How to Reduce Insurance Costs for Construction Companies

The construction industry is currently experiencing a range of challenges, including rising material costs, labor shortages, and an increased focus on safety and sustainability. These factors have led to increased operational costs, including insurance premiums.

Here we'll dive into the cost of accidents and insurance to construction companies, and how employee happiness directly impacts both.

Let's jump in… 

How Much Accidents and Injuries Cost US Construction Companies Each Year

Accidents and injuries are a significant cost for US construction companies. In 2023, the total annual cost of all construction injuries in the United States was estimated to be more than $11.5 billion. The average cost of one lost-time injury on a job site is $35,000.

How Much Insurance US Construction Companies Pay Each Year

Insurance costs for construction companies are substantial. On average, construction businesses and contractors pay $1,173 annually for a business owner's policy. As building material and medical costs increase, general liability insurance costs are also rising.

Why Employee Happiness is the Key to Reducing the Cost of Accidents and Insurance

Research shows a strong link between employee happiness and safety. Safe Work Australia reports that almost 10% of workers compensation claims are due to psychological hazards. With psychological injury claims increasing 73% over the past 5 years (costing 4x of a physical injury claim), construction companies need to pay close attention to their people. 

Because happy employees are better at keeping themselves and their colleagues safe. Moreover, workers who are happy are more likely to complete tasks, reducing one of the biggest hazards in the construction industry.

How Employee Happiness Impacts Safety

Happy employees are more engaged, more productive, and less likely to have accidents. They are also more likely to follow safety protocols and contribute to a positive safety culture.

3 Ways to Increase Employee Happiness

1. Establish Clear Priorities: Make sure your employees know what is expected of them and what they need to achieve.

2. Provide the Right Tools: Equip your employees with the tools they need to do their jobs effectively.

3. Foster a Positive Work Environment: Encourage open communication, recognize achievements, and promote a culture of respect and collaboration.

‍

{{ Learn more with our Culture of Safety eBook here }}

3 Ways to Measure the Success of Employee Happiness Initiatives

1. Employee Surveys: Regularly ask your employees how they feel about their work, their colleagues, and the company.

2. Productivity Metrics: Happy employees are more productive. Monitor productivity levels to gauge employee happiness.

3. Retention Rates: Happy employees are less likely to leave. Keep an eye on your retention rates as a measure of employee happiness.

‍

By focusing on employee happiness, construction companies can not only create a safer and more productive work environment but also significantly reduce their insurance costs.

‍

At PepTalk our team specializes in improving psychological safety, enhancing morale and reducing attrition with our data led engagement platform. We help companies like Clune Construction, Kirby Engineering, Jacobs, and John Paul Construction connect their teams across various sites and cities. 

See the results our clients are achieving each month here and how the platform works here.