Undertaking any sort of excavation work can be highly dangerous if proper precautions are not taken. There are all sorts of underground services running sometimes only a foot or 18" below the surface, and the problem is that they can be anywhere, even in places where you might not expect to find them.
For example, a building company may be building new homes on a plot which has been used for grazing cattle out in the countryside. You might be forgiven for thinking that there wouldn't be any underground services in the middle of that field. However, it could be that running across that field is the shortest distance between one small village and another, so that's where the electricity company and water company, and possibly gas company, all laid their services for that simple reason.
It might shock you to learn that, even though we have some sophisticated tools for locating underground services, there are still around 230 strikes on underground services of one sort or another every single working day. Quite a large proportion of them result in serious injury, and there are around a dozen fatalities every year. The simplest answer is that you should always assume that there are hidden underground services where you are going to dig, unless you have definite knowledge to the contrary.
One of the biggest dangers is electricity cables. Arcing current can cause severe burns to hands, face, and arms, even if protective clothing is being worn, and there is a great danger of fire. This is even greater if, say, a gas pipe is running alongside the electricity cable. There is danger of an explosion.
Damage to gas pipes also carries risk of fire and explosion. Damage may cause an immediate gas leak, or it could cause gas to leak later on even if it doesn't appear that the pipe has been damaged. The damage can occur when the excavation is being carried out, or it could occur later if, say, there is poor reinstatement and a gas pipe is not properly supported or is subject to unequal forces. Gases can also travel underground and could build up in cellars or basements.
Damage can occur to water pipes and sewers. Damage to water pipes is less likely to cause injury. However, a powerful jet of water under pressure certainly can cause injury, and it may also contain stones from the soil around it. Damage can also result in serious flooding and could cause the sides of an excavation to collapse if they are not properly supported, which could bury anyone working inside the excavation. Some sewage is pumped under pressure, but most is gravity fed. A sewer strike can cause health problems if workers are exposed to raw sewage.
Damage to telecoms cables is less likely to cause injury but can cause considerable disruption. For example, it could virtually shut down a complete industrial estate if nobody can make phone calls in or out.
Other pipelines can carry flammable liquids and gases, which could also be toxic. That presents a risk of fire and explosion along with poisoning. Inert gases such as argon or nitrogen carry a risk of asphyxiation.
Apart from all of the physical dangers presented, most of these strikes have a financial cost. At the very least, the utility concerned has to come out and repair the damage while the contractor has men standing idle. However, there can be claims for damages by companies whose production lines have been shut down. The main contractor may impose penalties. There will most certainly be claims for compensation from people who have been injured or relatives of anyone killed, and these can easily run into the hundreds of thousands. There can also be loss of reputation for the contractor responsible.
All of the foregoing explains why cable avoidance tools should be used before a single spade is inserted into the ground. They should be used to locate underground services, and those services should be marked. Even if it appears that there are no underground services, digging should proceed cautiously, and the cable avoidance tools used again every foot or so that is dug because a service may be found that was unable to be located from ground level.