Construction sites are inherently dangerous. But the risks can be controlled and the potential for accidents, large and small, can be reduced with a thoroughgoing, diligent program. You can’t ever relax when it comes to safety; it has to be a 24/7 commitment.

But even the best safety program can’t prevent all mishaps, so you need to be sure your project is properly insured.

Building sites are very challenging from a safety and loss-control perspective. Construction is inherently hazardous, and contractors and builders are under more pressure to get the job done quickly – especially in today’s financial environment. Un­fort­unately, safety can fall to the bottom of priorities.

The commitment to safety has to start at the top, but it can’t stay there. Developers and builders should reach out to front-line supervisors and make them their allies. Without their cooperation, a safety program will go nowhere fast.

Loss control also means keeping outsiders out, as theft and vandalism are the most frequent causes of loss. Construction sites can attract teens who want to create mischief, as well as serious thieves out to steal tools. Security guards 24/7 can’t hurt but aren’t foolproof. While the guard is dozing, using the bathroom or reading, vandals can sneak in. Bright lighting and a well-maintained fence that’s at least eight feet high are the first lines of defense to discourage interlopers. Clear debris away from both sides of the fence, and take tools offsite every night if possible.

Safety is challenging because there are so many hazards at construction sites: compressed-gas cylinders, temporary heaters, combustible debris like lumber and wood chips, cans of gasoline and other flammable liquids, and blocked exits.

And there’s always the danger of structures collapsing. For instance, a few years ago – in a spectacular failure – a crane collapsed and destroyed an adjacent building in New York City. Contractors must follow all industry protocols to make that sure neither the building under construction nor the one next to the site will collapse. You have to both know the rules and apply them every day.

Fire prevention is crucial. A wind-whipped small fire can quickly rage out of control and gut the entire building, which is open and doesn’t have fire controls like firewalls, fireproofing and sprinklers found in finished buildings.

After welding, a fire watch should be held until things cool down to ensure that embers don’t ignite a fire. Many construction workers smoke despite bans. Post “No Smoking” signs, but be practical and provide sand buckets so smokers can extinguish cigarettes.
Not having fire extinguishers is inexcusable. An extinguisher can make the difference between a minor fire and a catastrophic one. Provide ample extinguishers and make sure people know how to use them.
People are the most crucial element in safety. Job supervisors focus on getting the project done on time, and safety may not be a top concern. But you can get them to be on your side and more safety-aware. Hold weekly safety meetings and morning “toolbox talks” – daily safety sessions for the supervisors and crews.
Another option is to hire a firm to produce a customized safety video. A video, viewable on a computer or television, can be the one of the most effective ways to make the safety message stick with workers.

But even the most careful supervisors and workers can become blind to hazards, so hiring a pair of trained outside eyes is wise. A professional loss-control engineer should inspect the site monthly.  A pro can spot developing problems and recommend steps to correct them.

Insurance Requirements
Because of the many risks involved in construction projects, general contractors and/or developers need builder’s risk and general liability insurance. And occasionally an owner’s contractor’s protective liability – commonly referred to as an OCP – insurance may also be required, depending on circumstances of the job. A builder’s risk policy is a special policy that’s relatively expensive, but crucial due to the special nature and exposures of property in construction. Builder’s risk covers property damage to buildings under construction caused by fire, windstorms, collapse and other specified risks, and provides general liability coverages for injuries and property damage inflicted on third parties.

Determining the correct property – damage limits for “hard” construction costs is fairly straightforward – you can calculate it by simply adding up all the proposed materials, supplies, delivery, removal and labor costs used in the actual construction. After that, add in “soft” costs like permits and architects and engineers’ fees.

If you’re a developer, your general contractor’s liability policy should insure your company, too. Require your general contractor to provide an OCP policy that names your company and/or property owner as the “insured” during construction. Similarly, the general contractor should require subcontractors’ policies to name it as the “insured.” For example, if the contractor drops a beam on a Rolls Royce and your company is named in a suit for damages, this policy will apply to it, and general contractor’s exposure on its own general liability policy would be minimal if any. And if the claim is so big that it exceeds the contractor’s liability coverage, then your policies may kick in with additional protection on your behalf.

Some projects are large enough to qualify for a wrap program that considers the project as a single entity. The wrap program covers the developer and contractors as one group, wrapping in workers’ compensation, general liability and umbrella liability around the combined entities. This provides ease of administration and cost control.

With most projects, insuring the finished value of the project is simplest. However, an insure-as-you-go plan can sometimes save money. This involves insurance to cover the value of the project to that date. You have to file timely reports on increases in value. However, the modest potential cost savings may not be worth the extra work and potential risk involved.

Terrorism insurance may not be needed. Since terrorists aim to cause both death and destruction, they are attracted to occupied buildings.

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