Costs of Accidents and Injuries to the Construction Industry

Abstract

In 1979, the Business Roundtable (BR) commissioned a study to determine the true costs of accidents and injuries in the construction industry. At that time, the BR concluded that accidents and injuries account for 6.5% of the total cost of industrial, commercial, and utility construction. Since the time of the original study, much has changed in the construction industry. Most importantly, the costs of workers' compensation insurance have skyrocketed and there has been a rash of third-party lawsuits as a result of accidents on construction sites. This paper reexamines the total costs of accidents and injuries to the construction industry, updating the original inputs, and, where necessary, modifying methods. Because the results are very sensitive to several assumptions, the analysis is performed using a range of values for each key assumption, rather than just a single figure. This paper shows that the total costs of accidents have risen to somewhere between 7.9% and 15.0% of the total costs of nonresidential, new constrution.