Fleet
A significant risk for contractors relates to vehicle accidents. Construction workers typically spend more time in vehicles than other workers because they regularly move between job sites and use vehicles to obtain supplies. Construction work often entails physically demanding work in less than comfortable environments over long hours, resulting in fatigued drivers behind the wheel. Often contractors allow their staff to take vehicles home at night and weekends. This increases accident exposure, particularly if a spouse or child is allowed to drive or are passengers in the company vehicle. Contractors often expect employees to use their own vehicles for business. Accidents occurring in their own vehicle while working creates liability exposure to the organization. Additionally, if you use subcontractors or sub-haulers, you also could be liable for their losses, especially if they do not have adequate insurance. Operating a vehicle, or combination of vehicle and trailer, over 10,000 lbs. GVW requires compliance with the Federal Motor Carrier Safety Regulations in many states or if crossing state lines. Failure to manage your fleet exposure can leave you open to serious workers compensation and liability losses.
General Liability and Product Liability
Contractors and specialty trades are typically confronted with numerous liability exposures. Slips, trips and falls from the same level and falls from heights, damage to the property of customers and falling objects that could put people and property in harms way are common concerns. Liability to owners of property or to those in the “zone of danger” during or after an installation project, and a range of potential liability related to subcontracted work are also concerns. Product liability may be a less typical and potentially neglected exposure if you sell, service, repair or fabricate products or parts. To effectively manage your liability risk, you need to understand your exposures, keep accurate records and respond promptly to non-employee incidents and accidents. This section is dedicated to helping you get started by providing an overview of your general and product liability exposures and controls.
General Liability and Product Liability Loss Leaders
- Slips, trips and falls
- Struck by or against an object – non-employee
- Damage to personal property of others
Property
The exposure to property loss for contractors and subcontractors can vary, particularly at the trade level. For instance, some trades have special exposures. Cabinet makers and carpentry shops may have potential fire exposures presented by wood, saw dust and shavings, as all these burn readily. Welders also have potential fire exposures related to hot work and the welding process. Potential for property loss also varies with where you are based: a multi-tenant commercial building, a contractor’s yard or an owned commercial building. Tools, equipment and other supplies you may store in a shed, garage or work area/yard are an exposure, as well as the shed and garage. Lightly constructed equipment and material sheds may be damaged by wind and other adverse weather. Poorly supported erected walls, particularly during idle construction periods, also can be damaged by adverse weather and/or wind and subject to collapse. Cutting oils, fuel for power tools and equipment, poor wiring, including short circuits in electrical equipment, poor machinery and the use of space heaters that can tip over and ignite combustible materials can all play a role in fire. Vandalism and malicious mischief are additional exposures.
Property Loss Leaders
- Fire
- Windstorm
- Water damage
Workers’ Compensation
Construction is considered one of the most hazardous industries. It has the third highest rate of occupational fatality. Leading causes of death and injury among construction workers are falls from elevations (scaffolds and ladders), being struck by a vehicle — both on the job site and around work zones, electrocution from contact with overhead power lines or underground utility lines and being struck by falling objects. Additional stressors include noise, vibration, heavy lifting and walking on irregular surfaces. Non-routine stressors may include exposure to heat and contact with various bacteria and fungi, which can result in diseases such as Histoplasmosis, Valley Fever and Lyme disease. Special trades also may have unique exposures that include airborne contaminants, including, but not limited to, arsenic, cadmium, wood dust, asbestos, lead and silica.
Workers’ Compensation Loss Leaders
- Slips, trips and falls
- Strains and sprains
- Falls from elevations
- Struck by, or against, an object resulting in death or serious injury
- Cuts, lacerations and bruises
Construction Surety
Many contractors end up going out of business each year. Not necessarily because of the quality of their work, but because they had unfavorable contract clauses that pushed them into bankruptcy. A well-written contract can help reduce or eliminate liability exposures on projects and may even determine whether the job is profitable. Poorly worded clauses, especially about changing site conditions, accelerating work or addressing underlying contractual obligations (such as project scope) may lead to claims that can quickly erode profit margins.
Source: Travelers Insurance Company