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By Jeff Wing
May 9, 2016
You toss and turn all night while visions of cost overruns dance in your head. If it’s any consolation, that’s to be expected. You’re trying to manage the king-sized Rubik’s Cube that is construction, my friend. Just because the sun goes down doesn’t mean your project hits the hay. All too often you are left juggling change orders, drawings, RFIs, and budgets into the wee hours. Hell, you’re probably project managing in your dreams. And that’s if your project is running smoothly! What about that endless list of risks that plays on repeat in your head; your version of counting sheep that keeps you awake rather than lulls you to sleep... Safety Claim, Schedule Delay, Budget Terror...Safety Claim, Schedule Delay, Budget Terror...
But that doesn’t mean you have to spend your days and nights in a constant state of worry or panic. Even if an unexpected risk turns up suddenly to derail your project, there are solutions specifically designed to cover your ass––so you don’t have to.
Here are four potential risks, each with a simple solution.
While it may not seem like this worry is worth the insomnia, the fact is, it gets costly. At this writing, copper is going for $2.29/pound. This makes it a commodity that, under certain circumstances, will be leaving your building site as soon as the sun goes down. Copper is lightweight enough to be quietly hauled away in bulk, and most scrap yards will buy it from the seller, no questions asked. It’s been estimated that jobsite thievery constituted a $1 billion loss in 2015. And a desperate thief (is there any other kind?) will cause $250,000 in damage for $200 worth of installed copper pipe.
Solution: Install lighting on the site that is activated by motion sensor–nothing unnerves a thief like being illuminated mid-scheme (a well-lit site only inspires a stakeout, ingenuity and stealth); Install a couple of inexpensive video cameras and several dummy cams out of reach of the mischievous copper collector, and post obvious signage announcing this; and consider making the copper a contractual responsibility of the relevant sub for their safekeeping (on or offsite) until the project reaches substantial completion.
Remember those liability waivers and contracts to which you happily applied your signature? Well, they’re not ironclad. Surprise! Courts have been known to simply walk through these protective legal agreements and on to the facts of the case. Remember that a waiver or contract is only as helpful as the court’s obligation to honor it. Liability waivers are notoriously flimsy when the courtroom going gets rough.
Solution: Work with an attorney to actually craft something that the courts are less likely to easily challenge. And just in case, back up your liability waiver with a business insurance instrument that will act as a safety net should the courts step over your liability protection. Lastly, there is always the “nuclear option”; sit down and talk with your temporary adversary and work things out! It’s almost always in everyone’s interest to come to an agreement before things get all legal––and can be an easier sell than either nervous party imagines.
When work dries up, seasonally or otherwise, you may understandably allow your insurance to lapse so you can save on the monthly premiums. The problem arises when, months down the line, the client finds a reason to file suit and your policy is no more. Oops.
Solution: Keep your insurance policy active year-round! Some enlightened insurers will allow your monthly premiums to ebb and flow with the tide of your workload so your lean months coincide with a smaller premium. As long as they’re getting the same total over the course of a policy, some insurers don’t mind dialing down the monthly here and there and boosting it later. Look into it. But keep the policy active.
The most well-managed construction site is a risk pool of potential accidents. If a worker is injured and can make the case that your site’s lax safety standards were a contributor, you’re exposed. Even if you prevail in the case, the court costs can be jaw-dropping, and those costs are not covered by General Liability Insurance.
Solution: Most states require worker’s comp insurance, and this all-encompassing insurance covers payment of medical bills, wages for the injured worker, and even has a component called Employer’s Liability Insurance which can fund, at least in part, your legal costs associated with an injury-based litigation. Oh, one other thing: OSHA is your best pal when it comes to staying out of court and, more importantly, protecting your workers. Look at your environment through OSHA Eyes and cross every T. Compliance is the root of all safety.
Now, enjoy that full night’s sleep.
The Anatomy of a Request for Information (RFI)
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