Top Risks Facing Home Builders today
Home builders take on many risks with the job, from injuries on the job to defects in materials to and economic changes. Owning a small construction or contracting business can be a very satisfying way of making a living. You get to use complex tools, be your own boss and create practical spaces that homeowners are proud to call their own. The very things that make being a home builder appealing, though, come with serious risks that can affect your personal and professional liability. Which risks worry home builders the most today? Let’s take a look at some of the risks that could cause serious negative outcomes for you and your home building business.
4. Faulty Work
By its very nature, a construction business can be held liable for finished work that is discovered to be fundamentally unsound, not up to code or faulty in some specific way. If your construction work is found not to comply with State, Federal or local building regulations, your homeowner could lose money on the property and come to you for reimbursement. Clearly, no home builder wants to develop a reputation for doing bad work. The best way to demonstrate that your company follows building regulations for your geographic area is to carry a License and Permit Bond. If a mistake happens to occur, your homeowner can make a claim on your bond and your insurance provider can cover the damages. It’s important to note that unlike typical insurance schemes, you are required to pay back any damages your provider is forced to pay towards the claim.
3. Injuries
No matter how hard you work to ensure that a home building site is safe, a construction site is fundamentally a dangerous place where risks and potential hazards abound. Anyone can get hurt on a home building site, which means that your home building company could be held liable for damages. This is especially true for people who are unfamiliar with moving through a construction zone, but even decades-long veterans of the home building business can get hurt on the job. It’s important to always enforce safety regulations and train your employees on home building safety procedures to minimize the risk of an injury. However, it’s also important to protect your company from having to pay expensive medical expenses and court fees in the event of an injury. Your company’s general liability insurance is designed to protect you and your company in the event that a client or other third party gets hurt. However, if one of your employees or contractors is injured, the injury may be covered by your workers’ compensation insurance. All home building companies are required to carry this insurance in most states, regardless of whether they have employees or not.
2. Equipment Damage
A home building business is nothing without the complex tools and machinery required to construct a home in the first place. Without your equipment, a home simply cannot be built. Some tools can be quickly and easily replaced, but for those that are more complicated, a property insurance policy can help turn an equipment failure from a disaster into a minor nuisance. While this gives you some peace of mind, it’s still important to train workers on how to use, maintain and store equipment in order to prevent unnecessary damage.
1. Seasonal Slowness
The most damaging risk to any home building business may not come from risks or liability but the factors that are almost impossible to predict: the weather and the economy. Most home builders know that there is some slowdown in the home building business every winter. It’s difficult to dig in frozen ground and nearly impossible to work outside with complex tools and equipment in ice and snow. Even for home builders who operate in warmer climates, economic downturns can negatively affect your business as contracts dry up and development companies struggle to stay afloat.
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