A clear risk management process to mitigate potential risks on a construction site is critical for every professional who accepts a new project. The high probability of an accident occurring on a job site places construction risks in a unique position. How should a business owner work around potential project risks? The simple answer is proper construction insurance, and a well thought out plan.
Insurance and Risk Management
Construction insurance is vitally important for managing construction risk. The large numbers of workers involved, the high-dollar equipment, the large investment of cash and time, and the risks associated with all these things makes risk management in construction projects difficult for the entire construction industry.
By identifying common, yet high impact, issues the team needs to avoid the more prepared a manager will be. Proper coverage may also limit company exposure to risks like unexpected injuries, liability or increased costs, while also helping you move forward with tough decisions.
Loss Control Insurance
For the construction industry, implementing ample management practices into daily business processes can help to effectively manage risk. However, in addition to putting safety procedures in place, ensuring that the company, its assets, and its employees are well-covered with insurance is vital, making risk management and loss control insurance an important part of doing business.
Loss control insurance can guard against the loss of assets and protracted litigation. Protracted litigation; as contractual requirements and lawsuits are primary challenges that contractors face regularly, getting in front of the curve on risk management is key. After all, the cost of risk management is one of the construction industry’s most volatile expense items, and one of the largest.
To predict and plan for risk, construction project risk needs to be handed with a proactive management plan instead of a defensive playbook. For instance, when a worker files a claim, you might think that is your only cost. However, you should keep in mind that expenses for additional items, like OSHA fines, equipment repair, hiring and training someone to replace the injured worker, and even damage control, can far exceed the amount of money spent to compensate the injured worker. Is
Risk management solutions can cover the unseen risks involved in doing business and help your company thrive in a competitive construction market. Ignoring the many inherent risks is actually one of the biggest risks a company can take.
Controlling the company’s risk by transferring it to responsible third parties (subcontractors) and eliminating job-site hazards are keys to keeping insurance costs down and litigation at bay.
Document subcontractors withhold harmless provisions and indemnification. Also of importance is enforcing the additional insured provision requirements in all construction subcontract agreements.
Equally important are construction site practices that promote safety, such as security fencing, warning signs, adequate lighting as needed, controlling entry to authorized personnel only, properly assembled scaffolding and other safety equipment, and a written safety practices guide for all staff and subcontractors to thoroughly understand and abide by. These include rules as simple as wearing a hard hat, safety glasses and steel-toed boots, but can get as specific as which people handle which equipment or parts of a project, and in what order.
Guarding Against Construction Project Risks
Review Worker Compensation History
These include your loss and claim history, and what you can do to improve it, or maintain it if your history is good.
Share Online OSHA logs for Workers
Managers can make it easier to comply with OSHA regulations, as keeping paper logs is somewhat difficult. Having the ability to post, review and update online makes it simple and hassle-free.
Loss control services
A thorough review of past claims can glean important details about your business, and how to identify potential project risk and plan for any in the future.
Identifying your loss exposures
This means finding those gaps in your coverages. Handle any gaps to cover your exposures and reduce losses.
Writing safety manuals and holding safety meetings
Be sure that your employees and subcontractors understand what their roles in safety for the company are, how to stay safe, and what’s in it for them.
Keeping equipment maintenance logs
Tracking ensures timely preventive maintenance so that equipment is safe and well cared for. This documentation is invaluable if litigation ensues.
Insurance for Construction Risk Management
The best business insurance companies, like Allied Insurance Brokers, help construction companies assess their risks and plan for them with adequate insurance coverages. Since Allied Insurance Brokers has a defined focus on the construction niche, our process for vetting risks and finding potential gaps is solid, utilizing trusted relationships and industry resources. This means we will build a customized insurance and risk management plan for you, so they can show you exactly the areas where you have exposure and explain to you how to handle that exposure.
For additional help with risk management solutions, contact Allied Insurance Brokers.