Let’s talk through 2 FAQs about Covid-19 and Contractors Insurance. The first is: should you be doing anything? The second is: what should you be doing?
Daily risks plague the construction industry. These result in thousands of bodily injury and property damage claims each year. But, this virus has created a whole new level of risk.
Both large and small contractors are now faced with the larger threat: will your building-related business survive the coronavirus?
The ripple effect
Widespread disruption to project deadlines is wreaking havoc. Many risk-mitigating actions are out of your hands, but they are certainly impacting contractors in these uncertain times. 3 of these are:
- Revisiting or withdrawel of project financing s project viability comes into question
- Delay of new projects
- The shutdown of projects by local municipalities for health and safety reasons.
So, is there anything you can do to help your business survive these uncertain times?
Should you be proactive?
When it comes to immediate next steps, there are two schools of thought. The first is Wait-And-See. Here, the advice is because the fallout of the impact of coronavirus on the construction industry cannot yet be quantified, the best course of action is to do nothing. Yet.
The second course of action makes more sense to us. This is the Do-Whatever-You-Can approach. Of course, we’re not advocating that you invent things to do during shutdown. There are positive actions you should be taking to protect your contracting business.
What can you do NOW?
Suspended construction activity doesn’t mean that all threats to your project are also on hold. Whether your construction sites are closed due to government ordered shut-downs, delays in kick off or completion, or interrupted supply chains the actions you take now will affect the success of your insurance claims.
Here are 3 things you should do immediately, if you haven’t already.
- Secure the site against theft – enclose site with locked construction fencing; keep temporary lighting illuminated; employ a 24-hour watch system.
- Secure the site against fire — remove construction debris and other combustible materials; de-energize electrical equipment; maintain automatic sprinkler system.
- Secure the site against wind, water and other weather threats — lower crane booms and secure all hoists and lifting machinery; bracing; covers; nets.
Are you covered?
The most common questions our insurance consultants are hearing is, Is my business covered? In well-negotiated Builder’s Risk coverage, these material costs could be covered:
- Costs to maintain a presence on site and additional site security costs
- Direct project expenses related to General Conditions and contractor costs
- Project financing costs
- Costs relating to procurement and supply chain disruptions
Does your policy provide this coverage?
Advice about Covid 19 and Contractors Insurance
Our answer is always: It is impossible to tell without assessing the policy. But now is the time to take action. Bear in mind that insurance companies will be facing thousands of requests for policy extensions in the coming months. When it comes to negotiating extensions to your Builders Risk coverage, do it sooner rather than later before the bottleneck and backlog.
We can assist in reassessing and extending your insurance coverage. Speak with one of our consultants at Contractors Liability Insurance. Call 866-225-1950