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You can use risk management to your advantage

| May 16, 2017 | Firm News

The world of construction is changing rapidly. Gone are the days of townspeople coming together to raise a building in a day. California building projects are increasingly demanding, and contractors face many challenges. Owners want their projects completed quickly and cost-effectively while contractors must be aware of local codes, environmental concerns and labor issues.

As a contractor, you understand how devastating to a project any setback can be. Whether it is a natural disaster, a shortage of supplies or change in idea direction, delays affect your reputation and your bottom line. A jobsite accident that leaves a worker injured is the worst-case scenario. Preparing for and avoiding these risks is crucial.

The changing face of risk management

More often, contractors like you bear the brunt of risk management responsibilities. You probably don’t need experts to tell you that the most urgent item on your list is completing the project on time. However, studies show that contractors are finding it harder to meet their deadlines because of a number of factors, including:

  • Projects are becoming more complex.
  • Changing margins may require you to adjust your business model.
  • You are facing a shortage of skilled workforce.

Probably the most challenging roadblock to meeting deadlines is the shortage of labor, particularly in specialty trades such as masons, electricians and plumbers. Having a limited pool of workers may jeopardize your ability to complete projects on time, and, as you know, meeting deadlines is crucial.

Assuming and managing risks

While many project owners may want you to assume full risk management responsibilities, some experts believe that doing so may be good for your business. If you promote the fact that you are willing to take on complete risk management for projects, you may attract more business and more lucrative projects. However, in order to succeed at this, you will certainly need to have a thorough risk management program in place.

Without a doubt, your budget is tight, so risk management is essential for your business to be successful. You may benefit from having a legal advocate to work with you as you review contracts and determine the level of coverage necessary for your circumstances. An attorney with experience helping business owners with a wide range of insurance and risk management issues will provide you with assistance every step of the way.