Building the Right Relationship: Five Things Every Construction Company Needs from Its Insurer
Teed, Bill, Risk Management
Successful construction companies hire the right people, best equipment and win bids for business. But when it comes to selecting insurance, many contractors may only compare premiums. Such an important decision, however, must also consider several other variables.
Finding an insurer that will provide coverage is easy. Finding a true insurance partner that delivers value beyond the policy's explicit coverage is not. So in the construction industry, where risks are high and the time span of liability is long, there is more than just cost to consider. Here are five of the most important factors a contractor should be sure to look for in an insurance provider.
1. Risk Control Services
Most insurers say they offer risk control services, but generic recommendations made by someone unfamiliar with jobsite safety add little value to operations. Instead, look for a carrier that employs risk control specialists who work exclusively with contractors. This specialization will provide risk advice relevant to exposures your construction company is likely to face.
For example, contractors often have projects where fall protection or trenching safety is a concern. Other projects may involve traffic in the work zone or specialized heavy equipment, such as cranes. Risk control professionals who work only with contractors are able to deliver recommendations on specific situations. This can save the company time and money by focusing on what matters most.
2. Workers Comp Management
Even with strong safety measures in place, accidents will happen and a worker may be injured on the job. Construction companies have a particularly strong interest in their workers' claims. Not only are workers compensation claims a top driver of higher insurance costs over time because of the experience modification factor, but many contractors are prohibited from bidding on certain jobs if their "mod" is too high.
On the surface, all workers comp policies may seem similar. However, risk managers should look for an insurer that can keep workers comp costs in check while continuing to deliver appropriate care to injured workers.
In order to manage workers comp claim costs well, risk control services should include a thorough initial investigation to discourage fraud and a resolution strategy aimed at getting an injured employee back on the job as quickly as possible.
Another key to controlling costs is choosing an insurer with an approach to medical management that supports appropriate treatment while managing expenses. An insurer should have extensive provider networks, nurse case managers, medical bill review, utilization review and a pharmaceutical management system.
3. Solutions to Common Challenges
With the downturn in construction causing many contractors to look for ways to cut costs, maintaining high-level safety programs has become a huge challenge. An insurer that specializes in the construction industry can provide easy-to-use tools at no additional cost that can help builders in their daily operations. They may also provide templates for safety protocols, emergency response planning and other processes useful to builders.
For example, one study has shown that two-thirds of workers comp claims come from employees in their first year on the job. A research-validated questionnaire can help determine whether an applicant is likely to take chances, ignore safety rules or be dependable about showing up for work.
Other examples include safety orientation training for new hires, jobsite safety awareness for superintendents, OSHA training and worksite protocols to prevent accidents. …