Top Risks for Small Construction Businesses
The construction industry is rife with entrepreneurs and small businesses. The allure of being your own boss, creating dream homes, and building beautiful architecture is undeniable. However, the industry itself poses several risks that can jeopardize an entire operation if not managed appropriately. Below are the most prevalent risks threatening construction businesses.
For the construction industry, there are only two seasons: winter and construction. Once the weather begins to turn, construction contracts slow to a trickle. This is because everything becomes harder and more hazardous in wintry conditions. Frozen soil is harder to penetrate, snow conceals dropped tools, and freezing winds make scaffolding work unpleasant and dangerous. Even for businesses in warmer climes, an economic downturn can result in a dearth of contracts. Construction companies have to prepare for the slow season by setting aside earnings from the busy season to help compensate for the decrease in income.
Even with proper safety precautions, accidents can still occur on construction sites. While construction workers are the most likely to be injured, third parties can be as well (such as clients visiting work sites). When accidents happen, the injured party can hold the construction company liable for medical costs and court expenses. To help mitigate these issues, business owners should invest in Worker’s Compensation Insurance as well as General Liability Insurance. In fact, many states require it as a prerequisite to own and operate a construction company.
Construction professionals cannot work without the right tools and equipment. While some tools are easy to replace, others take time and money. This can delay projects and harm a construction company’s reputation. Investing in Property Insurance can help alleviate the cost, but it is best to prevent damages in the first place. Business owners can ensure this by training workers on the proper use, maintenance, and storage of equipment.
Protecting Your Investment
Starting and operating a successful business is the ultimate goal for entrepreneurs. However, without proper risk management, a construction company can quickly fall into ruin. The Reilly Company can help your business manage construction risks with the proper insurance policies and coverages. To learn more, contact us today.