety belt packages and it differed from the standards of safety belts.

Suggested Areas of Analysis

Normally safety belts are used to secure the users to a stable point when working in a high place to prevent them from falling and the different safety belts are used me different circumstances.

Approximately 50 construction workers losses their lives annually while in line of work in Australia. This death frequency is almost thrice the nationwide workplace coverage with injury rates 50% higher than those which occur in the other Australian industries. (Wild 2005; Cole2002). Also, a construction worker is 2.4 times likely to be killed as a result of work-related injury than in  any other industry in Australia (Cole2002).Despite the fact that those rates are fairly comparable to those of the united states and Europe the twice more than those of the united kingdom (Richard, 2015, p. 276).

Heinrich considers human failure as the main reason for accidents and according to research 88% of the accident result from risky behaviour by the workers, 10% due to dangerous environments and the rest being acts of God.

A comprehensive study on the costs involved after a construction accident can help the stakeholders of the construction organisations understand the importance of investing in safety practice managing from a conservative view (Reese, 2014, p. 157).

Construction accident is very expensive as they incur unbudgeted costs, directly or indirectly, by causing delays, financial losses and also ruining the involved organisation’s reputation which can lead to serious implications such as penalties and be banned from tendering by the concerned government authorities. They most importantly, cost, not only the victim but also the communities to which they belong and their employers.

According to Heinrich’s study construction accidents are divided into two categories namely, direct costs and indirect costs. Direct costs can be defined as those that are related to the accident and its prevention. They are the costs incurred due to the damage of the physical items such as machines and equipment and the treatment of the victims of the occurrences and compensation to their families. According to Dorman (2000), direct costs are determined and accredited by the managers to the victim’s health and safety budget. Medical, legal and social security costs arising from work-related injuries are also direct costs. Leigh et al. (2000) agree with Dorman (2000).

Indirect costs are those that affect productivity as a result of the accident and are actually caused by the victim of the accident. They are what Leigh et al. (2000) refer to as indirect but not what Dorman (2000) claims as being indirect costs to the employer. Indirect costs include but not limited to replacement costs, investigation costs and moral effect on the colleagues of the victim (Reese, 2014, p. 589).

Costs Resulting from Construction Site Accidents

Direct and indirect costs can be further categorised as in the following diagram

This classification is used to determine the cost of construction accidents in various countries.

Construction cost accidents can be calculated in accordance with the degree of severity of the case under the scope. Therefore in order to accurately determine the cost of an accident, it’s important to classify the cases in a scale ranging from the least severe to the most severe by looking at each individual case in terms of periods the victims take away from the job (Poon, 2012, p. 69). The table below shows the scale and the terms under which the severity of the accident is viewed.

Accident type	Severity level	Definition
Short absence	Less than 5 days off work	A relatively minor work-related harm that causes one to miss work for less than 5 working days
Long absence	Five days or more off work and return to work on full duties	A relatively minor work-related harm that causes one to miss work for more than 5 days but less than 6 months.
Partial incapacity	Five days or more off work and return to work on reduced duties or lower income	An injury or illness that causes work to miss work for a period of more than 6 months.  (Shaun, 2017, p. 267).
Full incapacity	Permanently incapacitated with no return to work ever	Work-related injury or illness that makes one unable to work ever again.
Fatality	fatality	A work-related injury or illness which causes the death of the victim.

The procedure for determining the costs resulting from accident s is done in the following steps.

1. Determine and outline the groups of economic costs bore by the economic agents (employers, employee, and community).
2. Ascertain the most appropriate way of measuring the identified cost items.
3. Distinguish extend of severity by assigning different cost structures for each case.
4. Assign the costs depending on the severity(Schneier, 2015, p. 512).
5. Determine the number of accidents in each group and the amount of time lost due to it.
6. Calculate the average cost of an accident in a certain group by summing up the allocated cost of each item cost.(Perezgonzalez, 2011, p. 274)

The following is the classification of costs incurred in the case of a construction accident,

Production disturbance costs (PDC) – cost incurred to propel the organisation to the status it was before the accident.

• Human Capital Costs (HCC) – long-term costs due to loss of productivity potential that are used to restore the productivity level to the initial status.
• Medical Costs (MEDC) –victim treatment costs due to the sustained injuries during the accident.
• Administrative Costs (ADMINC) – costs for the compensation of the workers and their families, investigation of the incident and the legal fees(Moran, 2012, p. 25).
• Transfer costs (TRANC) –administration taxation and welfare payment costs.
• Other Costs (OTC) –unclassified costs such as those for caretakers, support, and variations.

Construction cost accident can be determined by using the cost related to each cost item and then summed up over the corresponding cost item to come up with an overall estimate.

The table below shows the various items that are involved in the total cost estimate for the cost groups that exist so far.

Conceptual group	Cost item	Short absence	Long absence	Partial incapacity	Full incapacity	fatality
Production disturbance costs	Cost of overtime and over employment Employer excess payments Staff turnover costs Staff training and retraining costs Loss of current income Social welfare payments	132 1,495 – – 331 –	2,120 1,495 – – 5,299 106,59	18,133 1,495 29498 2588 45333 29636	35,447 1,495 29498 2588 – 29636	3,610 1,495 29498 2588 – 29636
Total PDC costs		1958	19572	12682	98662	66826
Human capital costs	Loss of future earnings Loss of government revenue Compensational and welfare payments for lost income earning capacity	– – –	1320 – 10529	15500 258120 86886	1032482 258120 168290	1032482 258 120 168290
Total HCC costs		0	11579	113771	1458892	1458892
	Threshold medical payments Medical and rehabilitation costs Rehabilitation Health and medical costs	500 462 – 305	500 2187 – 656	500 12091 – 2055	500 12097 9667 1252	500 6111 – 367
Total medic costs		1267	3343	14646	23716	6978
Administrative costs(ACMINC)	Legal fines and penalties Investigation costs Travel expenses Legal costs Funeral costs Travel concessions for permanently incapacitated workers (Richard, 2015, p. 145)	– 28 6 – – –	– 527 27 – – –	– 832 257 – – –	828 2374 11232 11970 – 5616	13798 2840 404 11970 3617 –
Total ADMINC costs		34	554	1089	32020	32629
Transfer costs(TRANSC)	Deadweight costs of welfare payments and tax losses	85	590	4484	31015	6205
Total TRANSC costs		85	590	4484	31015	6205
Other costs	Caretakers costs Aids and modifications	– –	– –	– –	32345 10169	– –
Total other costs		–	–	–	42514	–
Total costs		3344	35638	260672	1686819	1571529

It’s advisable for construction industry organisations to adopt good safety measurements and practices so as to cut down those unnecessary costs that result from an accident.

The case of concern in this report involves an accident at the construction that happened as a result of the negligence of instruction by the victim and failure of supervision and close monitoring by the respective professionals. This accident resulted in severe injuries to the manual worker that made him unable to work for 8 months.

The accident incurred both direct and indirect costs which were expensive. The direct costs involved include the payment to the medical staff for his treatment and compensation for his injuries by the construction organisation involved (Man, 2013, p. 278).

The indirect costs incurred include the victim’s loss of productivity for the eight months before being able to return to work. He also lost his ability to earn for those eight months making it an indirect cost. Indirect costs were also incurred due to disruption of schedule and having to hire and train another manual worker for the specific task.

It’s true to say that most construction accidents are caused by human factors with negligence being the leading cause. A study in the UK identified project duration, design complexity restrictions at the site and method of construction as other factors (MacCollum, 2015, p. 263).

Steps for Determining Costs of Accidents

In this particular case in order to avoid the occurrence of the accident, the involved workers should have had high consciousness on safety management. When working in high place, it is of the essence for the safety management team to ensure that safety measures are taken such as making work floors and handrails and in case of unavoidable circumstances, safety nets and belts should be installed (Hislop, 2013, p. 116).

In the case of steel assembly work of structure, the involved professionals should always provide work plans that clearly define methods and procedure of the individual tasks and installation methods of crash prevention facilities at each step of construction (Ritchie, 2017, p. 447).

The involved professionals should have close supervision of the manual workers ensuring that they follow instructions as per requirements. They should also frequently examine the equipment in the case in which they may become worn out they should be replaced immediately. The manual worker in the case above did not have the right hook because no one had checked to see if it’s the right one and if they did it was ignored (Goetsch, 2013, p. 481).

As observed from this case it’s important to follow instruction and have the right equipment for the right task in order to avoid the occurrence of such accidents.

Conclusion

From the study above its clear that construction accidents incur costs that could have otherwise been saved. It’s therefore important for the individuals involved in the construction industry from the managers to the manual workers to observe safety practices. This can be done through employee safety empowerment, continuous monitoring and communication, employer, employee involvement in making safety rules, continuous employee training  and safety budget in case of an emergency (Clough, 2015, p. 138). This would ensure awareness by all individuals involved and therefore help reduce site accidents. Through this report, we become aware of the extent to which the consequences of construction accident can go in economic terms. The victims become a burden to the employer as they sometimes have to be given huge amounts of compensation (Chaturvedi, 2016, p. 451). For the identified case above the workers and supervisors should have worked closely to avoid that accident.

References

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