High-caliber, competitive contractors make strategic investments that help set them apart as reliable and valuable partners. Among these investments is technology. Of course, contractors who have made this investment are already aware of the benefit of using software to keep projects on time and on budget. But many are just beginning to understand how their own data can create a flywheel that drives a stronger safety culture and an improved risk profile in the eyes of insurers.
And since insurance is one of the biggest costs on a project, contractors with bigger budgets are using data strategies to lower insurance costs and get more coverage.
As nebulous as it sounds, starting your journey of using data to strengthen security programs and improve insurance outcomes is easier than you might think. This is because the operational data you already capture can improve your understanding of your performance in relation to risk mitigation.
In doing so, you will reveal areas of success and opportunities for improvement. By translating these ideas into action, you will push the steering wheel of risk reduction. Not only can you use the data to create safer and more profitable projects, but it can also lead to favorable insurance rates and broader coverage. Here are tips to get you started:
Almost everything you collect is an indicator of risk.
When looking for data points to help you assess and manage risk, start with anything you capture in your software that includes workflows or completion dates. Many successful risk managers look at observations, shipments, change orders, inspections, daily records, and more. Consider, for example, requests for information (RFI). As you analyze your RFI data, note when they are happening and how quickly they are being responded to. If they take a long time, this means there is a greater likelihood of rework and schedule delays, which increases the chance of incidents occurring. In fact, some people refer to RFIs as “Risk Frequency Indicators”. These data points allow you to see where your company might be missing the mark and where your staff can make improvements.
The role of the risk manager is evolving.
Historically, a risk manager’s responsibilities included buying insurance and handling claims. However, the modern role of a risk manager has moved away from “handling insurance” to become a trusted advisor to the C-suite. Risk managers have a deep understanding of revenue and exposure, and can advise on operations and strategy to bring value to the table. Access to technology and data is further accelerating this. Risk managers now have a historical view of where risk tends to infiltrate and can use it to make better decisions and implement practices so that risk management becomes proactive rather than reactive.
Risk management is a shared responsibility.
Companies without a risk manager should leverage both internal and external teams. By spreading risk awareness throughout the organization, everyone in your company can become a security champion. To get started, rely on the outside expertise of vendors, consultants, and partners who can help you build teams to identify and manage risk. Then, as your business grows, you can add a risk manager.
Keep an open dialogue with your broker and your underwriter.
The insurance landscape is evolving, with some taking an entrepreneurial approach beyond using conventional underwriting models. To take advantage of this change, you should encourage transparent conversations with your broker and underwriter to build trust. Rather than demonstrating that you have a safety manual or merely checking boxes, you should shed light on how your safety practices have a tangible impact on the workplace. You can contribute to the underwriting process and weave a favorable narrative by demonstrating that you have a track record of efficient and effective operations enabled by technology adoption.
The future of risk management is already taking shape.
The emergence of artificial intelligence, insurance technology, risk technology and construction technology are collectively improving safety in the construction industry. For example, monitoring devices can track equipment and workers. Water detection devices alert when an intrusion or leak occurs. These tools allow you to respond and intervene immediately. Digital documentation and record keeping can help you ensure compliance. AI can help identify patterns and trends so you can proactively change your operations, prioritize preventative measures and mitigate risks before they happen. The integration of these technologies significantly reduces the possibility of human error, improves security protocols and reduces incidents.
