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Posted on: November 10, 2022 by Huntersure
Natural disasters can produce a significant impact on the construction industry, causing delays and disarray. After a natural disaster, businesses in the construction industry may have to contend with severe hardships. Their existing and potential clients need their help more than ever, but their work could be better. Major setbacks on projects already underway and hastily coordinated projects to repair damage can increase contracting companies’ overhead costs. These occurrences also raise risk exposure dramatically.
Here are some key issues involving the effect of natural disasters on construction.
When an area has sustained a significant disaster, the demand for contractors’ services will skyrocket. People are desperate to get help to rebuild their homes. Until homeowners can coordinate repairs for damage to a roofing system or other structural elements, their properties are highly vulnerable to further damage.
A sudden abundance of available work presents a meaningful opportunity for contracting companies, but they need help to ramp up their operations with their existing resources. They might need to pursue additional lines of credit, hire more workers, and increase insurance coverage limits. Having adequate cash on hand and carrying professional liability for contractors equips businesses to take on big projects confidently.
In the aftermath of a heavy storm or flood, transportation and shipping routes may move at a crawl. Supply chain delays impede the delivery of essential equipment and materials. Being able to carry out work according to plan could present logistical and financial hardships.
Extensive damage to a community creates thousands or even tens of thousands of job openings. Both skilled contractors and laborers can choose where to work for, as well as who they work for. To staff their projects, construction management professionals must be aggressive and competitive about recruitment.
Supply and labor shortages may lead to higher project costs in a disaster area. When insufficient supplies or workers go around, companies have to be the highest bidder to access the needed resources.
Even when contracting companies are not at fault for an unexpected expense or setback, their clients could hold it against them or suspect that they are taking advantage of a disaster situation to inflate invoices. This tension is straining on client relationships and may fuel disputes about change orders or payment requisitions.
After a significant weather event, insurance agents will likely receive many questions about their clients’ current coverages. It is an excellent time to reach out to clients to review general liability vs. professional liability policy inclusions and project-specific insurance needs.
A surge in claims and losses puts carriers in the position of raising premiums. Agents have to be ready to give their clients personalized support and guidance.
Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.
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