As the construction industry booms, contractors face evolving risks that, left unchecked, can leave their operation exposed to new liabilities.
If you already operate a construction firm, you know that there is a labor shortage that has made it difficult to find experienced workers, and that hiring entities are asking builders to take on more of the design function, as well.
Your liability picture has also likely changed with the increasing use of wrap-ups and, if you’re using technology in your operation, you now have rising cyber-security risks, too.
Lack of qualified workers
The bottom fell out of the construction industry in the U.S. during the first few months of the COVID-19 pandemic, and many worksites were idled. Now that the industry has found its footing, it’s been dealing with a severe labor shortage.
As construction firms struggle to find workers, the ones who are on the job are having to take on larger workloads, which can put them at risk of injury or making mistakes.
Also, many contractors are having to take on younger, less-seasoned laborers, who may lack the experience to identify and avoid hazards, which puts them and others at risk of injury.
A lack of workers coupled with inexperienced new ones on sites, can also end up drawing out projects, forcing contractors to miss deadlines.
Professional liability risks
As more project owners want an all-in-one job with the lead contractor designing and building the project, contractors now face a new type of risk: professional liability.
But the typical contractor’s insurance policy doesn’t provide protection for any design work you take on. Courts have ruled that:
Designers who perform “builder activities” lose limitation of liability typically enjoyed by design professionals.
Builders who perform “design activities” assume responsibility for design deficiencies.
Wrap-ups more prevalent
Many construction projects are now covered under one general liability policy to cover the work of the general contractor, as well as of all the subs. More lenders are requiring that liability is set up in one all-encompassing policy.
A properly assembled general liability wrap-up should provide coverage not only during the construction period, but also up to 10 years after the work is completed.
These policies often reduce the cost of coverage.
More cyber-security risks
Like all industries, the construction sector has grown increasingly reliant on technology to get the job done. That exposes contractors to a variety of cyber risks, including keeping project designs, client records and employee records confidential.
Many building contracts today include clauses requiring the contractor to be responsible for potential cyber breaches.
Given the increasing popularity of practices such as “building information modeling,” “integrated project delivery,” and file-sharing between participants in a construction project, contractors may be at increased risk of liability in the event of a data breach.
BGES Group, located in Larchmont, N.Y. are New York Construction Insurance Specialists that represent 50+ companies and all the BEST general & umbrella liability programs! We offer every coverage you need including property, builders risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability and group health. We are extremely responsive, responsible, trustworthy, fast, minimize your insurance headaches, we don’t charge ridiculous policy or service fees and when you call, text or email, whatever time of day, even weekends, we are ARE THERE to help YOU!
BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being cancelled, losses causing difficulty getting coverage, in the middle of an audit dispute, payrolls misclassified, whatever your issue, we can help! We have special programs for: Auto Service, Contractors (especially New York), Limousine Services, Logistic Companies, Manufacturers, Recyclers, Truckers, we can help ANY tri-state business owner. We are considered “Preferred Agents” for this one program that if we can get you in, their pricing is excellent, offers long-term coverage stability and can cover multi-state operations. Program takes the hassle out of doing annual audits too.
In addition, we offer all personal insurance coverages including home, auto, boat, jewelry, fine arts, life, disability, health and long-term care. When was the last time you got a complete check up for all your coverage needs? We are extremely caring and would love the chance to help you with your personal insurance needs.
BGES Group is an insurance agency whose owner is very responsible, responsive, offers boutique, very personal service and is ALWAYS there when you need him most!
We know reading an article we post or getting an email is not the best way to consider working with someone. If you are interested, go read our “Google Reviews” and see what people have to say about us! That can give you the comfort level needed to contact us.
If you would like to speak with us call Gary Wallach at 914-806-5853 or click here to email or click here to visit our website.
Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538
© – Copyright – 2023 – BGES Group
The engineer talks to the contractor to supervise and plan the work.
A street of partially finished new homes in a new suburban housing development in Spokane, Washington, USA.