Construction Insurance & Loss Control

Within the construction industry, plenty of risks are too common to ignore. While commercial insurance is essential to keep your business safe, there are also steps you can take to prevent loss.

This article delves into expert insights shared by Cory Eickholt, Director of Loss Control at Central Insurance, and Scott Zemberi, Director of Construction Underwriting at Central, regarding strategies for safeguarding your property, assets, and employees.

3 Key Types of Loss Control for Construction Companies

1.  Site Control

Site control on a construction project can involve implementing protocols to regulate who can enter and exit the site and what areas they can access. According to Eickholt, ensuring proper site control helps prevent unauthorized individuals from entering potentially hazardous areas and reduces the risk of theft or vandalism to the structure and/or building materials present. Adequate Site control primarily consists of:

• Securing the perimeter of active construction sites to prevent unauthorized access with fencing, gates, and walls.
• Designating areas with an appropriate clearance level which only allows authorized, trained individuals to enter.
• Verifying the identity of anyone entering designated areas with personnel or electronic systems.
• Placing warning signs around areas with unique hazards.
• Monitoring the property carefully with supervisor personnel or security cameras.
• Ensuring access points allow emergency vehicles and responders to enter the site in case of a fire or medical emergency.

“Proper site control is essential,” says Eickholt. “If there’s an active construction site or if there are risks from that job site present, it’s critical to limit public access to the site to help prevent someone from getting hurt”

Effective site control contributes to the safety of workers, protection of valuable equipment and materials, prevention of accidents, and adherence to regulatory requirements. By implementing site control on your construction site, you’re not only mitigating risks and ensuring safety but also contributing to the smooth progress of the project. You can keep your construction site safe with a well-planned site control strategy and continuous vigilance.

The Fatal Four: 60% of all construction fatalities are caused by falls, electrocutions, being struck by falling objects, and being caught in or between objects. These are known as the “fatal four” by the Occupational Safety and Health Administration. Site control minimizes these risks by preventing unauthorized, untrained individuals from entering dangerous work zones.

2.  Fire Control

Adherence to proper fire safety procedures is vital in areas involving electrical work or gas. Doing this can prevent potential disasters, such as explosions or fires within the structure. To enhance safety, implementing up-to-date smoke and fire detection systems is necessary, offering an early alert system for potential fire hazards. It’s also essential to have proper fire control tools like easily accessible fire extinguishers.

Additionally, ensure that evacuation routes are never obstructed, thoroughly inspect all electrical installations, and if smoking is allowed on job sites, ensure it is done in a designated area, away from structures with proper cigarette disposal containers present. General housekeeping within a facility can aid in fire control. Ensuring employees properly dispose of loose materials like soiled rags or trash can reduce fire load and tripping hazards.

Did You Know: From 2017 to 2021, local fire departments responded to an estimated average of 4,440 fires per year in structures under construction. Keep your construction site safe by taking the correct precautionary measures.

Hot Works Control

Sites with hot works programs require an additional layer of safety. Activities like torch cutting and welding on-site can pose unique challenges. Offer employees proper training that instructs them on careful control and removal of flammable materials. Eickholt emphasizes that a fire watch is also an important part of a proper hot work program in helping detect and control fires after work has been completed. 

3.  Keeping Employees Safe

Construction sites can pose incredible risks to your employees, so it taking the proper measures to keep everyone safe while at work is important. Proper site and fire control will aid in keeping employees safe; however, Eickholt highlights the importance of comprehensive employee training on equipment.

Training Employees to Prevent Loss

Eickholt emphasizes training to ensure all new hires are equipped with the knowledge to prioritize safety from the start. Maintain this knowledge by providing continuous education for existing employees to keep them up to date, particularly when transitioning to new roles or when operating a new tool or piece of equipment.

“When talking about equipment, you always want to make sure the employees are properly trained and using the proper personal protection equipment.” Eickholt says, “That’s critical no matter the type or size of equipment being utilized.”

Employee training can include:

• New employee orientation
• Situational response tactics for on-site accidents
• Proper accident reporting procedures
• First aid and medical treatment protocols
• Guidelines for handling personal injuries

Construction companies can cultivate a culture of responsibility among employees by prioritizing ongoing company-wide safety training through these measures. Remember to take all employee concerns seriously and allow an open communication strategy that supports communication between staff and management, minimizing risks and promoting a secure work environment.

Fleet Safety & CONSTRUCTION INSURANCE

Aside from proper training on vehicle use, fleet safety controls can serve as valuable tools to keep your drivers and vehicles safe. Telematics with cameras is invaluable for vehicle management, offering real-time tracking, driver behavior monitoring, maintenance alerts, fleet optimization, and accident investigation support.

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According to Eickholt, fleet vehicles and large construction equipment can often represent a significant risk management exposure to an organization. Emphasizing safety and security can help construction firms reduce the risk of theft and accidents. Consider doing the following to achieve this goal:

• Screen drivers carefully—build a reliable, safe team with strong hiring standards and a thorough screening process for anyone who drives on company business.
  Establish procedures—set clear and consistent expectations for what to do in case of an accident or unexpected breakdown. Information will be more accurate when collected from employees as soon as possible.
• Conduct Regular Inspections—commit to a routine schedule for vehicle inspection, repair, and maintenance to aid in reducing unexpected, costly breakdowns, and assist in avoiding accidents due to failing equipment.

Along with these tips, vigilance is key. Remain dedicated to keeping up these practices and check in regularly to ensure they are being followed at every level of employment. Read on to learn how insurance coverage can further safeguard your business.

What Construction Insurance is Right for My Company?

In addition to a Business Insurance Policy, here are some of the more popular insurance coverage types for construction companies to consider:

• Contractor’s General Liability—this coverage will protect you against lawsuits and financial liabilities that result from employee injury, property damage, personal injuries, and more that can happen on the job.
• Workers’ Compensation—this insurance coverage is mandatory for all businesses and protects you and your employees if they are injured or sick.
• Builder’s Risk Insurance—this insurance covers damages up to a set coverage limit.
• Owners and Contractor’s Protective Liability—this type of coverage is a protective liability policy, meaning a contractor usually purchases it to benefit another person or organization.
• Professional Liability Coverage—this type of coverage will cover the cost of a lawsuit due to work mistakes, negligence, and failure to deliver on contract agreements.
• Surety Bonds—these are heavily used by investors in construction projects to protect against monetary loss due to a contractor’s failure to complete the project.
• Inland Marine Insurance—depending on your location, inland marine insurance is a great option to protect you from flooding, windstorms, theft, etc.

“Water intrusion is something construction companies need to look out for,” emphasizes Zemberi, highlighting the vulnerability of construction sites, particularly in regions prone to hurricanes. With commercial property insurance, businesses can safeguard their assets against risks, including water-related damage from natural disasters like hurricanes or flooding.

Zemberi warns, “Construction sites could have particular susceptibility to hurricanes and things like that, so it’s likely they’ll have a lot of water-driven losses.”

Insuring Your Construction Company With Central

Central offers plenty of resources for construction companies to mitigate risks and prevent loss. Check out Central’s risk management platform, which provides manufacturing and construction businesses with a toolkit of resources such as safety videos, blogs, and bulletins.

Central also offers policyholders access to dedicated loss control specialists. “They can engage with our agents and our construction clients and help those contractors with training their employees,” Zemberi describes, including scoping out the job site for safety concerns or OSHA violations and providing support with training employees.

Reach out to your Central agent today to get started on an individualized loss control program to keep your company secure.