General contractors coordinate and manage all materials, activities and personnel involved in both residential and commercial construction projects. Their duties often involve hiring and training subcontractors, applying for necessary licenses and building permits, and providing hands-on supervision and guidance to workers on the job site. Due to their wide variety of activities and responsibilities, these professionals are often exposed to many safety, liability and property risks. This is why it is important to have effective loss control measures in place. This resource outlines common risks that general contractors must address and offers helpful strategies for avoiding potential claims.
Main contractors: Premises & Operational responsibility
The nature of general contracting raises various liability issues. For example, injuries and damages from third parties can lead to costly compensation claims. Excavation work can also cause drainage and erosion problems, undermine the foundations and structural integrity of other properties, and affect gas and electricity lines. Therefore, it is important for general contractors to take the following measures to limit their premises and operational liability:
- Create a housekeeping program to ensure that materials, tools and other items are secured to prevent them from falling. This program should also address slips, trips and falls by ensuring that spills are cleaned up promptly and that all areas are kept free of debris.
- Ensure that there is a fire safety plan in place and that it is communicated to every employee. If smoking is permitted in the workplace, create a designated smoking area.
- Develop and implement a trenching safety program, including signage to signal the presence of open excavation and ensure proper use of shoring, slope, and shielding. It is also important to ensure that grading and soil compaction is done correctly.
- Provide site security measures – such as fencing or security personnel – to prevent the public from trespassing on work sites.
- Develop and implement policies and procedures for entering residents̵7; homes to prevent property damage.
- Make sure there is a hot work program in place. Keep fire extinguishers near all areas where hot work is done and ensure all employees are trained in their use.
As an employer, general contractors must protect their employees from illness and injury on the job. Occupational hazards related to general contracting include significant exposure to fall, back and impact injuries as well as slips, trips and falls to name a few. General contractors should implement these employee safety measures:
- Establish a fall protection program and train employees on how to properly use fall protection.
- Implement a ladder safety program and ensure employees have received appropriate ladder safety training.
- Create a slide, trip and fall program. Conduct slip, trip and fall assessments to determine the likelihood of such an accident occurring in the workplace.
- Ensure employees receive adequate training before using tools or equipment.
- Create an incident investigation program that enables quick and thorough incident investigations.
- Establish a personal protective equipment (PPE) program and conduct a PPE survey to determine what is needed for each task. Provide all necessary personal protective equipment to employees and train them on the proper use of this equipment.
- Identify a competent person on the crew to whom employees can report. The authorized person should also conduct regular excavation and shaft inspections to ensure that proper safety prevention techniques are used.
- Train employees on how to use excavation and excavation equipment, as well as how to properly dig trenches and perform excavation. Make sure operators have been properly trained through school or other programs.
General contractors face many inland marine exposures, especially since they often use their own construction equipment and tools on job sites. Inadequate maintenance procedures and lack of prevention protocols can result in equipment damage, which can lead to significant downtime and costly repair or replacement costs. General contractors should consider these steps to limit the risks:
- Keep a detailed list of machinery and tools. Each item must include an identification number, age, type and condition. Never leave tools in place or out in the open. Either put them in a vehicle or have a safe place to store them.
- Add non-removable labels to equipment to allow easy and permanent identification.
- Implement security measures to prevent equipment left at work sites from being damaged, vandalized or used by unauthorized persons. These measures may include installing security cameras, locking equipment doors, and hiring on-site security.
- Create a program that requires pre-use inspections of equipment. Corded tools should be inspected to ensure there are no cuts or frayed wires.
Since general contractors often have their own fleet of vehicles and employees often travel between different work sites, commercial auto exposures are significant. In particular, accidents on the road can result in serious consequences, including injuries to employees, costly property damage, and potential liability issues involving pedestrians or other motorists. To minimize commercial vehicle exposures, general contractors should follow these protocols:
- Ensure that all drivers have approved driving records. Specifically, it is important to secure the Motor Vehicle Record (MVR) for all drivers. MVRs should be updated annually.
- Provide employees with proper training on safe driving measures. Ensure prioritization of loading procedures so employees load vehicles correctly.
- Prohibit employees from using their cell phones while driving.
- Consider using telematics technology in commercial vehicles to identify risky employee driving behaviors (eg speeding and hard braking).
- Implement an effective vehicle inspection and maintenance program. Such a program can help ensure that all commercial vehicles remain in good condition and are safe to operate.
- Review all commercial vehicle and trailer characteristics (eg, size and weight) to determine applicable Federal Motor Carrier Safety Administration (FMCSA) regulations. Regularly monitor compliance with FMCSA standards and make operational adjustments as needed.
We can help construction contractors
It is important for general contractors to implement proper risk management precautions to limit costly insurance claims and lawsuits. Doing so can offer various benefits, such as greater customer satisfaction, enhanced employee safety, fewer liability issues, and reduced risk of property damage.
Although this resource provides a range of loss control strategies, general contractors do not need to establish their risk management programs alone. Working with a qualified and experienced insurance professional can make a big difference.
We know the industry, we understand your needs and we work with several insurance companies so that we can deliver the insurance solution that is perfect for your business and your budget.
When you have confidence in your business insurance, you have greater peace of mind knowing that you can continue working to generate revenue, even when disaster strikes.
To get started with your customized solution, contact one of our licensed advisors, or request a proposal and we’ll get started right away.