Are you a super savvy, risk reducing master on the jobsite? Take this short true or false quiz to find out just how safe and protected your business is.
Business Risk Management
True or False? I can start my contracting business without being licensed and insured.
False: In certain states such as California, you must be “duly licensed” by the Contractors State License Board. If you are doing business in California, you are also legally required to disclose to your client whether or not you carry general liability insurance. While states all have different licensing and insurance requirements, being licensed and insured is the best way to improve your chances of getting work, and protect your assets once you have started on a project.
True or False? I only need to be bonded for public projects.
False: Bonding not only gives you the ability to bid on public projects; more and more private projects are requesting bonded contractors and subcontractors, as well. If you are not bonded, you could miss out on lucrative private projects. Bonding will give you the competitive edge over non-bonded competition, and provide access to more work.
True or False? A construction contract completely protects me from liabilities and lawsuits.
False: A contract is an extremely useful tool for protecting you and your business and reducing liability risks, but only when it contains the right clauses and conditions.
Especially if you are just starting out in the construction industry, it’s smart to have a legal professional experienced with construction contracts guide you through the process.
True or False? A legal judgement against my business may affect my business and personal assets.
True: Your personal assets can be at risk in the event a judgement is made against your business. Imagine as scenario where you are involved in a lawsuit and a judgement for $1M is awarded against your business. If your insurance coverage limits max out at $500,000, your business will be responsible for the remaining $500,000. If you do not have the assets available in your business, your home and other personal assets may be at risk, depending on how your company was set up and whether or not it is incorporated.
Safety Risk Management
True or False? It is the responsibility of the project owner to keep the project site safe.
False: According to OSHA Safety and Health Regulations for Construction, it is the responsibility of the employer to initiate and maintain such programs for accident prevention.
“No contractor or subcontractor for any part of the contract work shall require any laborer or mechanic employed in the performance of the contract to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous to his health or safety.”
Bottom line: it is your responsibility to provide a safe work environment for your employees. You write the checks, you keep them safe.
True or False? One in every five private industry worker deaths occurs on a construction site.
True: It is an unfortunate fact that 20% of workplace deaths happen within the construction industry. According to OSHA, the leading causes of worker deaths on a construction site are:
- Struck by object
- Caught in/between
These “Fatal Four” causes should get your complete attention and concern on a job site. Incidentally, fall protection is the #1 most cited OSHA violation on construction sites, as well.
True or False? If an employee is hurt on the job, workers' comp will help them with medical and other expenses.
True: Carrying workers' comp insurance will protect you and help your employees in the event of a workplace injury. Workers' comp will help provide for medical and recovery expenses for your employee. This reduces the risk that an employee will try to get reimbursed for such expenses directly from you, and may even cover your legal fees should such an event occur.
Project Risk Management
True or False? My general liability insurance covers the project property during construction.
False: Course of Construction Insurance, sometimes known as Builders Risk, is the only way to reduce risk and protect property during construction. This type of insurance prevents you having to come out of pocket for repairs/replacements if burglary, theft, vandalism, fire, flood, or some other unforeseen event should damage the property and your materials during the course of construction.
True or False? My commercial auto policy protects my tools and equipment on the way to job sites.
False: Commercial auto insurance will protect your vehicles and cover your assets if you or an employee get into an accident while on the job, but your tools and equipment are not covered under this policy. The only way to protect your tools and equipment on the road is to carry tools and equipment insurance (also known as inland marine).
How did you do? Are you a construction risk management master-of-all-trades?
Or do you need to draw up some blueprints on how to reduce your risks on and off your project sites?
Managing construction risks is an important part protecting your employees, your assets, and the future of your business.