In the building materials industry, the fast pace and physical nature of work environments make safety training an absolute necessity. But when staff are poorly trained—or not trained at all—on safety protocols and incident response, the consequences go beyond on-the-job risks. They can also significantly impact your insurance coverage, premiums, and liability exposure.
If your business is cutting corners on training, you may already be paying the price without realizing it. Here’s what poor training can cost you from an insurance standpoint—and how to avoid those losses.
- Higher Workers’ Compensation Premiums
The risk:
Accidents resulting from poor safety training—like improper lifting, mishandling of materials, or failure to use PPE—often lead to workers’ comp claims.
The insurance impact:
Frequent or severe claims raise your experience modification rate (EMR), a key factor in calculating workers’ comp premiums.
A higher EMR signals that your workplace is riskier, resulting in increased insurance costs over time.
What to do:
Implement job-specific training and document all sessions. Reinforce best practices regularly to reduce claim frequency and severity.
- Increased General Liability Exposure
The risk:
Improperly trained staff may cause injuries to third parties or damage customer property—especially during deliveries, product handling, or jobsite visits.
The insurance impact:
Liability claims tied to employee negligence can lead to higher premiums or deductibles.
Insurance underwriters may reduce coverage limits or add exclusions based on loss history.
What to do:
Train all field and customer-facing personnel on situational awareness, material handling safety, and emergency response protocols. Use checklists and field audits to monitor compliance.
- Coverage Denials Due to Negligence
The risk:
If a serious incident occurs and it’s found that staff were inadequately trained, insurers may view the incident as preventable and decline coverage.
The insurance impact:
Some policies include exclusions for incidents caused by gross negligence or failure to follow standard safety procedures.
Lack of documented training can weaken your defense in a claim or lawsuit.
What to do:
Maintain a comprehensive safety training program with records of attendance, testing, and certifications. Regularly review and update content based on job duties and regulatory changes.
- Loss of Insurability
The risk:
Repeated incidents tied to untrained or poorly trained staff can lead insurers to label your operation as high risk.
The insurance impact:
Your policy could be non-renewed at the end of the term.
Future coverage may only be available through high-risk carriers—at significantly higher rates and with less favorable terms.
What to do:
Conduct internal safety audits and risk assessments. Identify gaps in training and proactively correct them before insurers take notice.
- Reputation Damage and Legal Exposure
The risk:
A poorly handled incident—especially one involving injury, environmental harm, or public safety—can result in lawsuits and negative press.
The insurance impact:
Even if a liability policy covers initial claims, your company may face higher defense costs, settlements, or penalties.
Repeated litigation can trigger premium hikes across all lines of coverage, including auto, property, and excess liability.
What to do:
Ensure staff are trained not just in daily safety procedures, but also in emergency response, communication protocols, and post-incident reporting.
Final Thoughts
Insurance providers look at training as a reflection of your company’s overall risk culture. When employees are properly trained, incidents are less likely—and when they do happen, your team is equipped to respond quickly and correctly.
Failing to invest in safety training may seem like a short-term cost saving. But in reality, it’s one of the most expensive mistakes a business can make—especially when the insurance implications start adding up.
Train smart, document everything, and make safety an ongoing priority. Your workers, your customers, and your bottom line all depend on it.
