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Construction executives oversee projects run on a strict timetable. When there are disruptions, from factors such as staffing issues, resource allocation, supply chain delays or downtime from damaged equipment; economic havoc can erupt. Being prepared for any type of interruption can ensure the business can recover quickly with minimal impact to the financial well-being. Being nimble to identify the loss, correct the issue and return to full capacity are key to mitigating damages. Knowing your policy is key to rapid recovery.

Insurance policies are custom designed to fit the individual needs of each operation. Your staff work needs to work with your insurance agency and individual agents to secure a mutual agreement on coverage that works best for your group. This is an evolving partnership and should be reviewed at minimum annually. Equipment and buildings depreciate, fuel fluctuations and potential shifts in the timing and transportation of goods to market are all variables impacting the type and amount of insurance coverage you may wish to secure to protect yourself.

Look up your agent’s contact information. Pull up your insurance policy and review your coverage. Talk to others in the industry and compare notes. Put yourself in a position to be proactive rather than reactive. It’s not if a loss occurs, but when it does, being well informed on the coverage you have on your operation will help navigate to the road of recovery.

Some organizations are fully insured. Some are self-insured. Some have a blended coverage where they cover the “small stuff” to avoid a high premium, or the loss is less than the deductible. Its not a “one stop shop” of information, but rest assured ALL need to follow the same steps no matter if it is handled in house or with our insurance company. In short, it is paramount to ensure you’re covered for the things you don’t want to pay out and that you’re not overpaying for the things that you are going to pay out.

When electing to report damages to an insurance carrier, they will determine if the damage is “covered property” and if the loss was caused by a “covered cause of loss”. As a part of their determination, they may have you speak with an adjuster, they may assign your case to the SIU (Special Investigation Unit), and they may send out an independent appraiser, such as Property Damage Appraisers. Either way, a determination to the “who/what/when/why/where” of the loss is going to be made. As the insured, you may also be contractually required to see that certain steps are taken in the event of loss or damage to “covered property” are taken. 

Be prepared to:

  • Notify the police if a law has been broken. If theft, vandalism, trespassing or any possibility of an intentional act which violates the law occurs, contact local law enforcement and make a report.
  • Give the insurance carrier prompt notice of the loss or damage, description of how, when and where the loss occurred so they can provide immediate guidance throughout the claim process.
  • Take all reasonable steps to mitigate your loss by protecting your property from further loss. When possible, secure images to document damage or secure the damage property for future examination.
  • When expenses are incurred for emergency or temporary repairs, retain all records for consideration in the settlement of your loss.

Determining the cause and origin of the loss validates if the damage is a covered cause of loss as described in the policy while also determining if there is a right to recover damages from a responsible third party, or subrogation of damages. It is vital the damage property is retained, preserved and the chain of custody is maintained to explore potential liability and recovery of damages, including applicable deductibles. If a third party is found to be liable for damages, the insurance company will seek recovery of the damages paid out, include any deductible incurred by the policyholder.

The question of “who is at fault” isn’t always the first thing to figure out. Whether the damage is to your equipment, or your organization caused damage to somebody’s property and/or equipment; what is most important is being able to accurately determine the value of what was lost and the amount of time it is going to take to recover that loss.

Executives will continue to face challenges with the variable cost of fuel, availability of approved and qualified labor, shifts in local and national buyers, tariffs and pandemics, weather and catastrophic events, all these factors are impacting the overall profitability of the business. Being proactive in identifying ways to mitigate losses may save thousands of dollars in loss avoidance. Reviewing your insurance coverage annually with your agent to determine a plan specific to your operation will keep you informed on how to proceed should your operation experience a loss. A blend of well- planned insurance coverage, self-insurance through higher deductibles and coinsurance may offer lower rates while still providing peace of mind when faced with providing coverage your needs.

Being well-informed on the value of property, goods, services and equipment utilized in your operation can offer alternatives when determining your insurance needs and the premium associated with those coverages. Insurance policies may include specific limits of insurance for covered property, offer a variety of covered causes of loss, allow specified dollar amounts for named property and a menu of coverage options tailored to secure desired coverage and a premium within a specific budget. Consideration to self-insure property through higher deductibles, coinsurance with the carrier or exclude certain property from your policy are all viable options to help manage insurance costs. Reviewing those options with your insurance agent to gain an understanding of the financial impact to your bottom-line premium investment and the understanding of your out-of-pocket expenses when a loss occurs, will result in an optimal financial decision for your daily operation.

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