A spate of crane collapses at construction sites throughout Canada in recent years cost lives, caused millions of dollars in damage and renewed calls for improved safety requirements. Despite the headlines and public angst over the dangers of cranes, the industry should be more concerned with the bigger threat to job sites: Flooding, fire, thievery and vandalism.
Effective planning — with human and technological assists — is crucial for creating a safe and secure construction site. When general contractors check all the boxes — particularly for large projects — they are not only protecting their asset and workers, they’ll also be positioned to secure Course of Construction (COC) insurance with the best rates and coverage. Here’s what’s important to know.
Use strategies to stop the spill
Water damage events continue to plague the construction industry. Whether it’s a leaky pipe, malfunctioning sprinkler systems or an act of Mother Nature, these incidents account for nearly a third of all construction losses and cost insurers about $2 billion a year.1
The water damage mitigation requirements of insurers vary significantly, but to become a best-in-class risk, construction companies need to create in-depth, detailed water control policies that include detection solutions, response plans and remediation.
Effective plans will revolve around physical and mechanical intervention. This could include a security guard trained to identify water intrusion or flow detection devices that automatically shut off the water supply if it is identified.
More insurers now require policyholders to invest in Internet of Things (IoT) solutions, where sensors monitor, detect and warn of water issues in real time.
Promote fire prevention
Fire is another ever-present construction risk. Frame buildings are particularly vulnerable during construction: heat, flame and sparks generated from tasks like grinding can smolder and flammable solvents can cause a small flame to escalate quickly.
Arson is another significant threat. And because buildings aren’t protected by firewalls or sprinklers during construction, a minor flame can quickly escalate to a total loss.
While COC policies cover fire losses, insurers are increasingly requiring policyholders to develop sophisticated fire prevention plans. These plans should cover safety procedures for fueling, preventive maintenance with repair histories documented, combustibles storage protocols, hot work permit requirements, fire watches and strict smoking restrictions.
Regular site inspections should be conducted, and fire-fighting water and flame extinguishing supplies should be readily available. Workers and security guards also should be trained in fire-fighting basics. Implementing technological solutions such as infrared camera and monitoring systems is another good way to prevent a fire loss.
Secure the site
Heavy equipment, power tools and expensive materials and supplies including copper tubing and lumber make construction sites an attractive target for criminals. Contractors lose an average of $45 million annually from construction site theft, and only about a quarter of stolen equipment is ever recovered.2
The more planning and construction site safeguards a company puts in place, the more protected a site will be from criminals, and the more easily COC coverage can be secured. At a minimum, sites need motion-activated, high-powered lighting, warning signage and sturdy fencing around the site.
Implementing IoT security cameras that conduct real-time monitoring and maintaining around-the-clock security personnel also are effective deterrents.
Contact HUB International’s construction insurance experts to learn more about protecting your construction site.
1 Canadian Underwriter, “Water IoT: A game-changing water monitoring technology for high-rise construction projects,” October 1, 2022.
2 Mitsubishi HC Capital Canada, “Construction Site Theft Prevention: Advice for Canadian Contractors,” September. 24, 2021.