How Insurance Reduces Risk for Contractors & Subcontractors

Insurance Reduces Risk for Contractors

For general contractors and subcontractors, there aren’t many risk management methods that are more effective than creating your very own system to manage risk. Risk management systems focus on potential risks to your business and lay down the ground rules for you to follow in the future, in case you ever find yourself in legal or financial trouble. Of course, if you’ve never worked on a system for risk management before, it can be tough to know how to hit the ground running.

The good news is that contractors and subcontractors just need to follow a few tips to learn how to set up insurance requirements with an agent for their contracts for work. This way, you and your business are never liable for trying to address risks that you shouldn’t be responsible for. Read on to see how you can start creating a tailored system of risk management for your business.

Connect With Legal Counsel and Insurance Agents Who Suit Your Business Needs

To start, you need to connect with legal counsel and an insurance agent who’s worked with businesses similar to yours. Be up-front with them about what you want to get out of your own insurance system, and always stay in touch so that you keep your working relationship going. Remember, an insurance agent is only as useful as the information you give them.

As you continue to meet with your agent and legal advisors about the risks you want to tackle, as well as the insurance system you envision you’ll use, keep them updated on any new services you decide to provide or new customers you’re now working with. This will ultimately let your agent help decide on an insurance coverage plan that suits you and your business needs.

Regularly Check on Your Risks and Coverage

Now that you have a great working relationship with your insurance agent and legal counsel, you’re in a good place to start regularly reviewing your business’s plan for coverage as well as the biggest risks it faces. These reviews will only become more important as you keep scaling your business.

It’s also important to define a schedule for regularly reviewing your coverage with your agent. That’s because your main focus should always be on your business. Leave the heavy lifting to your insurance agent and keep working on what you do best.

Work out Additional Policies With Your Agent

It’s essential that you create extra policies to protect your project assets, such as your inventory of equipment, as well as your employees and subcontractor parties. You’ll need to put these policies in your contracts for work because otherwise, you risk legal and financial trouble down the road in case extra assets aren’t insured.

Just like you did for your own coverage plan, work with your agent to locate a coverage plan for your extra uninsured assets. A good plan will always reimburse you under circumstances that you and your agent agree on. As a general contractor or subcontractor, it’s not worth risking damage to your equipment or harm to your employees because you neglected to include extra policies in your contract.  Never forget to include clauses about extra insurance policies in your contract for work before you begin a project.

Contact Avant Law Today

If you or your business operate out of the Ottawa and Cornwall areas and are interested in how insurance can reduce your risk, then Avant Law can help. We are a full-service law firm and provide only the highest quality service to our clients and community. Learn more about our services and how they can protect your business from legal trouble by visiting us on our website.

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