Maintain Risk Balancing Act to Reduce Liability

When you are in the business of building, you have to maintain a delicate balancing act at all times, harmonizing and prioritizing risks that are technical, logistical, financial, and even political in nature. As you work through all of these and other challenges, keep in mind that you also must address the issue of construction management liability – events for which your company may be found liable and forced to pay everything from reimbursements and damage awards to attorney and court costs, and so on. Let’s talk about some of these potential issues:

  • Building-associated risks-As a builder, you operate at the mercy of the seasons. Your workers won’t only sweat under the summer sun, they could suffer from heat prostration, sunstroke and third-degree sunburns when working out of doors all day long is the norm. Conversely, cold and rain present their own difficulties, and can even cause work to grind to a halt when inclement weather becomes extreme. Along the way, inconsistencies in resources can cause headaches and delays if the quality of your supplies varies substantially and you have to reject a batch of much-needed materials.
  • Financial risks-Delays in payment are the bane of every firm, and particularly in yours where you count on accounts receivable to in turn pay your employers and suppliers with little margin for error. Taxes and inflation are also an ongoing concern, eating away at your profit margin in small bites and at times, large gulps.
  • Technical risks-You need a roadmap to get to your destination–in this case, blueprints that provide specifics about how to complete the job. You take unnecessary and expensive detours when you labor under incomplete architectural designs, specifications that are imprecise and/or inappropriate, or a site investigation that proves to be lacking in thoroughness.
  • Logistical risks-Not having a reliable supply chain for the resources you need (everything from skilled labor to heavy-duty equipment, spare parts, tools, and fuel) exactly when you need it can result in expensive delays or additional costs if you are forced to purchase items from a higher-priced source or pay additional fees to rush items to your site.

Talk to a professional insurance agent about construction management liability insurance as well as advice on how to alleviate some of the risks associated with your business.