Construction sites are inherently more hazardous than traditional workspaces. Because of these dangers, construction workers must abide by several safety regulations. These regulations help keep construction sites operational and secure. Below are several tips to help construction companies adhere to these regulations as well as promote a safety-driven job site.
The Occupational Safety and Health Administration (OSHA) requires construction sites to implement fall protection. Failure to meet fall protection standards is the most common citation OSHA issues. It is also one of the top causes of construction worker injury and death. There are several steps workers and employers can take to minimize falling hazards.
- Be aware of fall hazards on construction sites
- Only work in areas with fully installed fall protection systems
- Inspect personal fall arrest systems to ensure they are functional and intact
- Provide fall protection systems for work areas with unprotected edges that are six feet above a lower level.
- Examples of fall protection systems include guardrails, safety nets, and personal fall arrest systems. However, guardrails are the only method that prevent falls; the rest prevent long
- Fall protection also includes preventing workers from falling in holes as well as protecting them from falling objects. Employers can address these issues by sectioning off excavation areas and requiring workers to wear hard hats.
Well over half of construction workers make use of scaffolds. While scaffolds help workers perform their jobs, they also expose workers to fall hazards including falling objects as well as potential electrocution. To reduce these risks, workers and employers should take the following actions.
- Workers should wear appropriate safety attire while working on scaffolds. These include hard hats and non-skid boots.
- Workers should only use scaffolds in good condition. Scaffolds covered in mud, ice, or water are not safe.
- Workers should only ascend and descend scaffolding at the designated access points.
- Supervise or assign a supervisor to oversee the assembling and disassembling of scaffolding. Supervisors should inspect scaffolding daily before workers begin to use them.
- Only erect scaffolding on solid ground at least 10 feet away from power lines.
- Scaffolding should have guardrails, midrails, and toe boards to ensure the safety of all construction workers.
A safe work environment is not only vital to completing a successful project it is also required by law. With the multitude of OSHA construction regulations, it can be difficult for employers to stay abreast of all safety standards. The Reilly Company can help your construction business navigate the necessary safety requirements to protect your company from injury claims and fines. To learn more about managing your construction risk, contact us.
Every construction project poses unique challenges and risks. Managing these risks is vital for a construction company to survive and thrive. Hoping a risk does not become a reality or outright ignoring it is a recipe for financial disaster. However, businesses cannot begin to manage their risks without knowing the possible sources as well as how to handle them. Below is a breakdown of common threats within the construction industry and ways to keep those risks in check.
Sources of Construction Risk
Knowing what to expect is a major part of managing construction risk. Below are the various risk factors construction businesses face.
- Competitors: Rival companies are impossible to avoid. However, they can present a major risk to profitability. Business owners may feel pressure to match competitor prices or project completion guarantees, but this can result in slim profitability margins or create problems sourcing materials in time.
- Contractual risk: Continuing with the above, failing to deliver a project on time can result in fees and penalties. Contracts that demand unrealistic timelines are rife with risk.
- Cyber liability: A successful cyber attack can damage a construction company’s reputation as well as finances. As construction businesses digitize more and more of their data, they need the appropriate corresponding cyber liability coverage.
- Fiscal risk: Several elements are a threat to a construction company’s bottom line. For example, unchecked growth, increasing interest rates, decreasing sales, and the economy can all spell financial ruin for a construction company.
- Natural disasters: Earthquakes and floods are among the most common natural disasters that can jeopardize a construction business. Extreme weather can damage project sites or delay work.
- Project management risk: Failing to manage a project properly can result in injuries, damages, and delays—all of which affect a business’ bottom line. Poor project management includes inadequate guidelines and policies, failing to enforce said policies, and misjudging time and materials needed to complete a project.
- Work-related risk: Workers not taking the proper precautions on the jobsite, misusing equipment, and so on can result in job-related injuries and claims.
Managing Construction Risks
There are four schools of thought regarding managing construction risk. These are avoid, transfer, mitigate, or accept the risk.
- Avoid: Companies can avoid certain risks altogether. For example, if the company knows an area is prone to flooding, they may decline construction projects for that area.
- Transfer: Most companies transfer their risk by investing in various insurance policies.
- Mitigate: While some risks are unavoidable, construction companies can reduce their effect. For instance, creating and enforcing safety procedures can reduce safety hazards and incidents on job sites.
- Accept: Some risks are not controllable, such as unexpected weather conditions delaying a project. Most construction companies accept these risks, but there are ways to reduce the likelihood. For example, businesses can plan construction projects for when weather is usually mild.
Most construction companies determine which method of risk management they will take based on a reward to risk ratio. If a project will net a small profit, it is not worth taking on a high level of risk. However, if the profit margin is large, a company may choose to take on more risk. To learn more about construction risk management, contact The Reilly Company.
All businesses come with a certain degree of risk—some more than others. For example, the construction industry faces much more risk than a standard desk job. Loss of finances, personal injury, and property damage are just some of the upfront hazards construction companies face. After completing a project, construction businesses may experience other claims such as building defects. While these hurdles are part of doing business in the construction industry, there are several ways companies can reduce their risk.
Contract Hierarchy of Documents
Because of their length, construction contracts are prone to inconsistencies. In the event that an issue goes to court, both parties often have documentation backing their position taken straight from the contract. Without establishing a contractual hierarchy, disputes are more likely and the litigation process will be lengthy. Clarify such matters before finalizing a contract to avoid conflicts that a court cannot easily resolve.
Limitation of Liability
Most design professionals such as architects and engineers include clauses that limit their liability in regards to their services. Many project developers sign these agreements not realizing the designer may be responsible for significant economic loss later in the project. The developer will not be able to recoup the loss caused by the designer’s negligence due to this clause. Developers should read over these agreements carefully and consider the risk before signing it.
Insurance is vital to a successful construction company. Insurance flows between general contractors and subcontractors with policies providing additional coverage. However, in response to increased risk, insurance companies added endorsements. These endorsements can limit the effectiveness of additional coverage. Due to these complexities, construction companies should invest in a knowledgeable agent to ensure they have proper coverage. The Reilly Company can help your business navigate the intricacies of construction insurance. To learn more, contact us.
The large number and wide array of employees and contractors involved in the operation of a construction business creates extensive risk exposure. With the right coverage, construction companies can significantly reduce the financial risks associated with construction sites and the people who work in them and live around them. These risks include:
- Damage to company property or equipment
- Injuries or property damage caused to others not affiliated with the company
- Income loss due to business interruptions such as fires or severe weather
- Employee injuries that occur on the job
What are the critical components of construction insurance?
Construction insurance usually consists of multiple policies working in concert to protect a business. Failing to invest in the appropriate policies can make the difference between a profitable project and a losing investment. Further, insufficient coverage can bring about situations that damage both reputation and credibility. Some of the most common construction coverages include:
- General liability insurance. This provides coverage if a company injures an individual or damages another person’s property.
- Professional liability insurance. Sometimes called errors and omissions insurance, this provides coverage for if a client files a claim related to consultation services, advice, and so on provided by a construction company.
- Loss of income insurance. This coverage accounts for loss of income due to business interruptions.
- Workers compensation. Laws often dictate that construction companies invest in this type of insurance. It provides coverage in the event that an employee is injured on the job.
- Builders risk insurance. This functions like construction liability insurance. This type of insurance encompasses any on-site damage. Some policies include tools and materials as well.
- Commercial vehicle insurance. If a construction company uses trucks or vans for business purposes, they need this type of insurance. It provides coverage in the event of personal injury or property damage caused by company vehicles.
Investing in the right type of insurance is vital to maintaining a successful construction company. However, navigating which policies your company needs and how much coverage to invest in can be difficult. The Reilly Company Group can help you determine which policies are best for your business. To learn more about utilizing construction insurance to reduce risk, contact us today.
General contractors often hire subcontractors to help them with work they cannot do but are ultimately responsible for completing. For example, a general contractor may hire a subcontractor to do the wiring and electrical or the plumbing for a home. Subcontractors need to know when certain events require them to use their own general liability insurance to cover claims versus when they can rely on their general contractor’s builder’s risk policy.
Why is this important? Knowing which damages fall under the scope of which policy can help subcontractors avoid making unnecessary claims against their own policy. If subcontractors make claims too often, they can see an increase in their insurance premiums.
Which Policy Covers What Damages?
General contractors purchase builder’s risk insurance to protect the structure, materials, and equipment they use to build. Policies vary, but they often cover damage related to:
- Certain weather events
Most builder’s risk policies provide coverages for damages related to outside events rather than issues related to the construction work itself. However, some policies are all-risk. This means the policy covers a wide variety of damages except those clearly omitted—this means the policy can cover damage caused by subcontractors.
General contractors require their subcontractors to have general liability insurance as well. This acts as a safety net for general contractors because they are responsible for their subcontractor’s work. General liability policies provide coverage for:
- Property damage
- Slander, libel, etc.
General liability policies kick in when the claim occurred in a covered location such as the worksite and the subcontractor is obligated by law to cover the damages. This policy can also provide coverage for legal fees as well in the event that the claim goes to court.
The ambiguity derives from the fact that both policies can technically cover damages caused by the subcontractor. The Reilly Company can help subcontractors untangle the subtle nuances between these types of policies. Contact us today to learn more about builder’s risk and general liability policies.
Most construction companies know they need several types of insurance to protect their business, projects, workers, and more. There tends to be a heavy focus on general liability and workers’ compensation. However, there is a lesser-known risk that construction companies must consider: environmental damage.
Failing to address this issue can land businesses in court over damages their company inflicted on the environment. The Environmental Protection Agency (EPA) considers construction as a major source of pollution and subsequent damage. As a result, they view engineers, general contractors, subcontractors, and even architects as suspect in regards to pollution damage.
Things to Consider
Construction companies should not take concerns about litigation lightly. The potential for a lawsuit is all too real and can bankrupt smaller businesses. Other reasons to consider environmental insurance include:
- Most liability policies (general and professional) do not provide coverage for claims related to pollution.
- Even the most environmentally conscious construction crew can have a chemical spill or puncture an underground pipeline. Accidents happen and companies need to protect themselves from inadvertent releases of hazardous materials.
- Improper disposal of hazardous materials can result in public exposure and illness.
- Drainage issues at construction sites can contaminate local water due to runoff.
Having environmental insurance can protect construction companies in the event of a lawsuit. Most policies provide several coverage options that business owners can choose from to best suit their risk level. The construction industry is litigious; construction business owners need to protect their investment by reducing their risk. To learn more about environmental insurance, contact The Reilly Company.
As American re-urbanization continues, city buildings must expand in size to accommodate the increasing population density. More people means more pressure on the city’s infrastructure, including sewer systems. But how does this affect construction businesses?
Construction insurers are seeing a variety of water-based claims. For example, claims regarding water running backward up pipes and damaging roofs are not uncommon. Insurance companies believe this is because low-rise buildings are now expanding into multiple stories. The added construction calls for greater water usage, but the sewer system cannot always keep up with this demand. For example, major storms usually cause problems because the water has nowhere to go. The increased water damage results in increased claims.
The growing number of water claims can create challenges for construction companies of many shapes and sizes. In addition to urban density issues, climate shifts have made it more difficult to anticipate drainage needs in a given area. Non-frame related risks now include water damage as the biggest threat. Another major concern is sewer backup. Because this is a new issue, many construction companies are unfamiliar with the water problems that can plague their site.
The best way to reduce your construction company’s risk is to create a proper risk management plan. The Reilly Company Group can help you evaluate your risk to determine what level of coverage your business needs as well as develop and implement a risk management strategy. Contact us to learn more.
Construction insurance provides a variety of coverages to meet specific needs. This can include a business owner’s policy (BOP), workers’ compensation insurance, commercial vehicle coverage, employment practices liability, and more.
Business Owner’s Insurance (BOP)
This protects your business from legal claims and business interruptions. It often provides general liability and loss of income coverage as well. Some examples of covered events include injuries on your property, property damage, and loss of income due to business interruptions like building or equipment damage.
Workers’ Compensation Insurance
If an employee becomes ill or injured while on the job, they may file a workers’ compensation claim. This type of insurance helps pay for medical bills and lost wages. This type of insurance is mandatory in some states. It protects both the employee and the employer from unexpected medical costs.
Commercial Vehicle Coverage
This is typically an essential coverage for businesses in the construction industry. Your power units are crucial to getting the job done. From parts to theft to liability, protecting them protects you.
Employment Practices Liability
Employment practices liability protects you and your organization from massive exposure to liability in the event that a current or former employee pursues legal action. This legal action can come in many forms, and can prove costly to your bottom line and your reputation without the appropriate resources in place.
Legally Mandated Coverages
The legal requirements for construction coverages vary from state to state. Several factors inform the coverage requirements and costs, including where and when your business operates as well as the total number of employees. Contact The Reilly Company to learn more about construction-specific coverages.