You cannot adequately protect your construction business without understanding the potential risks it faces. At first, glance, running a construction business may seem easy, but there is more to it than meets the eye. There are building codes to adhere to, policies to follow, licenses to get, and accidents to mitigate.
Did you know that fire causes considerable damage to engineering and construction costs and accounts for some 27% of all losses? Fire is not the only thing to worrying thing. Natural disasters, theft, worker injury, and so much more are inherent risks to your business.
Recovering from the financial repercussions of an unplanned event can be difficult. In fact, without the proper risk program in place, your business may not recover at all. Find out tips on how to recover unforeseen damages your business might incur in this article.
5 Steps to Protect Your Construction Business
- Use safety equipment
According to the Occupational Safety and Health Administration, almost 58.6% of construction job fatalities result from employees falling, being electrocuted, crushed, and getting struck by a heavy object. Construction companies lose thousands of dollars to injury claims.
Reduce the number of fatalities and injuries on your construction site by:
- Carrying out regular safety training to ensure workers know how to use equipment correctly.
- Encourage the use of personal protective equipment such as headgear, gloves, personal fall arrest systems, respiratory protection equipment, and face shields.
- Regularly maintain equipment. Equipment wear and tear contribute to workplace accidents. Maintaining equipment such as ladders and ensuring scaffolding is well built can prevent accidents.
- Cover trenches that are not in use.
- Supervise workers to ensure the implementation of all safety guidelines.
- Perform a risk assessment
Assess the type of risk your construction site is open to.
Ask yourself:
- Is the area secure?
- Is the location prone to flooding?
- Is there any risk from vandalism?
- Are there regular earthquakes?
- Do I have adequate site security?
- Which workers are most at risk?
Aside from identifying any immediate risks to your business, risk assessment helps you predict and mitigate future risk, draw up accurate budget plans, and develop contingency plans.
- Get the correct insurance
Construction site disasters are costly. But with the right insurance policies, you can keep your finances safe and meet all your claims. The most vital coverages for all business types are discussed in detail here.
What insurance policies are a good fit for your construction business?
- Builder’s Risk insurance ensures that your insurable interests, such as materials, equipment, and construction site, are protected for the duration of your project.
- General Liability insurance protects your business from third party injury and property damage claims resulting from your construction activities or products.
- Workers Compensation covers employee medical expenses for job-related injuries. It also covers loss of wages, occupational rehabilitation, and burial costs.
- Inland Marine insurance protects construction materials and equipment from damage and loss during transportation.
- Adhere to industry requirements
The construction industry is subject to industry regulations, licensing requirements, building codes, and ordinances. Before you begin any construction, ensure you have registered with state or local authorities and acquired the right licenses.
Failure to do so can result in your business being:
- Shut down
- Heavily fined
- Removed from a project without compensation
- Forfeiting its legal recourse if a client refuses to pay for your work
- Specialize
Competition for projects is rife in the construction industry. For your business to succeed, you will need to ensure customer loyalty and grow your client base.
You can do this by:
- Offering specialized construction services or
- Streamlining your business model to offer something unique.
As a contractor, you may want to carry out as many constructions related jobs as possible. Sadly, this can interfere with the quality of your work. Concentrating on what you are best at can standardize and improve the quality of your work.
Help your business stand the test of time
Running a successful construction business requires planning and implementation. A good starting point in achieving this is by investing in the correct insurance. This way, your company will stand the test of time.