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.
Most executives are aware of the risks their business faces, but they are failing to keep pace with them. One study found that 70 percent of executives believe the risks to their company are greater in number and more complicated than in previous years.
Meanwhile, only a quarter of those executives felt their risk management plan was robust enough to handle the threats to their business. This highlights the disconnect many business owners experience when it comes to business challenges and how to handle them.
Strategic Planning and Leadership
This growing issue is likely the result of failing to incorporate risk management into strategic planning for the company. If executives do not see how risk management advances company goals, it is hard to see its value. Slowly but surely, risk management drops in priority.
A lack of leadership for risk management is often another part of the problem. Less than half of surveyed executives reported having a designated senior staff member to manage risk. Given the increasing complexity of business threats and challenges, companies need dedicated managers to evaluate risks and develop solutions. Without risk management leadership, it falls on individual departments to handle hazards to their section. This results in multiple methods of managing risks with varying degrees of effectiveness.
It can be difficult for business executives to overhaul their risk management strategies. They may feel overwhelmed or unsure where to start making changes. The Reilly Company can help businesses navigate these necessary modifications. Contact us to learn more about how our risk management solutions can help advance your company.
Homeowners and business owners alike have concerns about water damage related to flooding. This is especially true if they live in an area prone to flooding. However, there are numerous myths circulating about flood insurance that add further confusion to this type of coverage. For example, many individuals think of flood damage as a total loss, but the average flood claim is around $30,000. Below are some of the most common myths about flood insurance.
Only People Living in a Flood Plain Can Buy Flood Insurance
While mortgage companies may require people who live in a flood zone to purchase flood insurance, these individuals are not the only ones who can buy this kind of coverage. Almost anybody who wants flood insurance can obtain a policy. In general, properties in flood zones are more expensive to insure than those that are not. Even renters can obtain flood insurance to protect their belongings.
Flood Insurance is Only Necessary for Properties in Flood-Prone Areas
While properties in flood plains need flood insurance, all buildings face a certain level of flooding risk. About 25 percent of flood claims come from individuals who do not live in a flood plain. Property owners should take a hard look at the risk of flooding in their area and investigate what flood insurance options are available to them.
Individuals with Homeowners Insurance Do Not Need Flood Insurance
This myth can cost homeowners big time in the event of a flood. Homeowners and umbrella policies do not cover damage related to floods. If an individual lives in an area prone to flooding, they should invest in flood insurance. The one exception to this rule is storm damage. If a storm tears off a portion of a house’s roof, homeowners insurance covers the subsequent water damage.
Learning about your flood risk and if you live in a flood plain are vital to determining if you need this type of insurance. These factors also affect how much coverage you will need. To learn more about flood insurance, contact The Reilly Company.
Theft is a growing problem for construction sites. From equipment to materials, construction businesses experience $1 billion in losses on a yearly basis. The issue extends beyond the physical loss of resources. Companies have to pay to rent or replace stolen equipment and tools, the associated costs with downtime while waiting for supplies, and a potential increase in insurance premiums for numerous claims all add up over time. Construction companies can mitigate much of their risk by taking the following steps.
Keep Job Sites Lit Even During Non-Work Hours
Proper lighting is a major deterrent for most would-be thieves. If they can get in and out without being seen, your job site is a prime target. Thieves are much less likely to strike if there is even the potential that someone is watching them.
Resupply on an As-Needed Basis
Having piles of supplies that workers will not need for weeks to come is a security risk. Thieves often scope out their targets ahead of time. They will make note of supplies that go untouched for long periods. This means businesses need to establish good lines of communication with their suppliers and project managers to avoid delays.
Invest in the Proper Construction Insurance
There are two types of insurance employers should consider when it comes to theft. The first is Builder’s Risk Insurance. This type of policy provides coverage for numerous issues, including theft. However, this does not include employee theft. If construction companies lack the manpower to oversee and remain in contact with all of their job sites on a regular basis, they should consider employee theft coverage.
While having these policies cannot undo the damage and delays caused by theft, it can help reduce the associated costs. The Reilly Company can help your construction company navigate the many types of insurance options available to you. To learn more about reducing your risk with construction insurance, contact us.
Small businesses face a variety of risks. To protect yours, it’s crucial to identify the risks specific to your organization, then develop a strategy for managing them. Below are some common risks small businesses face as well as how to attenuate them.
A data breach is much more than a violation of your and your customer’s privacy. Depending on what the hackers access, they could harm your business beyond recovery. Cybersecurity insurance has come a long way to keep up with modern cyber threats. Business owners should protect their company from on-site and remote cyber threats.
Business owners cannot predict when this type of risk will occur. Business interruptions are usually the result of a natural disaster or unforeseen events that force business owners to temporarily close or set up shop elsewhere. Business interruption insurance exists for these types of situations. Business interruption policies provide coverage for loss of income as well as expenses related to operating the business.
Businesses face a variety of potential lawsuits as part of their day-to-day operations. Some examples include slander or accidental injury. Following best practices can help reduce the likelihood of such a lawsuit, but it does not provide protection in the event of litigation. There are numerous types of liability insurance that provide coverage to reduce this risk.
Protecting your company is vital to remaining in business. Without the right insurance policies and appropriate coverage, it is easy for threats to overwhelm a company. The Reilly Company can help you decide which policies are best for your small business. We will help you identify risks to your company as well as develop strategies for managing them. To learn more, contact us.
In the early days of cybersecurity, IT professionals divided businesses into those that have been hacked and those that will be hacked. As technology improves and hackers hone their skills, this outlook has become bleaker. Now, IT security specialists view companies as those who know they have been hacked and those that do not.
While it is unlikely that every business in existence has experienced a data breach, the threat is real. Of the plethora of risks businesses face on a day-to-day basis, cyber incidents represent the third largest of them all. Victims are as varying as their attackers are. Large corporations, small businesses, non-profits, and even government organizations are prone to attacks. These cyber aggressors could be hacktivists for a specific social cause, individual attacks for fiscal gain, and more.
Protecting Against Cyberattacks
The situation is not as dire as many in cybersecurity make it seem. Businesses do not need to revert to non-technological forms of communication and data storage, but they do need to protect themselves. The easiest way to do that is with cybersecurity insurance. Unfortunately, many businesses neglect this type of insurance until it is too late.
The first step to managing cyber risk is acknowledging it requires attention and resources. If a business neglected cybersecurity in the past, they need to make it a priority now. This does not just mean preventing cyberattacks. Businesses also need to have a plan in place in the event of a successful breach.
Common Sense Measures
Beyond investing in cybersecurity insurance, businesses should also make sure they are engaging in best practices. Holding cybersecurity training for employees, discouraging sharing passwords, and changing passwords on a regular basis are simple measures employers can take to reduce the likelihood of a security breach. More often than not, hackers obtain their information from unsuspecting employees. If employees know the signs of a scam or suspicious email, they can take the appropriate steps to contain the threat.
Cybersecurity is a multifaceted issue that can be difficult for businesses to navigate. The Reilly Company can help your business understand what cyber protection policies are available to them as well as what type of coverage best suits their needs. To learn more, contact us.
The economic recession hit the hospitality industry just as it did other sectors, perhaps even more so. Many businesses did not want to invest funds in travel and individuals began reducing their vacations and leisure activities. However, as the economy recovered the amount of business and leisure travel increased as well. While an upsurge in travelers is good for business, it also poses risks that hotels and other lodging facilities need to address.
Customer privacy is a concern that dominates almost every industry. Without a base of reliable clientele, no business can survive. If cyberattacks continually compromise a business, they are unlikely to secure repeat customers. Hotels are popular targets for cyberattacks because they collect a large amount of information about their guests. A hotel may have the address, phone number, credit card number, and more private information about any given guest that is a data goldmine to a hacker. As digital and automated systems become more commonplace, the hospitality industry needs to be aware of new cybersecurity threats as well as methods to address them.
Without guests, the hospitality industry could not survive. Even so, visitors pose a litany of threats to profitability. Guests may sue a hotel due to an injury or they can cause extensive property damage. Establishing an internal system to deal with guest safety and destruction of property can help prevent incidents before they occur.
Knowing the risks that face your hospitality business is a crucial step to protecting your investment. The Reilly Company Group can help you address and reduce your risk to achieve your business goals. To learn more, contact us.
Risk exposure comes in many forms. The process of managing this risk begins with understanding which risks are most likely to jeopardize your business. Once the primary risks have been identified, it’s time to develop practices to combat them. Though it’s impossible to eliminate all potential risks, creating a risk management plan will help to make them much less likely and less punishing for your organization.
- Evaluate Your Risk – It’s never too early to evaluate potential risks. As you create your business plan for your new company you can assess, evaluate, and plan for risks in all aspects of your organization: production, marketing, human resources, and real estate.
- Acquire Liability Coverages – After you have completed your risk evaluation, you should determine the types of business insurance coverage you need to protect your company, including liability insurance.
- Develop Your Plan – Purchasing liability insurance isn’t the only aspect of managing risk. You should also create a risk management plan that lists each potential risk and outlines how your company intends to handle each risk.
- Implement the Plan – Part of your risk management plan should include training your employees about company risk management policies. This way if a risk should develop, employees can take steps right away to help mitigate the risk.
- Execute, Measure, Refine – Your company’s risk management plan, insurance coverage and employee training should be routinely evaluated and updated to make sure it is relevant to the company’s current needs and potential risks.
If your company doesn’t have a current risk management plan, or you believe your liability coverages may merit review, contact the experts at 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.