Four Tips for Drafting Contractual Safety Provisions

Construction accidents can delay a project and increase costs. More importantly, they can lead to serious significant injury or even death. Hence, it is imperative that owners and contractors make safety their top priority. To do this, they must create a culture of safety and continuously monitor and manage potential safety concerns on construction jobsites with the goal of zero accidents.

To foster a culture of safety, owners and contractors should address these concerns on the front end of the project through carefully written contract language. The construction contract establishes the rights, obligations and expectations regarding virtually every consideration of the parties on a project. If safety is to be job one, then the language should also address the contractor’s safety policies, procedures, preparedness and performance. Below are best practices for the inclusion of safety-related language into contracts.

1. ENSURE COMPLIANCE WITH THE EXISTING FEDERAL, STATE AND LOCAL REGULATIONS THAT APPLY TO ALL PROJECTS

At a minimum, written contracts should require all contractors, subcontractors and others performing work on the project site follow all applicable federal, state and local requirements. The contract does not need to specifically detail every law or regulation that the parties must follow. The burden is on the parties to know the applicable federal, state or local requirements and ensure their compliance. The contract may specifically reference or quote those regulations the contracting party wants to highlight. Following any highlighted provisions, the contract should also include language requiring compliance with all laws and regulations related to safety or otherwise governing the project. The contract may also set forth procedures for auditing compliance and the reporting of violations, especially any violation leading to an accident.

2. REQUIRE EVIDENCE OF A WRITTEN SAFETY PLAN

A number of OSHA regulations require contractors to maintain a written safety plan. Even where the governing authorities do not require a written safety plan, it is still good practice to require all lower-tier employers to maintain an updated written safety plan. The existence of such plans, establish a safety culture and help employees remember safety best practices and specific trainings as they work. Additionally, a written safety plan may help reduce costs related to workers’ compensation premiums. If the project has unique concerns, such as working around hazardous materials, dangerous surface conditions or infectious disease risks, the property owner should have a professionally developed video training on hand with required viewing before workers access the site.

3. REQUIRE EVIDENCE OF WORKERS’ COMPENSATION INSURANCE

Workers’ compensation insurance serves two purposes:

1. it ensures that injured workers get medical care and compensation for workplace injuries; and
2. it protects a businesses’ bottom line following the occurrence of a workplace injury or illness.

While Workers’ compensation insurance requirements differ by state, it is important to understand that most states do require it. A few states, including North Dakota, Ohio, Washington and Wyoming require that businesses obtain workers’ compensation insurance through state-funded operations. It is the responsibility of the contracting parties to ensure their compliance with the pertinent state laws. Additionally, The contract may mandate specific safety ratings (such as CPAR or workers’ compensation) and require that lower-tier parties be vetted on their safety ratings.

4. IDENTIFY AREAS THAT ARE SUBJECT TO CONTRACTOR’S CONTROL

It is common for multiple contractors/employers to perform different scopes of work at the same time on the project site. These contractors work in close quarters, and it is possible for one contractor’s work to create potential safety hazards for other trades. For this reason, it is important for contractors to understand and clearly communicate the specific areas of the project site that are subject to their control and oversight.

A safe workplace will protect employees from injury and lower a company’s expenditures. It will also increase productivity and quality of performance. In other words, safety is good for business and must be taken seriously from the very beginning—at the contracting stage. Identify the safety risks and manage them by contractually assigning the duties of responsibilities, documentation and compliance.