Large, global construction firms have attorneys on retainer, but they also have the best insurance coverage possible. If you’re a small contractor or subcontractor company, one liability lawsuit can throw your construction business under the bus.
6 Things You Should Know About Construction Business Insurance
You don’t want to pay more for insurance than you have to. What you want is to be able to insurance-shop and gain a knowledgeable perspective. Even if your best friend is an insurance professional, “shop around,” says biBERK chief operating officer Rakesh Gupta.
You can save more money if you can bundle insurance policies. This is also more convenient because you have a one-stop-shop for your construction business insurance.
2. Check Subcontractors’ Insurance
File proof of subcontractor insurance before they start the job.
3. Commercial Auto Insurance
Your cousin needs a job, but she’s had several fender-benders. Your construction business pays more for bad drivers. Good drivers make good employees for many reasons, not the least of which is you’ll pay lower auto insurance.
4. Pay Higher Deductibles
The higher your deductibles, the lower your premiums. But always have your deductible amount set aside for that rainy day when a claim is filed. Gupta says choosing a higher deductible and “hoping for the best” can have serious financial consequences for your construction business.
5. Promote Safety
X-MOD is used to calculate your insurance rates. Make safety a priority in the workplace. Promote injury-free days. Actively setting and promoting safety standards can give you a better X-MOD (experience modification) ratio.
6. Workers’ Comp
How this insurance is priced is based on classification codes. The classification codes tell insurance companies the risk level for that worker. You don’t need office workers in the same classification as an onsite employee. However, that frequently occurs, and when it does, a construction business pays more for insurance than necessary.
Use Available Information To Better-Manage Your Business
Finally, make a point to review your insurance coverage annually. You’ve bought more equipment, hired more, laid off more. Construction business changes are a fact of life. You may need to reduce or increase your coverage, but you won’t know if you don’t look.
Many things have happened within the construction business industry that were beyond your control. But you can control your insurance costs if you’re involved. It’s worth your time.
You also have complete control of business development and marketing plans. Construction Monitor data analyses are worth your time, too. Contact us for more information.