March 07, 2019

How to Protect Your Construction Company from Risk

If you've committed yourself to starting your own construction company, you have a lot to consider. Among other demands like distinguishing yourself from competitors and acquiring the right assets, you must protect your business from theft, penalties, and damage to equipment. Luckily, you can overcome obstacles if you take an organized approach to risk assessment. To help you get started, here are three types of risks that construction companies face and their solutions.

3 Types of Risk Your Construction Business Should Avoid:

1. Occupational Risks

Construction comes with occupational hazards that aren't always easy to avoid. When your team is operating heavy equipment and power tools on long, hot days, the probability of an accident will climb. Due to this, it’s important to take steps to improve worker safety on the construction site. When handling this type of problem, it's best to take the initiative with proactive measures rather than reactive measures. For example, you should make sure that equipment is secure and that your workers have received proper training. In addition, it’s imperative that you comply with OSHA standards on your job site. If you want to ensure that your workers are safe, the use of fall arrest systems, restraint systems, safety nets, covers, and guardrails are all excellent options. These precautions are a high priority, as falls consistently account for the greatest number of fatalities in the construction industry each year.

2. Financial Risks

As a business owner, you must manage your money with extreme caution. With the expenses associated with machinery, building supplies, and sudden setbacks, you'll need to closely follow a budget. One of the best ways to protect yourself is with an insurance policy. As you allocate your funds, invest in insurance policies and specialized protection. They have the potential to save your business in the event of an accident or other problem. Plans often include commercial auto, general liability, inland marine, property, workers' compensation, and excess liability coverage. Specialized protection includes coverage of replacement costs, which is critical if you’re investing in expensive equipment. The National Insurance Crime Bureau has found that an average of 600 to 1,200 pieces of commercial equipment are reported stolen each month. Appropriate insurance policies can help small construction companies bounce back from unfortunate setbacks rather than suffer from a lost investment.

3. Contractual Risks

When construction companies are unable to complete a project before a certain date, they may have to pay penalties. Even larger companies with an experienced crew and strong management have problems with productivity, and you could find yourself in a similar situation due to limited resources. You have several options for addressing these types of risks, and you'll find technology is often the best solution for improving productivity. Many construction companies are slow to adopt new technologies, so investing in them will lend you a competitive edge and help you meet contractual obligations. Consider tablets or smartphones with construction-specific apps for use on the jobsite, allowing for digital data entry from the field level. Transitioning your manual documentation of time and materials tickets to a digital alternative will also accelerate the process – another way to increase productivity with technology.

Grow Your Construction Company (While Keeping It Safe)

As your company matures, set aside time to assess occupational, financial, and contractual risks. The pressures of the construction industry are challenging to small business owners, but if you follow the suggestions above, you'll be able to grow your business. Just remember to research your options and proceed with confidence. Do you have tips for protecting a construction company from risk? If so, let us know in the comment section below!