The current construction insurance market is facing many challenges in relation to safety, workers' compensation and general liability. Coverage issues related to general liability claims, indemnification and additional insured status, as well as third-party, over-suits' exposure from accidents, continue to create challenges for all construction contractors. Construction general contractor safety professionals must obtain a level of understanding of the impact these various forces have on the contractors in order to enhance their job performance and establish a hedge of protection for their company. This session will provide the perspective on roles, relationships, technical issues, resource allocation, and commitment pertaining specifically to trust and reliability from the perspective of the three primary relationship partners-the broker, the carrier and the general contractor.
To maintain proper insurance in today's volatile market, the general contractor must understand the overall impact on business and bottom line and how insurance can impact the success or demise of a company. The general contractor must accept that, to procure and maintain proper insurance coverage, they must have an understanding of the insurance market and how their individual history related to claims and business operations has a direct impact on their premiums and bonding capacity. If a general contractor cannot procure and maintain insurance at a competitive rate, they will not get work from the owners. Components, such as safety and quality processes, understanding of the current insurance marketplace, and effective claims management techniques, are all critical to the general contractor business success.
Knowing oneself is critical in defining who a general contractor is and the type of relationship they want to forge with the carrier and agent. "Who we are?" may be a difficult question to answer, depending on the make up of the contractor and the perceptions related to safety and insurance. In some cases, a company's top management perspective of what the company stands for may be quite different from the field perspective. The safety professional may be able to tap into resources through their broker and carrier relationship in order to determine the true corporate culture, as perceived by various levels of management. For example, participation in a corporate analysis that measures current safety performance and perceptions may be a cost-effective way to document deficiencies in a safety process, while identifying the true corporate philosophy toward safety. In doing so, the general contractor can identify challenges to their safety process and implement specific target solutions for improvement in deficient areas.
Some general contractors choose to shop for insurance industry partnerships each year. While this may lead to a slightly lower premium coming off of a good year, this practice may put the contractor at risk later down the line when the going gets rough. General contractors that shop each year are missing an opportunity to foster a relationship that will withstand the market vulnerabilities and fluctuations and place the general contractor in a better position when the insurance market hardens or if they experience a catastrophic loss.