The construction business is one of the most complex ones in the industrial sector due to the involvement of machines and equipment on a large scale. Their use increases the risks of accidents at the site. A construction project includes complex and time-consuming procedures with deadlines that can be tough to meet due to the many prospective risks the business might face. India’s construction industry employs a workforce of nearly 32 million and its market size is worth about Rs. 2.48 crore. It is the second largest contributor to the GDP after the agricultural sector.
However, everything is not as great as it might seem. Frequent cases of under-construction buildings collapsing in several states of India have increased that have led to the death of several workers on the site. In a similar incident in Bengaluru in 2017, eight workers were severely injured when a 3-storeyed building under construction partially collapsed in a tech park in White field.
Read More: Why do you need Commercial Property Insurance?
All the above incidents and stats prove the fact that it is very important for construction business owners to assess prospective risks and take significant measures to curb the same. Below are some of the risks to consider if you run a construction company:
The bankruptcy of a key supplier
- In a construction business, time is very precious and deadlines are meant to be met.
- The most important thing required in the building is the raw materials.
- There might be a single supplier for a particular project or multiple suppliers working on a single project.
- But, if a key supplier’s financial position is not good, it can always pose a risk to the construction project he is involved in.
- In case he becomes bankrupt and refuses to remain a supplier, the business owner will be left to deal with it and as a business owner, you may have to replace him which may take some time.
- This can lead to the delay of the construction beyond the prescribed time limit.
Natural perils like floods
- Natural perils like floods, earthquakes, and cyclones can cause havoc with the entire city. There is proof of the same in the 2015 South India floods which led to a total financial loss of up to $15 billion.
- As an owner of a construction business, one needs to be prepared for such unforeseen circumstances. One of the ways to do so is to invest in a suitable construction all-risk insurance scheme that is available as a comprehensive cover or as a customized policy.
Use of low-quality material (increased chance of collapsing)
- Even though, as a law-abiding owner, you might claim to have used the best-quality material, do not forget that the other parties involved might not be as clean as you think.
- The use of low-quality materials in construction can prove to be dangerous with an increased chance of collapsing during heavy rains and cyclones.
The design has gone wrong:
- A faulty design can also be the reason for accidents on construction sites.
- If a worker builds a compound area at a low level, it will automatically increase the chances of damage to it.
Nuclear tests are being done on the premises
- It is often seen that places used for constructing a new building are on the outskirts.
- But, one must also ensure that no hazardous nuclear tests are being done nearby which might lead to poor health of workers or damage to the building.
Other common prospective risks that a construction business might face are the death of a key manager, accidents of workers on site or third party, and collision with vehicles or animals entering the property. The result is that the project is delayed or is not properly constructed which leads to a huge loss of business income. The collapse of a building under construction due to natural perils can completely ruin the prospects of rebuilding the same project in the same area. One needs to be prepared for such risks and if possible, suitable measures need to be taken which may include:
- Use of earthquake-resistant materials
- Planting a lot of shrubs around the place of construction
- Using proper signboards at night to prevent collision
- Form a firm contract with all the related parties like the vendors
- Use the latest technology to decide on a good design
- Insure your buildings under construction through a Construction all-risk policy and get the most-needed financial security for any kinds of prospective accidents that occur on-site or liabilities that may arise.
As precaution is always better than cure, owners of a construction business must ensure financial security for themselves through a comprehensive insurance policy apart from taking all the required safety measures. This is because they cannot control everything that might lead to damage to their building under construction.
Read More: Key Exclusions one should be Aware of before taking Construction All Risk Insurance
How to Buy?
It is feasible to buy construction all-risk policies online with just a few clicks of the mouse. To purchase the policy, you can visit the online portal of SecureNow, fill in some basic details, like your nature of business, the risks to be covered, etc.; and buy your policy instantly. In most cases, the insurer issues the policy within a day if all documents are in order. Moreover, SecureNow is helpful not only at the time of buying the policy but also at the time of claim settlement.
