Editor’s note: This month, Jessica Hale, marketing manager for Integrity Insurance & Bonding Inc, steps in for Seth & Ashley Pietsch to provide her insight on protecting your company in light of material shortages.
Material shortages have been at an all-time high with the onset of COVID-19. This has meant huge cost increases and project delays for many contractors. This might leave you wondering, how does this impact my insurance and what can I do about it?
First off, we know that supply delivery is way behind. If you have the luxury to buy in bulk and have product stored and ready to use, that can be incredibly helpful. With that being said, our advice from an insurance perspective would be to up your levels of security since there is definitely an increased amount of theft and vandalism right now. This could mean installing on-site video surveillance for all projects and warehouses where product is to be stored. Also, we recommend taking extra measures to ensure all work vehicles are locked and supplies, tools and materials are secured at all locations, at all times.
From a coverage standpoint, it’s definitely a smart idea to be sure your property, equipment and material limits are where they need to be. With the massive delays in product delivery, this can disrupt your usual project completion dates and most certainly change the estimated cost of doing jobs with such significant increases in supply costs. We recommend speaking to your insurance agent to make sure you are still working within the limits of your policy coverage and if not, having them make the necessary adjustments so you can keep your business running smoothly and with peace of mind.
We also think it’s important to mention monitoring your workers compensation plan. With the number of projects increasing and the difficulty of finding experienced workers in the trade, more inexperienced laborers are being utilized on construction projects. This leads to more on the job injuries, higher claim frequency and severity for workers compensation.
The COVID-19 pandemic has impacted our daily lives in many ways, some of which are here to stay. With this people discovered they can easily work from home, which for many meant home remodels or adding a home office space to work from. Another lasting side effect has been the higher cost of construction materials and supply chain delays, which are not expected to disappear in the coming year. With all of these increasing costs it is important for homeowners, businesses and insurers to do their homework to make sure that these higher costs have been recognized in plans, budgets and insurance policies.
We know that insurance can be daunting and the lingo hard to understand. If you have questions or need assistance reviewing your policies, Integrity is always happy to help.
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