The Safety Corner: Mitigating Risk in Construction

A builder’s risk policy covers various projects, offering standard coverages and optional endorsements to tailor coverage for residential or commercial course of construction projects. It can cover property damage, theft, vandalism, arson, fire, lightning, collapse, wind and hail, and debris removal. It can also provide coverage for materials and supplies in transit that will later become part of a covered building or structure. With an endorsement, some policies can even cover earthquake and flood perils.

Government regulations or banking or contractual arrangements often require a builder’s risk insurance policy. Most coverage is purchased before or at the start of construction, allowing owners to build that cost into the project bid. In many instances, time is of the essence. It is important to work with a commercial insurance broker early and regularly to ensure access to the best insurance markets, coverages, and prices.

Plan for Exposures

A good risk management plan should assess all possible exposures for the project, both tangible and intangible. Tangible risks include building materials, completed sections of the structure, and supplies for each phase. Intangible risks include cost overruns, delays, changes in market conditions, and emergency action plans.

Protecting the construction site is the top priority. While properly installed and maintained jobsite fencing and lighting are essential, they may not be sufficient, depending on the project location. Limiting entry points, implementing visitor check-in and walk-through safety procedures, and training all onsite personnel are highly recommended. Access controls, including badging and identification, help reduce liability risks and increase overall site safety.

Roving security involves conducting patrols throughout a security shift, with officers patrolling on foot, in a vehicle, or a combination of both. The goal is to prevent crime by identifying potential threats and intervening quickly to prevent damage or harm, which will reduce risks such as arson, vandalism, and theft. Patrols can also help to discover early-stage fires and alert authorities for a faster response time.

Fixed-unit security systems are also commonly used on jobsites. These all-in-one trailers provide video, alert, and recording capabilities using high-tech cameras with infrared capability for low-light, motion, and recognition systems. Powered by deep cycle batteries, generators, or solar panels, these units can provide off-hours security with mobile application reporting and real-time imaging.

Commodity protection goes beyond theft. Companies should create and maintain an inventory of valuable items, including keys to the jobsite and equipment, and ensure that materials are delivered only when personnel are available to receive them. Goods should be stored in locked containers, and all equipment and materials should be protected from adverse weather. Mark all stacks with wands to protect them from snow removal equipment and ensure equipment operators are aware of the designated laydown areas.

Installing a project-build webcam offers several benefits beyond simply watching construction over time. Key benefits include identifying potential hazards, tracking project commodities, benchmarking, and supporting incident investigations. Additionally, stakeholder viewing provides investors, insurance companies, and financiers with transparency as they can follow the building’s progress.

In Any Event

A comprehensive emergency plan that covers safety, security, and emergency response should be developed and communicated to all parties working on the build. All companies involved in the project should review the plan, which needs to be thorough. In addition to an emergency procedure for regulatory issues like spills or utility damage, the plan should cover what all persons working on the site should do in the event of a fire, power outage, earthquake, injury, or weather event. In particular, wind events can wreak havoc on a build, especially if laydown stacks or the building are covered with tarps, tents, or other materials. Following the weather closely can minimize potential property damage caused by forecasted winds, especially if cranes are in operation.

Morning safety meetings and regular updates from the build teams will ensure that everyone is on the same page, which can greatly reduce the risk of accidents. This is also a great time to consult with the insurance company’s loss control consultant for an analysis of builder’s risk exposures and adequate controls. These services are normally free and can help identify potential hazards to the project.

Builder’s risk policies are not standardized, so it is crucial to work with a commercial insurance broker who is knowledgeable about inland marine insurance, builder’s risk coverages, and the specifics of your construction project. It is important to be aware that policy overruns can occur, and coverage is only valid until the policy period ends or the building is occupied for its intended use.

With this construction season shaping up to be one for the record books in Alaska, ensure your project is protected. By thoroughly understanding builder’s risk coverage, you could save more than just money and time… it might even save the entire project.