Construction business owners have enough on their plates.
Running a successful company is hard enough. Handling the legal consequences of a worker injury shouldn’t be added to that list.
One accident. One injury claim. Now your entire business is threatened.
Let’s take a closer look at the legal risks facing contractors and how to properly prepare your business.
Construction workers face some of the highest risk across all industries.
BLS recently reported that construction deaths accounted for about 20% of all workplace fatalities in 2024. That comes out to 1,034 dead workers. The hundreds of non-fatal injuries that lead to workers comp claims and personal injury lawsuits aren’t factored in either.
Your business could be on the hook for those injuries.
Table of Contents
- Why Construction Businesses Face Serious Legal Exposure
- Workers’ Comp vs. Personal Injury Lawsuits — What’s the Difference?
- Who Can Actually Be Held Liable?
- How Do You Protect a Construction Business From Lawsuits?
- When Do You Need a Heavy Equipment Accident Lawyer
Why Construction Businesses Face Serious Legal Exposure
Here’s the reality of the industry.
Falls, being struck by an object, and heavy equipment accidents account for most construction worker fatalities and major injuries each year. Falls — including ladder accidents in NYC — consistently cause the most serious injuries on urban work sites. When these incidents occur, one of the first calls the injured worker will make is to a heavy equipment accident lawyer.
You can bet that lawyer will be coming after your business.
On the workers’ compensation side of this, the National Safety Council estimates that the average workers’ injury requiring medical treatment only costs the business $42,000. A worker death costs over $1.3 million — before lawyers get involved.
That’s not an expense small businesses can absorb.
Workers’ Comp vs. Personal Injury Lawsuits — What’s the Difference?
You assume because you have workers’ comp coverage that you’re fully protected.
Covered from what?
Most contractors believe workers’ comp covers worker injuries outright. Sure, it pays for medical bills and partial lost wages. But did you know it doesn’t cover pain and suffering? Or that having workers’ comp doesn’t prevent a worker from also filing a personal injury lawsuit against other negligent parties on the job.
Here’s the kicker:
An employee can file a workers’ compensation claim with your business and then sue you, the general contractor, the property owner, the equipment manufacturer, a subcontractor — anyone really as multiple parties can be named in a lawsuit. If that employee is hurt badly enough and can prove negligence on behalf of multiple parties, your business could be found partially liable along with every other negligent party.
Business owners don’t see that liability coming until it’s too late.
Who Can Actually Be Held Liable?
Take a look at any construction accident lawsuit, and you’ll see numerous defendants.
In the majority of cases, there’s not just one at fault party. If the accident is serious enough, any combination of the following can be held responsible:
- General contractors – Failure to maintain a safe work site, proper hiring practices, and supervision.
- Subcontractors – If their negligence directly leads to the incident.
- Property owners – They have a duty to provide a safe work environment.
- Equipment manufacturers – Defective tools or heavy equipment leads right back to them.
Businesses that do everything right can still end up in a lawsuit. They’ll likely not be found at fault, but their information will be pulled, their insurance questioned, and their practices examined by a heavy equipment accident lawyer representing the injured worker.
If you’re working in NYC, there are even laws specifically designed to protect workers on elevated worksites. Labor Law 240 is one example that allows injured workers to sue any party on the site regardless of fault.
Businesses don’t realize how far lawyers will reach to find someone to blame.
How Do You Protect a Construction Business From Lawsuits?
Think defensively. A good offense is your best bet at preventing a lawsuit from hurting your business.
Have the Right Insurance Policies
If you have workers, you need workers’ compensation insurance. It’s that simple. Workers’ comp covers the financial burden of employee injuries and usually negates the ability for workers to sue your company.
As comprehensive as workers’ comp is for your workers, your business needs general liability coverage too. What if a pedestrian is injured while walking by the work site? Or one of your subcontractors gets hurt but workers’ comp doesn’t cover their injuries for some reason?
General liability insurance covers these incidents so one accident doesn’t devastate your business.
Document Everything
Lawyers love using OSHA violations as examples of your negligence. Let’s flip that around. If you have a well-documented safety plan that you’ve trained all employees on — with signatures proving it — you’ve already gone above and beyond to practice due diligence. Some other things every construction business should do:
- Retain copies of signed safety acknowledgements from all workers.
- Log equipment inspections with dates and signature requirements.
- Record incident reports immediately after accidents occur.
Fun fact: construction companies spend more money on workplace injuries than they do training their employees on how to prevent those injuries. 3.6% vs. 2.6%.
Use Strong Contracts and Indemnification Clauses
Any time you hire a subcontractor, your contract should include indemnification language. That way if something happens on the job, the liability falls upon the subcontractor — not your business.
When Do You Need a Heavy Equipment Accident Lawyer
Injuries don’t happen years down the line. When a worker accident happens, they happen fast.
Within moments a heavy equipment accident lawyer is building a case. As the business owner, you should have your game plan prepared as well.
Insurance companies work for you — but that doesn’t mean they’ll always side with your best interest. Just because you have the proper coverage doesn’t mean they won’t try and settle your case for the lowest amount possible. Sure, it looks good on paper. Your business doesn’t see the litigation that could occur down the road if your accident involved a third-party.
If a worker gets seriously injured on your site, take the following actions:
- Secure the accident area. Document everything. Do not let anything get moved until you take pictures.
- File a workers comp claim immediately.
- Notify your insurance carrier as soon as possible.
- Keep any defective equipment, take pictures of the work site, and hold onto all safety records.
- Contact a construction accident attorney before making any statements to insurance companies or your employees.
Time is of the essence. Worker’s comp claims are processed quickly. Hire your lawyer before your insurance company does.
Understand What You Could Lose
Did you know construction workers compensation claims cost US businesses $11.4 billion in 2023?
That breaks down to just over $60,000 per employer. Small businesses make up 71% of occupational fatalities. Fatalities. One mistake can destroy every employee’s family and your business.
Knowing how lawsuits work and how to protect yourself isn’t something you should gamble with. Learn the details and prepare your business for when an accident occurs.
Protect Your Business Before it Costs You Everything
Providing a safe work environment for employees has the added bonus of protecting your business.
The risk of getting sued isn’t going away. Every year more workers are hurt on the job and construction continues to be one of the most dangerous industries. Understanding the difference between workers comp and personal injury lawsuits, knowing who can be named in a lawsuit, and having a relationship with a heavy equipment accident lawyer before an accident occurs are the first steps every construction business should take.
Remember…
- Workers compensation claims and personal injury lawsuits are different but can both happen to your business.
- There are multiple parties that can be held liable from any injury on a construction site. Not just your business.
- Your general liability insurance policy will cover holes that your workers comp doesn’t.
- Document your safety protocol. Lawyers will ask to see it.
- Contact a lawyer immediately after an accident occurs.
Construction work is dangerous. Ensuring your business is lawsuit ready doesn’t have to be.
