Risk management services provide your construction company with the assistance you need in order to manage potential loss. The likelihood that a loss will occur is a constant, whether it involves losses associated with the transportation of equipment, tools or a stop in work progress if a disaster or other events occur. Because of these risks, the need for construction industry insurance is a must and risk management should be an intricate part of your business.
As a construction manager, it is important to recognize the potential losses you face and the steps that you can take to mitigate risk and lower the potential for loss. Managing loss and taking the proper steps to reduce your risks will only allow you to better manage your bottom line and bring your projects to completion on time and under budget.
Types of Potential Construction Site Losses
One of the most common types of losses that occur at a construction site includes injuries that occur due to accidents or the improper loading of equipment. Losses may also be experienced when damage occurs to a piece of loaded equipment that has not been properly secured or stored when transported from site to site. Other losses that may occur include vandalism, malicious mischief and theft of equipment and tools that have not been properly stored.
These potential losses can be quite costly to you and your company. The value of this loss can be identified with respect to replacement costs associated with purchasing new tools and equipment. It may also be expressed in terms of productivity hours lost when a worker is injured or workers’ compensation, liability and other construction industry insurance that may be needed, and the premium costs associated with making a loss claim.
Techniques for Properly Managing Construction Site Loss
Managing construction site loss requires vigilance on your part as well as a solidly written and communicated plan of action. The losses that occur due to vandalism, mischief and theft may be reduced by requiring that certain procedures be followed by your workers when securing the job site at the end of the workday. The purchase of securely locking sheds and other structures and gadgets designed to render equipment inoperable or deter the efforts of thieves is one technique that can cut down on loss. Posting a security patrol after hours or installing a security monitoring system on-site is another way to deter theft and thwart off malicious attempts.
Additionally, you want to ensure that your workers are properly trained on all safety procedures that address the securing of equipment for transport. These safety procedures should be reviewed on a periodic basis, and spot checks may be performed to determine if additional training is required for front-line staff whose job it is to secure the equipment. This level of vigilance will help you determine if your construction company’s policies and procedures are being adhered to, and whether gaps exist in the training you provide that warrant additional training.
A loss that may occur as a result of injury or death is an area that additional steps should be taken to mitigate their impact on your business. As studied by the Occupational Safety and Health Administration, the number of fatalities that are construction related in 2014 represented just over 20 percent of all U.S. worker’s deaths. Of the 4,251 private industry deaths reported, 874 were from the construction industry’s fatal four, which are:
- Falls (nearly 40 percent of all deaths)
- Electrocutions (8.5 percent of deaths reported)
- Struck by object (8.4 percent of reported deaths)
- Stuck in-between (1.4 percent of deaths)
The Importance of Construction Industry Insurance
Construction industry insurance coverage provides you with risk-based protection if a loss occurs. In some instances, evidence of such insurance may be required in order for you to compete for certain types of contracts, most notably for municipal, state and federally funded projects. Insurance provides you with the maximum level of protection for the lowest capital outlay (e.g., premium payment) and helps provide for any potential loss that may occur. Having strategic insurance coverage in place gives you both peace of mind and the necessary capital protection in order to properly address any financial cost associated with a loss.
It may be easy to view insurance in terms of being a necessary evil that you are required to have, but given the potential for financial loss, it should more aptly be considered a necessary and important cost of protecting your business. Make sure you have an insurance and risk management solution in place that protects your company from loss by contacting Allied Insurance Brokers. Working alongside one of our experienced brokers who understands the nature of your business and the potential for financial loss is a sure way to mitigate your risk when and if an actual loss occurs. Discover how our solutions-driven approach to construction industry insurance can keep your company moving forward and contact us today!