Construction Risk Advisor - October 2018

Preparing for Hurricane Season: 5 Tips for Contractors

The 2018 hurricane season is here, and it’s time for contractors to prepare for emergency weather situations that can not only disrupt current projects, but also hamper recovery efforts. Heavy rain and winds, surges in demand for labor and materials, and job site hazards in storm-damaged areas can create dangerous and expensive risks for contractors.

Minimize your risks during hurricane season with these five tips:

  1. Identify the potential for flooding. Take steps to prevent on-site flooding, including installing drainage systems, moving large equipment and waiting to install finished products until the building is watertight.
  2. Protect your cranes. Lower any cranes before weather events, if possible. Consult with the manufacturer or a professional engineer regarding how to best lower and secure cranes.
  3. Create an employee communications plan. Devise an action plan with a list of contact information and a log of on-site workers so you can account for everyone if a storm hits.
  4. Check your business continuity plan. Make sure employees understand their roles, and regularly review, update and test your continuity plan for business disruption.
  5. Review your insurance coverage. Work with your insurance carrier or broker to make sure your business is adequately protected.

Assess whether a project will be affected by hurricane season, and weigh the risks before agreeing to a contract. Consider whether or not you have enough qualified staff to handle the work post-storm, as well as the materials needed to complete the job, so you’re prepared in case of supply shortages.

Newsletter Provided by: Hierl's Property & Casualty Experts

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Construction Risk Advisor: September 2018

Industry Overspending $177 Billion Per Year

The average time construction professionals in the U.S. spend on avoidable issues like conflict resolution, rework and looking for project data costs the industry over $177 billion annually, according to a new report.

The participants surveyed for the report said they spend 65 percent of their time on “optimal” activities like communicating with stakeholders and optimizing resources that keep projects on track. They spend the remaining 35 percent of their time on “nonoptimal” tasks like hunting down project information, resolving conflicts and dealing with mistakes that require rework. That amounts to almost two full working days lost per person each week.

Some of the reasons for the nonoptimal costs include poor communication, constrained access to data, incorrect data and the lack of an easy way to share data with stakeholders. Another possible reason is that more than 80 percent of the survey’s respondents said they don’t use mobile devices to collaborate and access project data, despite the fact that mobile devices could help them work more efficiently.

Newsletter Provided by: Hierl's Property & Casualty Experts

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States Say Contractors Must Guarantee Wages

Maryland’s General Contractor Liability for Unpaid Wages Act becomes effective on Oct. 1, making private contractors for prime construction projects in the state financially responsible for unpaid wages of subcontractor employees. And unless the reason for nonpayment is related to a legitimate dispute, general contractors could be held responsible for up to three times the amount owed, plus attorney fees.

California and Oregon also enacted similar laws earlier this year. In California, general contractors are now liable for the unpaid wages of any employee who furnishes labor to or through them, plus unpaid benefits and interest.

Oregon’s wage protection law creates liability for the general contractor only if the worker’s subcontractor employer has not yet been paid in full.

Mitigating The Risk

In order to reduce the risk of general contractors having to pay their subcontractors’ employee wages, some industry experts are recommending that subcontractors provide their own payment bonds.

Opponents of the recent laws argue that it could be difficult for subcontractors on rocky financial ground to meet bond underwriting requirements. And since large projects could require several new bonds per job, overall project costs could increase significantly. Plus, if subcontractors don’t pay up, prime contractors will have to pay twice for the same labor.


Construction Risk Advisor - March 2018

SURVEILLANCE MUST-HAVES

Commercial construction sites are especially susceptible to risks like fire, water damage and theft. A good surveillance system is a vital risk mitigation tool. Look for the following must-haves when choosing a surveillance system for your construction site:

  • Full perimeter protection, fencing and property signage—These additions could make criminals think twice before committing theft or arson.
  • Video surveillance for live monitoring—This can allow for early detection of a problem and identify perpetrators of crimes. A system that offers live monitoring may be used to notify emergency services during off hours, reducing damage, business interruption and claims costs. Some insurance companies even require a surveillance system with live monitoring on-site.
  • High-quality cameras—Consider all-weather cameras with pan-tilt-zoom, day and night vision, power backup and two-way voice capabilities.
  • Minimized service interruption—Choose a surveillance company that can quickly repair or replace damaged equipment.

ADDRESSING OPIOID ABUSE

According to a 2017 study, construction workers are among the most susceptible to opioid abuse, second only to employees in the food service industry. When workers are under the influence of opioids, they put themselves, their co-workers and the general public at risk of serious injury.

Few construction company officials discuss the issue publicly, fearing negative publicity and the risk of higher insurance and workers’ compensation rates. However, it’s important for them to understand why opioids are a problem and take preventive measures.

Representatives from the construction industry believe the reason for excessive opioid abuse is that the aging workforce, combined with the fact that fewer young people are entering the industry, leads to older workers being expected to do more manual labor than they were in the past. Before the shortage of skilled labor, aging employees might have focused more on drawing and supervising instead of physically strenuous work. After injury, many aging workers turn to opioids to help them work through the pain.

If an employer notices a worker who might be struggling with opioid abuse, offering to help may not only prevent an accident on a job site, it can also prevent sizeable punitive damages. Some companies enforce a no-tolerance policy, and it is common for unions to offer some sort of rehabilitation program.

To prevent opioid abuse from happening to begin with, some companies issue rewards to employees for maintaining safe work environments. In return, firms with safe work histories have an opportunity to negotiate better premiums with their insurance carriers.

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