Being a construction contractor gives you the opportunity to work in a field you enjoy, and own your own business. This has many rewards, especially considering this industry oftentimes does well in all types of economies. You can have a very lucrative and successful business as a construction contractor. However it also helps to educate yourself on the common risks of this type of business, and how best to reduce those risks. By taking care to protect your company from the more common risks, you can avoid potential struggle or bankruptcy as a result.
Construction Contractor Risks
You should first be aware of the more typical risks your business may be exposed to. These risks could be anything relating to your customers and clients, employees, business equipment, general liabilities, and the services you provide. Risks include changes in rules and regulations, not abiding by a legal service contract, damage to the client’s property, injuries to the clients while performing construction duties, bad weather affecting the schedule of your work, issues with your subcontractors or suppliers, safety on the site, lack of good workmanship, materials delivered late or running short, or equipment breaking down. All of these risks can be disastrous if you don’t take care of them properly.
Equipment, ranging from tractors and trucks to machinery and tools is a huge part of a construction contractor’s business. If any piece of equipment breaks down, you’re not able to keep up to your schedule; this may affect your contract and turn into a lawsuit if it causes you to take longer than expected. Perform regular maintenance on all of your equipment to avoid it from breaking down at inopportune times. Replace old equipment and tools when you get the chance, and have additional equipment breakdown insurance coverage so you can get them replaced as quickly as possible.
Keep Track of Regulations
In the construction industry, there are strict laws and regulations in place. These are to protect your business, contractors, clients and employees. Educate yourself on the regulations, and follow them exactly. The Occupational Safety and Health Administration (OSHA) will provide you with proper regulations, and even provide training to your staff it is needed. These regulations include safety regulations, recognizing chemical hazards, and preventing accidents.
Follow Risk Management Steps
To mitigate your risks, you should have a solid risk management process in place. The risk management process should include all the necessary steps, including analysis, control, transfer, review and refinement. Each of these steps is crucial in order to run a successful business while reducing your risks as much as possible.
Insure Your Business
The final step to minimizing risks of your construction business is with proper contractors insurance. Not all events can be prevented, therefore making it essential to have business insurance. Employees could get injured, an accident could cause a client’s injury, or damage to their home, without you being able to prevent it. Insurance policies like worker’s compensation, general liability, and property insurance will protect these types of risks.
As long as you follow OSHA’s safety rules and guidelines, have business insurance, and educate employees on proper procedures, you can minimize your risks drastically.