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Builders Risk vs. General Liability Insurance?

If you are in the construction business, there are some insurance policies you must carry to protect yourself. Workers’ Compensation Insurance and Commercial Auto and Truck Insurance are two examples. But there’s another lesser-known type of coverage that can be a lifesaver if a building you’re working on and/or your construction materials are damaged during construction: Builders Risk Insurance. You can purchase these policies for varying time frames, and coverage ends when the project is complete. Read more

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Why Do You Need to Hire a Licensed Contractor?

Why it is Vital to Hire a Licensed Contractor

When you need to hire a contractor to perform any sort of construction job, naturally you want to get the best deal possible. There are very important things to keep in mind, however, when shopping for the best company for the job. The single most vital of these is to be certain your contractor is licensed, bonded and certified. Unlicensed contractors are going to vie for your business by quoting you far lower prices than licensed ones, but you’ll pay the price in quality of work and risk. Here’s a look at why you want to hire a licensed contractor over an unlicensed contractor. Read more

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Understanding the Pros and Cons of Subcontracting

Weighing the Pros and Cons of Subcontracting

The construction and contracting industry is one of serious ups and downs. Business surges, then falls off sharply. Many businesses can’t afford to maintain a large enough staff for those busy times through the lean months. Rather than deal with constant hiring and layoffs, many contracting companies choose to maintain a solid basic staff while employing the services of subcontractors when they need to boost their efforts. As with any business decision, there are benefits and drawbacks to this approach. In this article, learn a bit about the pros and cons of subcontracting in the construction industry.

Productivity Boost

Using subcontractors can increase your productivity vastly. It allows you to have more hands on deck right when you need them, and usually a subcontractor is a specialist in their area of work, meaning they’ll add an extra expert point of view.

Pros and Cons of Subcontracting

Broad Access to Skills

Subcontracting allows you to diversify the skills you have on your crew. You can call upon exactly the people you need for the specific job at hand. This is especially useful for contractors who handle a wide range of jobs. You may only handle welding on occasion, for example, so when a job with this need comes up, you bring in an outside welder to help out.

Efficiency and Flexibility

Using an outside worker to handle occasional or specialized tasks allows you to maintain flexibility and efficiency in your operations. You’ve always got just the right person on board for the task at hand, and that person will be able to handle the task quickly and with precision. This makes you supremely adaptable, while still being able to provide quality service.

Tax Benefits

With a subcontractor, you’re hiring someone as a consultant or self-employed worker. This means you don’t have to pay employment taxes, which can save you a lot of money every year when the tax man comes knocking!

Communication Breakdown

On the down side, you will have to spend a lot more time and effort communicating with a subcontractor than with one of your in-house workers. There will be more questions, more follow-up on progress, more time being spent on educating them on policies and safety procedures.

Pros and Cons of Subcontracting

More Advance Planning

You will have to spend more time planning for your job. When you are using outside workers, you’ll have to take stock of who and what you’ll need for the job and put out a call for the temporary worker. You can’t just assign your guys to the job and go.

Quality Control

Most subcontractors provide expert work at a high level of efficiency, but there is always a risk, particularly when working with someone you’ve never dealt with before. Eventually you will build a pool of reliable and trustworthy consultants, but you may have to go through some rough relationships first. Your favored contractor may also not always be available for the job when you need them, forcing you to find someone else.

Despite the potential pitfalls, many construction companies work with subcontractors every day. You need to understand all of the pros and cons of subcontracting, make sure you have all the proper liability coverage for your business and decide if doing so is right for you.

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Are You Protected with Errors and Omissions Insurance?

Errors and Omissions Insurance

The right contractors’ insurance can mean the difference between an effective business and bankruptcy from liability concerns. No matter how safe your practices may be, no matter how careful you are to abide by OSHA standards, accidents happen on the job site. In fact, they happen all the time. It pays to have the right coverage available so that when the unthinkable occurs, you are covered. This includes errors and omissions insurance.

General Liability

General liability insurance should be carried by every business owner. It is, in fact, required by law. Its intended purpose is to protect you from unexpected injuries and accidents that happen on your business premises or as a result of you conducting business. When someone falls off of a ladder, has a car accident in your lot, falls through a wall on the job site, or even accuses you of slander, general liability kicks in.

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There are, however, situations in which general liability does not protect you. This is where errors and omissions insurance becomes so important.

Errors and Omissions

This kind of coverage applies when you employ independent contractors, consultants or advisors who make mistakes and cause you liability issues. If, for example, a consultant gives bad advice to a customer which ends up disastrous, the customer can come back and file suit for it. Having this kind of insurance coverage will protect against litigation and out of pocket settlements.

For example, if you had the option to remove a tree from a property and fail to do so, then the next week a storm knocks that tree over to damage a home, this form of coverage will greatly lessen your liability issues and defend you against the costs of litigation.

Not the Same

At a glance, it can look like general liability is the same thing as error coverage. While both cover you and reduce litigation costs in the case of unforeseen occurrences, this is where the similarity ends. Liability covers contractors whose employees have accidents, or who are faced with lawsuits from others being injured on the business premises or job site.

Errors and Omissions insurance, on the other hand, is specifically tailored to independent consultants, advisors and the like who provide advice and indirect support to job sites. If a worker falls off of a ladder, liability covers it. If a structure collapses because of an architectural defect, error coverage will be necessary. If falling debris hits a pedestrian, you’ll want liability. If a structure collapses because an advisor had you build it on uneven ground, you will need error coverage.

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Best Safety Practices for Offloading Construction Materials

Safety should be first on the minds of every contracting business. Standards are becoming more stringent and effective every day. Following these OSHA guidelines can not only protect your financial interests and reduce lawsuits, but can protect your workers from serious injury that can result in months or years of rehabilitation. Here’s a look at the best safety practices for offloading construction materials to protect your workers and business from accidents and liability.

Applying Best Safety Practices

The construction and contracting industries often overlook or neglect safety issues when it comes to loading and unloading construction materials. Unlike warehouses, where such processes are a large portion of day-to-day business, on the construction site they are a prelude or afterthought of the daily job and focus is on the use of materials rather than loading and unloading.

It’s important to shift perspective on this. Lumber bundles, windows, roof trusses and other materials weigh hundreds of pounds, and a lot of workplace injuries result from lack of safety procedures in handling them. The more your business pays attention to moving heavy materials, the better protected you and your workers will be.

best safety practices

Protecting Workers

Some of the best safety practices you can implement to protect your workers include the use of loading docks, specialized equipment such as forklifts and loaders and the proper training in their use, and thorough safety training and education for workers. Constant supervision and updates as well as following OSHA safety measures for such practices will save thousands in legal claims and damages.

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Understanding Risk

Workers need to be thoroughly educated and trained in the risks involved with heavy lifting and awkward materials. The best defense against accidents and injury is knowledge. Common workers comp claims in this area include strains, sprains, bruising and fractures from improper lifting, dropped or spilled materials and supplies that are not properly restrained.

Equipment Use

Knowing and respecting the limits of equipment use is vital to safety standards. Employees that are using heavy equipment such as forklifts need to be thoroughly and properly trained and certified. No worker who is not certified should be in the area of the equipment, and proper warning and signage should be posted. Equipment limits should be thoroughly observed according to manufacturer’s guidelines.

Make sure that building materials are always centered on the forklift and kept as far back as possible. The lowest position on the platform should be used while the equipment is moving and loads should be piled and cross-tiered as often as possible.

Never adopt a casual attitude towards moving building materials. The application of best safety practices is vital to mitigating safety risks and protecting both you and your workers from accidents, lawsuits and liability. In addition, make sure that you are carrying the proper contractors insurance policy for when incidents do occur.