Construction projects range from new residential buildings and remodeling projects to the erection of skyscrapers in downtown urban centers. Construction work has the potential to be very lucrative for the individual professionals performing different tasks and the businesses providing construction services to other companies or property owners.
Unfortunately, the reason that people generally hire professionals for construction-related projects is that construction is dangerous and requires expertise. There is a significant amount of liability that stems from construction projects.
Companies have to worry about workers getting hurt or clients claiming that the project does not meet their standards. How can the executives or owners operating construction companies limit their liability throughout a major project?
With robust contracts
Construction contracts are often very detailed and complex. They include details about everything from the specifications for the finished project to the timeline for the final payments from the client. The terms included in the contract can help protect construction firms from frivolous defect lawsuits or allegations of unfulfilled standards. Detailed, thorough contracts are the first line of defense against construction liability.
With proper insurance
When something goes wrong during regular business operations, insurance can make all the difference. Construction firms and professionals typically need a broad assortment of different types of insurance. Those providing architectural design services in addition to building services may need errors and omissions coverage in case there is some significant issue with the project design. Companies typically need workers’ compensation coverage to indemnify them in the event that an employee sustains an injury on the job. There may be many different types of insurance necessary to limit a company’s risk throughout a construction project. Carrying appropriate coverage for each project can significantly reduce the financial exposure of the construction firm.
With careful regulatory compliance
There are numerous laws that apply to construction projects. There are employee safety regulations that companies must conform to, especially when workers do their jobs at a significant elevation or must operate heavy machinery. There are building codes and regulations to consider. Many construction projects also need to ensure compliance with environmental regulations. Regulatory non-compliance can result in major fees or the inability to complete a project. In some cases, executives might find themselves facing lawsuits or even prosecution because they did not conform to all applicable statutes and safety standards.
There are so many rules and potential sources of risk at play during major construction projects that even experienced professionals can easily overlook something critical. Having appropriate support in the early stages of bidding on construction projects can help ensure that companies appropriately mitigate their liability.