While a labor shortage is an issue in any industry, it can have dramatic impacts on construction companies. A lack of workers directly impacts your ability to complete contracts according to schedule, impacting profitability and reputation. A lack of supervisory staff can also result in poor quality control and less diligence when it comes to project safety. Now more than ever businesses like yours need to think carefully about risk management with a decrease in the construction labor force.
Meeting Industry Challenges
Insurance products help companies manage their risks. Consider these products and the implications of a labor shortage:
- Workers’ compensation: With fewer workers providing the scope of a larger crew, the potential for on-the-job increases.
- General liability: Less oversight with respect to safety may result in carelessness that leads to third-party injuries or property damage.
- Builders’ Risk: A decreased workforce can increase the risk of losses and damages for projects that are under construction, and therefore “owned” by the construction company.
- Professional liability: Poor quality control and quality assurance can lead to more errors, mistakes, and claims of negligence.
Construction companies may need to consider increasing coverage limits and securing umbrella policies to address gaps in protection.
Protecting Your Business
Protecting your business from operational risks is essential, especially for contractors, subcontractors, and construction suppliers. Each company must be prepared to meet new industry challenges, including labor shortages. It’s important to regularly revisit your insurance plan to check for new gaps.