Construction insurance is vitally important for numerous reasons; 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. In fact, managers can use construction insurance as the ultimate risk management solution for their companies. The proper coverage limits your exposure to risks like unexpected injuries, liability or increased costs, while also helping you move forward with tough decisions.
To predict and plan for risk, you need to see it, even when it is not easily viewable. 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.
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 your company can take.
Insurance and 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 we 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.
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.
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.
Tips for Reducing Risks on Construction Sites
Workers Compensation reviews – these include your loss and claim history, and what you can do to improve it, or maintain it if your history is good.
Online OSHA logs – these 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 risks 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.
For additional help with risk management solutions, contact Allied Insurance Brokers.
*Allied does not deem this blog entry as a complete and thorough listing or overview of the above topic, and does not recommend it be primarily relied on. It only highlights some common issues and resolutions. For a thorough overview, please contact Allied’s Risk Engineering Division.