Tips for Contractors on Building an Effective Loss Prevention Plan

Developing an effective loss control plan in any construction or contracting company starts with a critical topic in mind — safety.

No matter if your employees are in the office or on-site, they need to know what the safety policies are and who bears responsibility for what. When all team members are well-voiced in your safety plan, you’ll prevent employee accidents and protect your business from multiple types of financial loss.

Here are some tips on developing an effective loss prevention plan for your construction company.

Analyze Accident Trends and Reports

Before diving into a new or revised safety strategy, review what accidents your company has experienced over the last year — look at accident reports, insurance loss history reports, and internal accident reports to see what you should focus on in a new safety plan. This analysis will help you identify potential hazards that you can develop new procedures for, like specific employee injury accidents (including the type of injury), property damage accidents, and near-miss accidents. If you feel your reports aren’t as in-depth as they should be, change your procedures to ensure that all incident reports are fully documented, logged, and saved correctly.

Develop a Comprehensive Safety Plan

An effective loss prevention policy for any construction company should center around a comprehensive safety plan. Accidents can result in financial disaster for your company, so the best course of action is to prevent them. After you analyze your accident trends (above), you can hit the ground running on a safety plan. When you’re writing a new safety plan, consider:

• What program elements are currently in place and how effective they are
• What challenges your company faces and how you can address them
• What your safety priorities and goals are
• Who you need in management positions to implement changes
• How you want to present your safety plan: Training sessions, committees, ongoing educational products, and more

A safety plan is essential in protecting both your employees and your business — make it a top priority for your organization to make sure your policies and procedures are consistently up to date.

Require a Training Program for All Employees

The most important part of a safety plan is making sure employees follow it. The best way to do that is through proper training. Make training mandatory for all new employees, and make sure current employees are always up-to-date on policy changes or new procedures. Consider quarterly training seminars for your entire company to reinforce your safety policies. Types of training to consider include:

• New employee orientation
• Current employee training when he/she is moved to a new department or position
• Situational training (how to respond in the event of an on-site accident)
• How to file accident reports and other written procedures
• First aid and medical treatment training
• What to do when you or another employee gets hurt
• Ongoing company-wide general safety training

Implement a Communication Strategy

You and your management should establish a strategy to ensure accident prevention is communicated company-wide. Any important updates — safety-related or not — should be communicated with the entire company in a newsletter, email, or meeting. If there’s a change to a current policy, the changes should be printed and handed out to each employee. Consider having employees read and return a signed copy stating they read and understand the new policy.

Create a Culture that Fosters Safety and Responsibility

Your employees should always feel safe — whether they’re on the job or need to talk to management about a problem. When you foster an environment where employees can speak freely about when they don’t feel safe or need to report wrongdoing, your business will thrive. Additionally, empower your employees to take charge of a situation or opportunity. Ensure the right people are in the correct position to ensure your business is safe and operational at all times. Some tips on fostering this type of culture include:

• Establishing clear roles and responsibilities for all employees
• Providing high-quality benefits so employees can take care of themselves outside of work
• Holding quarterly town halls so employees can voice concerns
• Taking employee concerns seriously and thoroughly investigating any reported incidents

Find the right insurance to protect you

Construction insurances will be required for every project you work on, and insurance coverage will vary depending on the type of project it is. In addition to a basic Businessowners' Policy, here are some of the most popular insurance coverage types for retail stores to consider:

• Contractors General Liability: This coverage will protect you against lawsuits and financial liabilities that result from employee injury, property damage, personal injuries, and more that can happen on the job. Additionally, if construction workers accidentally damage materials and tools, this type of policy can help cover losses.
• Workers’ Compensation: This insurance coverage is mandatory for all businesses and protects both you and your employees if they get sick or injured.
• Builders Risk Insurance: This insurance will pay for damages up to a set coverage limit. This limit must accurately reflect the structure’s value, including materials, labor costs, and more. You can add more to this coverage to cover specific conditions and situations.
• Owners and Contractors Protective Liability (OCP): This type of coverage is a protective liability policy, meaning it is usually purchased by a contractor to benefit another person or organization.
• Professional Liability Coverage: This type of coverage will cover the cost of a lawsuit due to work mistakes, negligence, and failure to deliver on contracting duties. It includes coverage of mistakes made by contractors or third parties hired by the contractor, like engineers or architects.
• Flood Insurance: Depending on where you’re located, flood insurance is a great option to protect you in the event of a flood.
• Project-specific coverages: This coverage addresses the specific requirements needed to work on a particular project. It provides coverage for these specific requirements, protecting the contractor and what they may encounter during a specific project.
• Surety Bonds: These are heavily used in the construction by investors in construction projects. These protect against financial loss due to a contractor’s failure to complete the project. In construction, this type of bond is an agreement made between you and the project investor.

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