Construction is always evolving and keeping up with the latest trends is crucial for business owners. In this article, I’ll explore five of the current construction trends for 2023 and how they might impact your business insurance needs.
1. Continued Labor Shortage
The construction industry is facing an all-too familiar crisis – not enough skilled labor to satisfy the ever-growing demands of the market. This shortage has strained businesses and their ability to take full advantage of expansion opportunities, including diversification into new types of work and taking risks on more lucrative projects. Without access to reliable labor forces, many contractors have been left in tight situations–taking on smaller local jobs with higher profit margins to assure against failure.
The construction labor shortage impacts insurance in various ways. The increased risk of injuries and accidents due to lack of skilled workers can be costly for businesses, which means workers’ comp claims are likely to rise. Additionally, businesses may need to increase their coverage, as there is a greater risk of property damage and personal injury due to inexperienced workers.
At Kapnick, we have a variety of ways to combat the labor shortage, including risk management solutions and training to ensure a culture of safety, and benefits solutions to attract and retain employees.
2. Increased Cost of Construction Materials
The rising cost of construction materials is impacting businesses in the construction industry. With increasing prices for materials like lumber, concrete, and steel, it can be difficult to stay competitive in a saturated market. This means contractors are having to find creative ways to cut costs or take on projects with lower than usual margins just to stay afloat.
It’s essential to review your insurance coverage to make sure you are properly covered and that your policies cover the increasing costs of construction materials. You may also need to consider increasing your deductible or reducing coverage for some items to help offset rising expenses. At Kapnick, we can provide guidance on risk retainment strategies.
3. Greater Focus on Worker Safety
Companies are increasingly committing to creating a safe working environment for their employees, with advances in technology being used to mitigate risks in hazardous environments. This includes the use of modern safety protocols, such as the implementation of personal protective equipment (PPE) and hazard monitoring systems. At Kapnick, we have a variety of resources to help you establish a culture focused on safety, including:
- on-site loss control evaluations
- comprehensive claim reviews
- a web-based risk management platform with training tools
- and more!
A greater emphasis on worker safety and effective risk management strategies ultimately reduces claims and insurance premiums.
4. Digitization of Construction Processes
More companies are turning towards digital tools to streamline the construction process, from project management to design and fabrication. By utilizing technology, contractors can reduce costs, save time and increase safety. This shift towards digitization has made it easier for businesses to access important data on the worksite, while providing accurate real-time updates so projects are able to stay on schedule and within budget.
With a greater reliance on digital tools comes an increased need for cyber security insurance policies. Contractors must ensure they are adequately protected from any potential threats, as the consequences of a cyber-attack can be devastating. At Kapnick, we have excellent cyber insurance experts and tools to ensure you’re getting the best coverage for your needs.
5. Increase in the Use of Prefabricated and Modular Construction
Prefabricated and modular construction has become increasingly popular due to their cost-effectiveness, speed of assembly, low labor requirements, and ability to be customized. As more and more businesses turn towards these methods for their projects, it’s important that the insurance coverages are up to date. With prefabricated or modular construction there may be different risks associated with a project then what would be present with traditional construction, meaning specialized policies will need to be in place.
Understanding the current construction trends is essential for contractors and owners to ensure they are adequately protected against potential risks. By understanding and properly preparing for a shifting market, construction industry business owners can remain competitive.
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