By TGB Editorial

A Growing Risk Hiding in Plain Sight

For decades, builders have accepted the dangers of construction work: heavy machinery, working at heights, unpredictable weather, and the constant churn of subcontractors. But in recent years, a new risk has crept quietly into the balance sheets of builders and insurers, “worker-to-worker” claims.

These claims, where one worker’s actions result in injury to another, are ballooning to the point where they account for up to 50% of the total value of liability claims in some construction insurance portfolios. And while brokers and insurers are scrambling to manage the fallout, it’s builders who are caught in the crossfire, facing higher premiums, tense subcontractor disputes, and growing project risk.

The question is no longer whether these claims affect your business. It’s how well you’re prepared to handle them.

What Exactly Is a Worker-to-Worker Claim?

Unlike straightforward workplace injury claims, worker-to-worker liability is complex. It can involve:

• Main contractors and subcontractors: injuries caused by one party’s actions to another.
• Cross-claims and indemnities: disputes between different insurers representing different employers.
• Multiple layers of liability: arguments over which contractor is responsible for safe systems of work.

In other words, when something goes wrong, the fallout is rarely confined to a single employer. Instead, it often cascades through subcontractor chains, project partners, and insurance providers with the builder sitting squarely in the middle.

Why Claims Are So Expensive

On the surface, a worker injuring another might seem like a “minor” incident compared to structural damage or environmental disasters. But these cases often blow out because:

1. Litigation drags on – cross-claims between insurers extend timelines and costs.
2. Disputes are messy – questions over who controlled the worksite at the time complicate liability.
3. Mental health is rising as a factor – stress, bullying, and psychological injury claims are harder to quantify and increasingly common.
4. Documentation gaps – without thorough site records, builders have little defence when claims surface years after a project finishes.

Industry sources suggest that while physical injury claims have plateaued, mental stress-related claims have surged nearly 100% in the last decade. That trend alone is reshaping the liability landscape.

The Impact on Builders

For builders, worker-to-worker claims don’t just mean legal headaches. They have three very real consequences:

1. Insurance Premiums
   Insurers load higher premiums on businesses seen as “risky.” A bad claims history or even just inadequate risk management systems, can push premiums up significantly. For smaller builders, those costs can be crippling.
2. Subcontractor Relationships
   When disputes arise, they often pit builder against subcontractor. Allegations of poor supervision, lack of site inductions, or unsafe systems of work can fracture relationships that builders rely on to deliver projects smoothly.
3. Project Risk and Delays
   An unresolved claim can stall projects or scare off future clients. Reputation matters in construction, and builders who develop a reputation for unsafe sites or poor management may find tender success rates slipping.
   

Documentation: The Builder’s Best Defence

Ask any underwriter or claims manager and they’ll tell you: documentation is everything. If it’s not written down, it didn’t happen.

Site diaries, toolbox talks, visitor sign-ins, near miss reports, Safe Work Method Statements (SWMS), these aren’t just compliance exercises. They are a paper (or digital) trail that can prove, years down the line, that a builder took reasonable steps to maintain a safe site.

One underwriter recently described a well-kept site diary as “almost like a story of what happened on site and who was present.” In disputes where workers have long since moved on, that level of detail can make or break a claim.

Digital Tools Changing the Game

Fortunately, technology is making this process easier. Builders are increasingly adopting:

• QR code sign-ons – ensuring every worker and visitor logs their presence daily.
• App-based SWMS storage – making critical safety documents accessible on any device.
• Digital diaries – timestamped records of inductions, toolbox talks, and incidents.

These tools don’t just make compliance easier. They strengthen a builder’s hand when facing insurers, underwriters, or lawyers down the track.

Mental Health: The Next Liability Battleground

One of the fastest-growing areas of worker-to-worker claims involves psychological injury. Stress, bullying, fatigue, and mental health issues are increasingly making their way into legal claims and insurers are taking notice.

For builders, this means mental health can no longer be seen as “someone else’s problem.” Best practice now includes:

• Visible leadership buy-in: senior management must be seen supporting mental health initiatives.
• Confidential reporting systems: so workers can raise issues without fear.
• Employee Assistance Programs (EAPs): providing access to counselling and support.
• Mental health first aiders on site: trained staff who can intervene early.
• Fatigue management: avoiding excessive overtime and monitoring roster risks.

Supporting mental health isn’t just good for workers, it’s fast becoming a form of risk management.

How Builders Can Get Ahead of the Curve

So, what can builders do right now to protect themselves?

1. Audit your documentation systems – if you’re still relying on ad hoc paperwork, it’s time to modernise.
2. Engage your broker early – don’t wait until renewal to discover your claims history is a problem.
3. Invest in site culture – compliance isn’t enough; insurers want to see genuine safety leadership.
4. Educate your subcontractors – your risk is tied to theirs; make sure they understand expectations.
5. Prioritise mental health – it’s no longer optional in a sector where stress claims are skyrocketing.
   

The TGB Take

Builders are used to managing risk on site, but many underestimate the financial and reputational damage of worker-to-worker claims. With liability disputes now representing up to half of some construction portfolios, the industry can’t afford to treat them as background noise.

For builders, the challenge is clear: embed strong safety and mental health practices, back it all up with bulletproof documentation, and work with brokers who understand the unique realities of construction sites.

Because at the end of the day, it’s not just about protecting your workers. It’s about protecting your business.

Author: TGB Editorial