Many builders put their construction projects on hold during the COVID-19 pandemic. Professionals are now playing catch-up and taking on more projects. Construction workers are also experiencing more liability risks as they engage in more work.
02Companies are searching for ways to reduce liability risks to improve the cost efficiency of projects. The industry must improve job site safety and project stability to minimize risks. Individuals can explore the common liability risks before developing effective management methods.
Common Liability Risks
Granted, Australia’s construction industry has made significant progress in improving its safety record over recent decades.
Thanks to better industry practices, rates of serious injury and fatality have improved markedly since the turn of the century.
Still, construction remains the third most fatal industry in Australia. Builders experience high injury risks on job sites, which impact their health and safety. Construction companies are liable for job site injuries and damaged property components.
Worker safety is the first major hazard on construction sites impacting liability. Professionals evaluate the “fatal four” on job sites to improve builder safety. The four most common fatal injuries occur due to falling, being struck by objects, electrocution, and getting caught between materials.
Poor project planning also impacts liability risk. Minimal planning efforts can cause damage-prone construction projects. Clients may experience injuries after moving into a poorly designed property.
Increasing post-COVID-19 construction demands also influence liability risks. Taking on more projects causes burnout, which negatively impacts the quality of construction. Poorly constructed projects can cause water leaks, rotting components, and exposed toxic materials.
Liability Risk’s Influence on Cost Efficiency
High liability risks directly impact a project’s cost. Contractors purchase liability insurance for their companies to cover job site injuries and property damage. Liability insurance costs depend on a business’s location, size, policy limitations, and previous claims.
A construction company’s premium increases every time one of its employees experiences an injury. The average liability insurance premium is around $70 per month. The monthly rate may increase if builders fail to protect their employees and customers.
Some contractors go out of business when their premiums become unaffordable. Others lose business when customers hear of poor work quality or excessive job site injuries. Professionals can manage their liability risks to prevent high insurance rates.
Managing Liability Risk
Construction professionals can manage liability risks to improve job site safety. They may begin by identifying all major construction liability risks. Construction risks range from environment-related damage to financial losses.
Individuals can determine ways to mitigate their risks after identifying the top challenges. Professionals may mitigate property damage by providing sufficient downtime for their workers. Preventing burnout can ensure the quality of a project.
Construction professionals can also prevent job site injuries by developing thorough training programs. They may additionally have trained managers oversee certain portions of construction projects to prevent confusion-related damage.
Individuals can also reduce liability risks by avoiding potential challenges. Builders can turn down risky projects and avoid damage or injuries. They may also take on fewer projects to keep their employees from feeling overworked. Creating a thorough construction contract may also set guidelines to ensure all employees’ safety and work efficiency.
Improving the Cost Efficiency of Construction
Managing liability risks can keep builders’ insurance premiums low, which reduces construction costs. Individuals may also engage in other affordability-enhancing techniques to improve the cost efficiency of projects.
Builders can use alternative materials in projects to lower construction costs. Recycled materials are significantly more affordable compared to new products. Builders can also engage in deconstruction techniques instead of demolition to reclaim materials. Reclaiming materials is another cost-effective way to access building components.
Individuals may also use modular construction to limit liability risks and reduce building costs. Modular construction practices minimize construction waste and promote material recycling. They also limit job site injuries by reducing fall risks.
Builders develop various pieces of a structure in controlled conditions during modular construction. They can build roofs at ground level to reduce injury risks. Reducing the risk of injuries and minimizing material waste improves a project’s cost efficiency.
Promoting Change in the Construction Industry
Building companies can access lower premiums by promoting job site safety. Increasing safety can help professionals maintain affordable rates. Insurance agents may also help builders manage their liability risks by teaching mitigation and avoidance techniques.
Jane is the editor-in-chief of Environment.co where she covers green technology, sustainable building and environmental news.