The average person might be surprised by how many risks confront construction businesses. We’re here to help you identify and manage them.
Safety hazards and workplace accidents are just one type of risk for construction companies. There are more, including:
Construction has the third highest fatality rate of Australian industries – three in 100,000 workers, says Safe Work Australia.
Part of the problem is companies operate with lean teams, and there’s a skills shortage.
Government investment in infrastructure is expected to double in coming years, but this could be undermined by a huge skills shortage. Infrastructure Australia predicts a shortfall of 70,000 scientists and engineers, 19,000 project management professionals and 28,000 trades and labour workers at the peak of demand.
For construction contracts, standard forms are the norm – check your state’s relevant Act. Contract variations are expected. Poorly drafted terms can undo a supposedly valid agreement. Check the fine print with your lawyer. Ensure you understand the timelines, completion dates, extension, and delay clauses plus options. Think what if, what happens when, how should, and who might.
Meanwhile, theft and vandalism at building sites continue to plague the sector. Supply chain disruptions have resulted in equipment shortages and dramatic price hikes. These pressures have given rise to an increase in theft from construction sites.
Whether you’ve had to replace stolen building material or not, you can count on prices being unpredictable. It’s a major reason for cost overruns in projects.
You prioritise risk assessments for your business – you do them periodically or whenever your environment changes, complimented by daily on-site inspections before work commences. Dig deeper, get more comprehensive when you’re doing a risk assessment on your own company to boost your risk-based mitigation action plan.
Awareness of your risks is a step in the right direction.
As a self-employed contractor, the range of insurance options available might seem overwhelming. Usually, you’ll need public and product liability, income protection, contractual liability, and even tool insurance.
Public liability insurance will be a must for many contracts you sign, although the amount of minimum cover stipulated can vary from $5M to $20M. Your head contractor’s insurance may not cover you. Your policy should protect your liabilities for your actions, such as negligence, which could cause property damage or personal injury to a third party.
Protecting your income is vital especially if you are self-employed. Income protection insurance may be appropriate because you won’t usually be entitled to workers’ compensation or sick leave.
Contractual liability insurance gives you a stronger footing should the fine print on the contract shift unexpected responsibilities to you. That includes making you responsible for all incidents while you’re on-site, not just those due to your negligence. Contractual liability insurance protects you and your business when there’s a claim that makes you liable thanks to the contract, not because of your negligence.
Tool insurance covers you for theft of your tools of trade or if they’re damaged by fire or through a vehicle collision. This cover might give you peace of mind when you’re on site. However, it’s only if your policy offers ‘open-air cover’ that you’d be covered for tools stolen from a worksite when they haven’t been locked away, such as in a tool chest.
They’re just a few insurance options you have to help you manage the risks of your construction business. They’re your foundation to build a successful business. This can be a complex area but we can customise a suite of insurance policies to match your needs.
Article supplied by OneAffiniti
Photo by Jeriden Villegas on Unsplash
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