Written by: Lisa Bracero, CPCU, AFIS, CRISAs construction firms reflect on their 2018 results and how to make 2019 even better, here are three pillars to keep in mind.
Uniting the team behind the company’s vision generates energy and pulls everyone in the same direction. How can you share the vision and expectations with your team?
Communicate with crystal clarity and involve your people in the process
• What do you want to accomplish?
• How will the vision be achieved?
• What incremental results will be measured?
• What are the rules and guideposts for the path?
Everyone wants their employees to return home as healthy as when they arrived. Employee safety is key, and it’s especially important in the high hazard construction industry. In addition to impacting the individual, the team and the family, construction injuries can delay project completion and challenge the firm’s profitability. Higher Workers’ Comp insurance rates are just one impact to the bottom line.
Bolster the effectiveness of your Injury and Illness Prevention Program (IIPP)
• Involve every level of the organization in your safety culture
• Identify, assess and address hazards as they evolve
• Thoroughly train all staff, from leadership to managers and field personnel
• Talk with your insurance professional about specialists and resources available to help you
3. Asset protection
While 2018 was a strong year for the economy overall, there were areas of weakness and headwinds are emerging. For lasting success, it is important to develop a laser-like focus not only on your top line revenue but also on the risks to the bottom line. Consider the profiles of your more profitable projects and your best clients. How can you target and attract more of your ideal work? Also, what asset risks do you face and how can you mitigate them?
Protect your profitability by protecting your bottom line
In the prior section, we talked about preventing employee injuries and Workers’ Compensation insurance. What other risks do you face?
• Physical Property
Are your tangible assets adequately protected against risk of loss through your Commercial Property insurance policy? If a fire or other cause of loss damaged your building, your computers, equipment or inventory, could you rebuild or replace them with the insurance coverage you have today?
• Premises and Products / Completed Operations Liability
Are your operations appropriately covered by your General Liability policy? Are you aware of the exclusions in your insurance policy and do you have processes in place to identify and avoid those problematic operations? As an example, a too common scenario is a contractor with a residential exclusion/limitation works on a job that they didn’t consider residential but is defined as such according to the insurance policy. If you’re not familiar with the exclusions in your policy, now is a good time to review them with your insurance broker.
• Business Auto
What if your employee is driving their own vehicle on behalf of your business? What if they rent a vehicle for the business? Do you know the coverage provided by your policy?
• Large Losses
When you review your organization – assets, revenue, operations, completed operations and risks associated with equipment and vehicles – do you have adequate Excess Liability coverage for potentially catastrophic accidents or losses?
• Management Liability
This encompasses a broad and growing category of management risks including Employment Practices Liability, Fiduciary Liability, Directors and Officers Liability, and Cyber Liability. To dive deeper into just one of these hot topics, consider the number of data breach notifications you have personally received in the past couple of years. Those letters were sent in compliance with privacy laws and at significant cost. Also, many of us know businesses, even small to medium sized local companies, that have been recent victims of Ransomware. This is in additional to the “usual suspects” of IT or cyber losses that occur with frequency.
There are a number of insurance solutions available to bolster your company with the expertise it needs in the time of a loss and the financial resources to respond. A trusted and knowledgeable insurance professional can help you review your operations, exposures, risks and current options. In an increasingly dynamic world, it’s worth having a deeper conversation on the state of your asset protection.
For 2019 and beyond, may your communication unite your team, your people execute safely, and your assets be protected as you continue to build your construction company and your community.