- Get adequate insurance coverage to protect against accidents, property damage, and lawsuits.
- Ensure your contracts are well-drafted with the help of a reputable construction lawyer.
- Implement strict safety protocols to reduce the risk of accidents and get safety certifications such as OSHA’s Voluntary Protection Programs (VPP)
- Choose reliable subcontractors after conducting thorough background checks
- Keep accurate and detailed records of all business transactions and communications.
General contractors are responsible for running a successful and profitable business. However, they face various risks that can threaten their financial stability and reputation. That’s why taking proactive measures to protect their businesses is essential.
This blog post will share some business protection tips for general contractors. These tips will help you identify and mitigate potential risks and ensure the success of your business.
Get adequate insurance coverage
Running a construction business comes with many risks, and one of the most important aspects of protecting your investment is getting adequate insurance coverage. Accidents, damage to property, and lawsuits are all potential risks in this industry, and without proper insurance, any one of them could result in significant financial loss. Here are the different insurance policies construction businesses should have and why they’re essential.
1. General Liability Insurance
General liability insurance is typically considered the foundation of any insurance coverage for a construction business. This type of policy covers any accidents or injuries that happen on the job site, as well as any property damage. It protects your business in case of lawsuits brought by third parties alleging bodily injury or property damage caused by your business operations.
2. Worker’s Compensation Insurance
Worker’s Compensation insurance is another “standard” policy for construction businesses that offer coverage for medical cost and lost wages due to work-related injury or illness to the employees. This policy protects employers from lawsuits by employees who get injured while on the job.
3. Commercial Auto Insurance
If your business involves the use of vehicles, commercial auto insurance is an essential policy because it covers the company-owned vehicle and the employees who drive it. Commercial auto insurance also provides property damage liability coverage for vehicles your business doesn’t own.
4. Professional Liability Insurance
Professional liability insurance, or Errors and Omissions insurance, is essential when providing professional advice to clients or design and architect services. In construction projects, having Professional Liability insurance is considered a staple for construction companies because it protects them against lawsuits related to professional errors, bad advice, or faulty design services.
Ensure your contracts are well-drafted
One of the most crucial steps in safeguarding yourself is ensuring your contracts are well-drafted. Clear and concise language in your contracts can prevent misunderstandings and disputes that may later arise.
As such, consulting a reputable construction law attorney can ensure that your contracts meet legal standards and that all legal clauses are included. Having the guidance of a professional will provide you with peace of mind and ensure that your arrangements are robust and able to withstand any future legal challenges. The investment in a well-drafted contract now may save you significant time, money, and stress in the future.
Implement strict safety protocols
Safety is a top priority for construction projects. Implement strict safety protocols to ensure your employees and subcontractors are safe while on the job. Conduct regular safety training sessions and provide vital personal protective equipment. A comprehensive safety plan will reduce the risk of accidents and ensure your work is safe and secure.
You can also take advantage of safety certifications, such as OSHA’s Voluntary Protection Programs (VPP), which can help you demonstrate your commitment to safety and protect your business from potential liability.
Choose reliable subcontractors
Subcontractors are essential in the construction industry. They help complete projects quickly and efficiently. However, choosing unreliable subcontractors can damage the reputation of your business. Always conduct thorough background checks on subcontractors to ensure they have the qualifications, experience, and insurance coverage. This will help you avoid costly delays, mistakes, and legal issues.
Keep accurate and detailed records
Accurate record-keeping is crucial for the success of your business. Keep detailed records of all your transactions, contracts, and communication with clients and subcontractors. This will help you detect and resolve potential issues, including billing issues and disputes. Keep all your records in one place, so you can easily access them whenever needed.
The Bottom Line
Protecting your business is critical to ensure long-term financial stability and success. As a general contractor, you may face various risks threatening your business’s health and reputation. However, by implementing these business protection tips, you can mitigate potential risks and ensure the success of your business.
Adequate insurance coverage, strict safety protocols, well-drafted contracts, reliable subcontractors, and accurate record-keeping are among the best practices for general contractors to protect their businesses. Remember, taking proactive steps to protect your business will keep it running for years.