Every construction entrepreneur will tell you how complicated running a business in the industry can be. It’s one thing overseeing a project, but it’s quite another thing to oversee a company.
You’ll have multiple areas to oversee, such as obtaining new clients and getting people paid. Safety will be a significant aspect to this. That goes far beyond keeping employees and other people safe on the job, however.
You’ll need to keep your overall company safe from risk. You mightn’t know how to protect your construction company, however. If you don’t, then it’s worth taking advantage of a few risk management strategies.
Some can be well recommended for your business.
How to Protect your Construction Company
Use Contracts to Allocate Risks
When you’re onboarding clients and starting a new project, there’ll naturally be contracts involved. You should use these to minimize your risk as much as possible. You’ll naturally be responsible for some specific things.
That’ll revolve around the actual construction process. You should avoid any risk beyond this. Anything related to the design of a building, provided you’re not overseeing this, should be given to the designer. That includes potential risks related to that.
The same is true for other aspects of a project beyond your control. Having these clearly stated in the contract makes sure that you’re not legally liable for them if things go wrong. That’ll be more helpful than you’d think.
Have an Attorney On-Hand
If one of your workers is in an accident while picking up materials for a project, what would you do? The natural answer is to make sure that they’re okay. You may also want to call a truck accident attorney or similar professional.
You’ll need to make sure that your business is covered under a range of circumstances. That means having legal counsel available when you need it. Though you shouldn’t need this too often, it’ll be vital to your company’s continued success.
In many cases, you’ll only need this when you’re starting the company, alongside for minor things after this. You could find yourself needing them for larger things, too, however. Knowing which attorney you should turn to in these situations is crucial.
Doing the research beforehand can be worth it.
Protect your Payments
Late payments are an unfortunate occurrence in many industries. That’s especially true in construction. You’ll need to take measures to protect yourself against this. If you’re a new or small construction firm, your livelihood could rely on getting paid on time.
You can use several measures to make sure that you do. The most notable are:
- Sending preliminary notices ahead of an agreed-upon payment date.
- Having clear and easy-to-understand payment terms and a payment timeline.
- Following up with clients about unpaid invoices.
You should find that most clients will pay on time. There’ll be the unfortunate few who don’t, however. Keeping the above in mind will minimize this and get things back on track quickly. Once your business has grown, this risk will be less of a threat to your operations.
That shouldn’t make this less of a priority, however. Keep them in mind at all times.
Know your Insurance
The easiest way to protect your construction company is by being insured. While that’s quite obvious, some entrepreneurs don’t know as much about potential policies as they should. Some could be better recommended than others.
That makes it worth knowing what your options are. While there might be local or state laws mandating minimum requirements, you should still have a certain amount of wiggle room.
You’ll have a few options available to you. These are:
- All Risks Insurance
- Public & Employer’s Liability Insurance
- Professional Indemnity Insurance
- Product Liability Insurance
- Latent Defects Insurance
Each insurance policy comes with its pros and cons. That’ll make certain ones more appealing to you than others. Spend time to make sure you get the right ones for your company’s needs.
While you hopefully shouldn’t need to use it, it can be well worth it if you do.
Multiple aspects are involved in knowing how to protect your construction company. It can often seem like a lot of work. It’ll be more than worth it, however. It also doesn’t need to be as difficult as you’d think.
Planning things out in advance will be more than recommended, as can implementing various processes. Automation in multiple areas can also be recommended.
Using each of the above, whenever possible, will be quite helpful. Though they could seem minor, they’ll protect your construction company much more than you’d think.