Coronavirus has highlighted that unforeseen perils can derail a building project. It is a good opportunity to evaluate your risk exposure. Contractor General Liability Insurance protects your project from the impact of a lawsuit. It is an example of transferring risk to another party and is just one of the strategies you can use to manage the risks that your project faces.
Risks in construction
A building site has many safety hazards. There is uneven footing, the threat of falls, the possibility of electrocution, the danger of being crushed. Apart from safety concerns, there are many unknowns, such as the condition of the site. A project can also face shortages of labor and supplies. There is also the threat of vandalism and theft, bad weather, natural disasters, acts of terrorism, and changes in the law.
Responses to risk
In Risk Management, you can choose from four types of response:
Buying Contractor General Liability Insurance is an example of the response ‘transferral’. In this instance, you transfer the risk that your company will have to pay costs in the event you are sued for negligence. Your company may not be able to afford the costs. You could be forced to close down. This insurance applies to liability claims of causing bodily injury to another, damage to property, reputation damage, and advertising mistakes.
You can choose to take action to avoid a risk. For example, if the design for your project uses a particular material that is in short supply. You could change this material so that it no longer poses a risk.
This response seeks to reduce the probability of a risk happening or reducing the impact that it will have if it does happen.
You may choose to accept some risks, allowing you to establish a contingency plan. You’ll implement it only if the threat materializes. It could also be that you agree you will decide what to do if and when it happens. An example of this could be a natural disaster.
How does a risk management strategy help?
The example of transferring risk by purchasing Contractor General Liability Insurance is a helpful one. It demonstrates that you can put something in place to protect your business in the event of an accident. It is essential to practice proper safety and sound management on a construction site, but it is impossible to control everything.
Contractor General Liability Insurance can assist your business
Insurance is one of the ways you can protect your business from unforeseen events. At Farmer Brown insurance company, we specialize in coverage for the construction industry. We can assist you with an insurance solution for your company at a price you can afford. Call Farmer Brown Insurance on (888) 973-0016