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If you have been in the construction industry or are a new entrant, you should be aware of the following risks directly affecting your business. These points are relevant for general contractors as well as independent construction contractors.

1. Seasonal downturn

Economic activity in the construction business is impacted as the seasons change. There is a noticeable decline in construction activity in the winter season. The harsh cold can makes it difficult and dangerous for workers to work in outdoor settings. It is not easy to excavate land or climb construction sites for a work in progress condominium tower with freezing winds slapping in your face. However, there is no timeline to when a client may take legal action against your business so be sure to be protected year-round. Having proper insurance coverage for your business throughout the year and not just during high season will ensure that your business is equipped to handle legal challenges as and when required.

2. Damaged equipment and tools

A contractor’s tools are his/her resources; without the tools, work can’t be performed. All possible measures must be taken to ensure the tools and equipment are maintained properly. It is a good idea to train your workers on secure handling and storage of equipment. Furthermore, make sure your equipment and tools are covered against theft, damage, and loss.

3. Compensation claims made by clients or employees

Despite all the safety rules that construction contractors may enforce, there is always a chance of accidents at the work site. The hazardous nature of this job means that the likelihood of potential accidents cannot be underestimated. Your business should be covered to compensate for damages to both the client/third party and the on-site worker. If a worker suffers a work-related injury and is unable to work, your WSIB would respond. If a client decides to take legal action against your company for suffering an injury on your work premise or damage to his/her property, then General Liability Insurance can help cover legal fees and any settlements made to the client.

4. Poor quality of finished work

Construction contractors may not only liable for any damage that may occur while work is in progress but also for the finished product. For instance, you completed roof repair work for a client. A few days later, the client informs you that he will be filing a lawsuit against your company citing poor work standard as the roof collapsed and damaged his property. One way to mitigate such risk is to ensure your insurance policy covers “completed operations”.

5. Unexpected Delay in Project Delivery

In a contract, the client and contractor mutually agree on time-bound goals and set deadlines for the completion of the project. However, things may not always go as planned. Unexpected delays in delivery of construction material or shortage of labour means projects deadlines may have to be pushed. If any such situation arises, it is a good idea to inform the client right away. Do not misguide the client with regards to delay in the project delivery as this can impact your relationship with a potential long-term client. Minimize the impact of the delay by collaborating with them to set a new deadline keeping in mind the bumps in the road ahead.

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About Zensurance

Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.

If you have specific questions about your business insurance, please visit us at www.zensurance.ca or email us at info@zensurance.com and we will find the answers for you.