Knowledge Corner

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The popularity around utilizing resilience as a risk management tool is growing. Resilience can be defined as reducing the impact of a disturbance. When facing natural catastrophes, insurance is an important technique that is used to help us rebuild. Resilience is the ability to “bounce back.”

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We’ve all heard of the Infrastructure Investment and Jobs Act (IIJA) that provides $1.2 trillion in Federal funds for transportation infrastructure, resiliency, and environmental improvements. These monies started to subsidize projects last year, and a 16% increase for civil construction is expected this year.

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When dealing with Workers’ Compensation insurance, there are two components to the insurance policies. The first part consists of Workers’ Compensation insurance, which pays for the medical expenses, as well as wages lost due to the injury. The second part consists of Employer’s Liability insurance, which covers the owner of the business, should the business be blamed as the cause of the employees’ injury/illness.

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As a contractor, when enrolling into a CIP or Wrap-Up program, there is often enrollment paperwork that needs to be completed before a contractor can step foot on the jobsite. As part of the enrollment process, the Wrap Administration team managing the program will ask for the contractor’s start date.

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Builder’s Risk is a type of property insurance that focuses on providing coverage for buildings during the construction process. This insurance plan is important for anyone looking to be involved both financially and physically in the operation, including architects, engineers, contractors, subcontractors, building owners, or property owners. In this protection plan, insureds are covered against damage or loss of equipment, materials and/or fixtures that are used during construction or renovation. Builder’s Risk coverage is applied prior to acceptance and delivery of the building to the owner.

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Risk Management is the practice of identifying and analyzing loss exposures and taking steps to minimize the financial impact of the risk they impose. Your company can face internal risks and external risks.  Examples of internal risk include HR/Labor relations, contractual risk, and succession planning.  External risks include regulation changes, competition, and legislation changes, just to name a few.

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As the Sponsor (Owner, or General Contractor) for a Wrap-Up program, you should be aware of the types of reporting your Wrap Administrator should be providing. In addition to a daily report with your project’s contractors, other types of reporting are a big part of your Administrator’s duties. It starts with monthly, quarterly, and annual stewardship reports based on the needs of the Sponsor.  Critical information in these stewardship reports includes: timelines, open items and responsibilities, loss experience and claim reserves, if available, Wrap-Up Enrollment schedules, any existing or anticipated problems/challenges, and accomplishments.

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As a contractor, you may be wondering if a captive is right for you, as they have recently been gaining in popularity. However, captives are not a new invention and were created in 1962.

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Have you considered self-insurance as an option for your company’s risks? Self-Insurance plans are when the insured takes the risk on themselves but can decide the level of risk they want to take on. Let’s examine two of the most common self-insurance plans:

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When beginning work on a project, it’s often required that the contractors have surety bonds in place. However, not only can a surety bond protect a contractor, but it can also protect the project owner when there are issues interfering with the completion of a project.