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5 Construction Liabilities the Industry Must Cover

Construction projects can be costly, time-consuming, and full of liability. Whether you’re digging a new drain trench, erecting a skyscraper, or building a new house, you won’t be free of liability.
Desireé Duffy is a marketer, author, media expert, and Founder of Black Château—a public relations and marketing agency specializing in promoting authors, books, small press, personality brands and creative companies. She chairs AWM SoCal’s Advisory Board and sits on two advisory boards for the Lifeboat Foundation. An award-winning marketer, she writes about digital media, online marketing, technology, and topics with social impact.
Desireé Duffy is a marketer, author, media expert, and Founder of Black Château—a public relations and marketing agency specializing in promoting authors, books, small press, personality brands and creative companies. She chairs AWM SoCal’s Advisory Board and sits on two advisory boards for the Lifeboat Foundation. An award-winning marketer, she writes about digital media, online marketing, technology, and topics with social impact.

The construction industry is growing and evolving like never before. If you are in this vertical, you are likely aware of the current boom and the sustainability many are predicting in this sector. With growth comes a need to be aware of the costly ramifications if safety doesn’t come first.

Construction projects can be costly, time-consuming, and full of liability. Whether you’re digging a new drain trench, erecting a skyscraper, or building a new house, you won’t be free of liability. In the event of an accident or some other occurrence, you’ll want to be sure you’re covered by insurance and/or an attorney to handle the legal end of things. Here are five liabilities to cover during construction.

1. Worker Injuries

One of the major hazards of working with power tools and dangerous materials is, of course, worker injury. This can also be the most costly if you’re not careful. Unsafe work conditions can lead to injury, but not providing a safety protocol and enforcing it can also become an issue should a lawsuit result from worker injury.

You’ll want to be sure your safety standards are known to everyone. If you need to hand out a print-out every single day of the project, do it. It’s better to have your workers be over-informed than under-informed. If you’re ever sued in court for worker injury, the judge will want to know whether or not your safety protocols were clearly spelled out to determine where the fault lies.

You can also post signs and reminders throughout the job site to serve as visual reminders for things like slippery surfaces, hard-hat areas, or dangerous tools.

2. Property Damage

When your concrete truck driver accidentally dumps ten tons of cement on someone’s car, you’re going to be liable. Property damage is a very real liability issue that many construction sites overlook. Something as simple as an accidental concrete dump can cost you not only the recovery cost of your materials, but also the replacement or repair costs of any personal property you damaged.

It’s important to have your construction site clearly marked, and, of course, as we already mentioned, have strict safety protocols for your workers to follow to minimize the chances of causing unintentional property damage. Also, you’ll want to carry work site or liability insurance that will cover these costs should they occur.

Property damage also applies to whatever you’re building. If you have frequent break-ins, or are building in a high-crime area, you can hire construction site security to maximize your site’s security standards.

3. Labor Violations

Be sure to keep yourself up to date with state and federal labor regulations. While it may seem obvious that anything over forty hours is considered overtime, you’d be amazed how many private employers take advantage of their workers without paying overtime.

This can land you in some pretty hot water with state authorities, and with enough violations, even cause your company to shut down. It’s also important that you make the work site as safe as possible, giving your workers ample opportunity to avoid accidents. Unusually unsafe work environments aren’t generally liked by state authorities or judges during a settlement.

4. Contract Violations

If you breach a contract with either one of your contractors or the company you’re building for, you could be held liable financially. Pay close attention to the details of your contracts; including deadlines, requirements, and specific requests. When you’re hiring private contractors to work for you, it’s a good idea to have something in writing should any problems occur. That way, all expectations and agreements have been laid out and signed for by both parties.

Try to avoid delays as much as possible, but if you run into a delay, let your client know immediately. A well-informed client is less likely to be upset when a delay arises, since they’ll know about it and won’t have to find out from some third-party or through their own investigation.

5. Bad Contractors

Bad contractors are a serious liability. Without the right experience and credentials, you could potentially be hiring someone with absolutely no knowledge in the construction field. When hiring contractors, always check references and paperwork. Be sure they actually have any credentials they’re boasting, and be sure to perform background checks on your workers.

When you hire the wrong people, the job doesn’t measure up to the quality standards you or your clients have set. Besides increasing your overall liability, this also puts a bad mark on your reputation. Future clients won’t want to hire someone who doesn’t have a good team behind them.

The Bottom Line

Construction can carry many liabilities, but with the right planning, tools, and team behind you, you’ll be able to successfully navigate any issues and avoid liability as much as possible. Keep your workplace safe and always check your contractor’s credentials before making a hiring decision.