Charles Wilkinson, 51, from Berwick, was struck by the telehandler as it was being reversed the wrong way along a one-way residential street in Tweedmouth.
Newcastle Crown Court heard that contractor James Swinton was carrying out refurbishment work in the street on 10 November 2008.
The company had not requested a road closure from Berwick District Council and there were still residents’ cars parked in the street.
The telehandler driver was reversing his vehicle up the street the wrong way when it mounted the pavement and struck Wilkinson, who was taken to hospital with injuries to his pelvis, spine and ribs but later released.
But he died four weeks later as a result of a blood clot. A Home Office pathologist later determined the clot was caused by the incident.
After the case, HSE Inspector Dr Dave Shallow, said: “This was a tragic accident that could and should have been avoided.
“Site transport activities should be managed to minimise as far as possible the need for reversing. But where it is necessary to reverse, site managers should ensure that it is done in a safe and controlled manner, using a banksman, reversing aids on the vehicles and segregation of pedestrians and vehicles.
“The company could have asked Berwick District Council for a road closure which, along with these measures and the removal of residents’ vehicles, would have allowed safer movement of construction plant and vehicles.”