The insurer's answer to mitigating jobsite risk: IoT technology

While new regulatory controls and smarter practices on the jobsite are helping to make the construction industry safer, it is still one of the most dangerous occupations in the U.S. Recent trends, like the shortage of skilled workers and accelerated construction schedules, are exacerbating jobsite risk.

With hundreds of workers from different trades working together on complex, constantly changing jobsites, and operating heavy equipment, dangerous conditions persist. Fatal accidents in construction were up 5% in 2016 (the latest year statistics were available from the Bureau of Labor Statistics). In addition to these tragic fatalities, non-fatal injuries are also a major problem. On top of the physical harm they cause, these incidents also create significant business consequences, costing contractors billions of dollars, putting projects behind schedule and causing insurance costs to rise.

All of these factors create significant risk on the jobsite. Fatalities and injuries that occur, resulting in workers’ compensation claims, and lost time and productivity, are a key area of risk. Additionally, contractors have general liability risk when visitors, or even unauthorized people, enter the site and become injured, as well as the risk of property damage that can occur from improper use of equipment.

So how can construction risk be lowered?

Boosting safety is the first step to lowering insurance risk

Insurance firms are teaming up with contractors to explore the benefits of digitalization, and more specifically, Internet of Things (IoT) technology, to gain much-needed visibility into the real-time operations of the jobsite. This will enable them not only to improve safety and reduce risk, but also to operate more efficiently.

IoT devices can automatically collect information from workers on-site to detect falls, record safety data and streamline communication. They provide automatic, real-time text message notifications, including the location and time of worker falls, enabling project leaders to deploy the appropriate response services more quickly and effectively, reducing the likelihood of compounded injuries. These notifications also allow project leaders to better investigate the circumstances leading up to an incident, providing critical context that can minimize risk exposure for future incidents. For insurers and contractors alike, this means increased, data-driven visibility into site operations and safety incidents, improved risk identification and assessment, and ultimately, pricing more accurate premiums.

Knowing who is on the site is key

While reducing jobsite risk — through greater visibility into worker falls and other incidents and proactively preventing them — is critical, how do you ensure that only credentialed workers are on the site in the first place? What happens if an accident occurs to an uncredentialled person who should not be on-site?

IoT again can play a major role in addressing this challenge. Access control solutions — like turnstiles — help limit entry to authorized personnel. Combining them with IoT wearable sensors that contain worker information, including their training certifications and authorization to be on-site, can help reduce this risk.

When workers are equipped with IoT-based wearables, site superintendents not only can see in real-time the workers present from every trade (plumbing, electrical, etc.), but also where they are located as they move around the jobsite. Further, beacon sensors placed at areas that are off-limits to specific workers can notify managers immediately if a worker is near one of these places of interest. This enables managers to intercede and reduce the risk of a plumber, for example, entering a hazardous blasting site, or a worker approaching patient rooms in a hospital under reconstruction.

The data generated by IoT devices, both individually and aggregated, help improve safety and reduce risk in additional ways, including enabling:

• Better reporting:  In the past, it has been difficult to access accurate worker data, including the time spent on site, location of the worker and a snapshot of safety incidents. When contractors and insurers view reports generated from actual IoT data, they can see patterns and insights that can help them improve safety practices as well as more accurately assess risk.
• Less fraud: Since real-time IoT data captures actual information regarding a real or alleged fall — including the location of the incident, the height of the fall and impact — it can help combat fraudulent workers’ compensation claims and prevent future ones.
• Improving behaviors: Real-time incident data can help site superintendents identify risky behaviors and proactively prevent future incidents and injury. As an example, after receiving daily fall notifications from a tradesman working in the auditorium of a high school construction project, a site superintendent discovered that he was regularly jumping off the stage. Similarly, a superintendent in New York City was able to identify several workers who were jumping into a pit during the excavation phase as opposed to using a ladder. In both these incidents, the superintendents were able to help the workers correct these behaviors and use better safety practices to prevent potential injuries and claims.

Fostering a safer worksite

Insurers and contractors alike are seeing the potential of using IoT technology on the jobsite to increase safety and reduce risk. According to in-depth interviews with insurers conducted during a recent Dodge, Data & Analytics study, they agree that real-time site monitoring can have a high potential for reducing risk on-site, but are still carefully evaluating the technology. The study also found that the top motivator for adopting IoT technology among contractors is the possibility of lowering insurance premiums.

As contractors and insurers begin to amass aggregate historical data, specific risk factors and profiles that are meaningful for claims management and administration will begin to emerge. Using data-driven analytics, insurers will be able to identify and proactively address not only the lagging indicators of safety and risk issues, such as a high number of falls and safety events, but also the leading indicators, such as a pattern of workers jumping from a height instead of using ladders.

Against a backdrop of growing worker claims and subsequently rising insurance costs, the ability to measure risk is fundamental to managing it in the fast-moving construction environment. When contractors and insurers work together, using IoT and other technologies, risk can be uncovered, mitigated and significantly reduced, not only curbing worker claims, but also fostering a safer worksite.

Related:

• 7 trends making engineering, construction claims bigger and costlier
• How technology supports more inclusive insurance businesses
• 5 issues to consider on design/build projects

Ian Ouellette is VP of Product at Triax Technologies, a provider of technology for the connected jobsite. The views expressed here are the author’s own.