Driving Safety Forward: How Insurance and Forklift Inspections Can Lower Risk

Quick Quiz:

  • Do you own a forklift? If so, are you aware of the insurance risks associated with owning and operating this heavy equipment?
  • Have you considered the potential impact of forklift accidents on your Experience Modification Rate (EMR) and subsequent workers' compensation premiums?
  • Do you have a proactive approach to regular forklift inspections and maintenance to minimize the risk of breakdowns and accidents?

If any of these questions resonate with you, then you're in the right place. At SG World USA, we are committed to promoting workplace safety to help your workplace minimize insurance risks. When it comes to forklift operations, a comprehensive understanding of insurance coverage is important, empowering you with the knowledge to minimize risks, reduce insurance premiums, and protect your workplace. In this blog post, we will explore three key tips that can help you:

  • Understanding Forklift Insurance Coverage
  • Assessing and Mitigating Insurance Risks
  • Importance of Pre-Shift Inspections

  • By implementing these strategies, you can protect your business, reduce insurance liabilities, and create a safer work environment. Let's dive in and discover how these approaches can make a significant difference in your organization's risk management efforts.

    I. Understanding Forklift Insurance Coverage

    The True Costs of Forklift Incidents:

    According to the National Safety Council (NSC), the average cost of a work incident is $38,000 in direct costs. These costs include compensation for injured employees, medical expenses, and legal services. However, the financial impact of work injuries extends beyond direct costs. Indirect costs can reach up to $150,000 and include expenses such as hiring replacements, lost productivity, and reduced employee morale. Understanding these costs underscores the urgency of implementing effective risk management strategies and comprehensive insurance coverage to mitigate the financial impact of forklift-related incidents.

    NSC - Work Injury Cost

    Work injury cost

    A Crucial Coverage - Workers' Compensation: 

    Workers' compensation insurance is a vital safeguard for businesses in the event of work-related injuries or illnesses. It provides coverage for medical expenses, rehabilitation costs, and a portion of lost wages for employees affected by on-the-job incidents. Understanding the intricacies of workers' compensation coverage is essential to ensure proper support for injured employees. It includes:

    • Medical Benefits: Covers necessary medical treatment and rehabilitation services for injured workers.
    • Disability Benefits: Provides income replacement for employees unable to work due to work-related injuries or illnesses.
    • Death Benefits: Offers financial compensation to dependents or beneficiaries of employees who lose their lives due to work-related incidents.

    Having adequate workers' compensation coverage not only fulfills legal obligations but also helps minimize the financial burden associated with workplace injuries.

    General Liability Insurance: Protecting Your Workplace

    Alongside workers' compensation, general liability insurance is vital for different industries that utilize forklifts. It shields against third-party claims for bodily injury, property damage, or personal injury resulting from your business operations.

    This coverage provides financial protection in the face of lawsuits or claims arising from forklift accidents involving non-employees or damage to third-party property. Comprehensive general liability coverage is essential to protect your workplace from potential lawsuits and mitigate costly legal expenses.

    (Source: Work Injury Rights - Forklift Accident: Workers' Comp or Sue?)

    These coverages are crucial for protecting your workplace against property damage, injuries, and potential legal liabilities. It is also important to minimize these risks so your workplace can keep their EMR down to hedge against high insurance premiums. 

    What is an EMR?

    Experience Modification Rating, commonly known as EMR, is a factor used by insurance companies to determine workers' compensation insurance premiums. A company's EMR is similar to a person's credit score in the sense that it reflects a company's safety performance and claims history compared to other businesses in the same industry. A low EMR (1.0 or lower) indicates a strong safety culture and effective risk management practices, resulting in lower insurance costs. On the other hand, a high EMR (1.0 or higher) can lead to higher insurance premiums. In industries such as construction and others that heavily rely on forklift operations, maintaining a low EMR is crucial to reducing insurance risks and controlling costs.

    (Resource: Triax Technologies Blog - What is Your EMR or Experience Modification Rating?)


    EMR Safety Rating Gauge in SGW colors

    II. Proactive Risk Assessment and Mitigation

    To effectively mitigate forklift insurance risks, job sites should prioritize proactive risk assessment and mitigation strategies. Some key measures include:

    • Regular Inspections: Conduct thorough and regular inspections of forklifts to identify any mechanical issues or safety hazards. Promptly address and rectify these issues to ensure safe operation.
    • Operator Training and Certification: Ensure that forklift operators receive proper training and certification to operate the equipment safely. Ongoing training programs and refresher courses help reinforce safe practices and promote a culture of forklift safety.
    • Safe Work Practices: Establish and enforce safe work practices, such as clear operating procedures, proper load handling techniques, and adherence to designated traffic patterns. Regularly communicate and reinforce these practices to all employees involved in forklift operations.
    • Maintenance and Repair: Implement a proactive maintenance and repair program to ensure that forklifts are kept in optimal condition. Regularly service the equipment, address any identified issues promptly, and keep accurate maintenance records.

    By adopting these proactive risk assessment and mitigation strategies, job sites can significantly reduce the likelihood of forklift incidents, minimize insurance risks, and create a safer work environment for their employees.

    III. Implement Regular and Thorough Inspections:

    One of the most effective ways to mitigate forklift insurance risks is through regular and thorough inspections. During regular inspections, there are several key components and areas that operators should inspect to ensure the safe operation of forklifts. Here are some examples:

    Forks: Check for any signs of damage, such as cracks or bends, and ensure they are properly attached and secure.

    Tires: Inspect the condition and inflation of the tires, looking for signs of wear, cuts, or punctures.

    Brakes: Test the functionality of the brakes to ensure they are responsive and working correctly.

    Fluid Levels: Check the levels of fuel, oil, and hydraulic fluids and top them up as needed.

    Lights and Horn: Verify that all lights, including headlights and taillights, are functioning properly, and test the horn for audibility.

    Safety Devices: Ensure that seat belts, mirrors, and other safety devices are in place and in good working condition.

    Controls and Gauges: Test all control levers, buttons, and switches to ensure they are functioning correctly, and check that gauges are accurate.

    Battery: Inspect the battery for any signs of damage or corrosion, and check the battery connections for tightness.

    Additionally, during inspections, operators can observe their surroundings, looking for any potential hazards or obstructions in the operating area, and check for any unusual sounds or vibrations during operation.

    By conducting regular inspections and addressing any issues promptly, operators can help prevent accidents, ensure the safe operation of forklifts, and maintain a proactive approach to workplace safety. 


    Moreover, building a culture of safety within your organization demonstrates your commitment to risk management and the well-being of your employees. Remember, by investing in preventive measures and staying proactive, you can improve your business, protect your bottom line, and create a secure work environment for everyone. So, take the necessary steps today to minimize insurance risks and maximize peace of mind.

    At SG World USA, we offer a specialized range of inspection checklist designed specifically for forklifts. Our checklist covers all essential inspection points, including mechanical components, safety features, and operator controls. With our inspection checklist, you can streamline the inspection process, ensure consistent compliance with safety standards, and maintain accurate records of your inspections.

    If you have any questions or need assistance with your forklift pre-shift inspections initiatives, don't hesitate to reach out to us. Our team at SG World USA is here to support you every step of the way.

    Check out our previous article: Safety Beyond Standards: Staying OSHA Compliant in Every Aspect


    SG World USA Inspection Solutions

    Injury Facts - National Safety Council: https://injuryfacts.nsc.org/work/costs/work-injury-costs/

    Triax Technologies Blog - What is Your EMR or Experience Modification Rating?: https://www.triaxtec.com/blog/what-is-your-emr-or-experience-modification-rating/#:~:text=An%20EMR%20or%20experience%20modification,an%20indication%20of%20future%20risk.

    Work Injury Rights - Forklift Accident: Workers' Comp or Sue?: https://www.workinjuryrights.com/forklift-accident-workers-comp-or-sue/