The Hartford and Advisen recently released a white paper that underscores the fact that construction risk managers are facing a new risk management landscape which demands a more collaborative approach in order to minimize if not completely avoid costly insurance claims. The 7-page white paper examines where collaboration breakdown takes place and discusses how the resulting insurance losses can be prevented.
The tripartite relationship between insurer, broker, and risk manager must be in its most advanced form in today’s construction industry. Contractors and owners need to improve how they execute communication and collaboration if they intend to avoid costly insurance claims.
Special areas to consider to succeed in these areas include: understanding the impact of the skilled labor shortage on project risks, using technology to improve safety and reduce construction defect risks, negotiating contractual risk transfer, determining who should purchase the builder’s risk coverage, ensuring professional liability coverage and limits are appropriate, and selecting and managing subcontractors.
Collaboration between firms to share best practices and operational strengths could be a way to minimize and manage risk. There are many examples of companies successfully partnering where one partner has strong knowledge of the local environment and the other has the technical expertise needed for the project. Successful partnerships put communication and collaboration at the top of the planning agenda and commit to it throughout the project.