Keep Your Contractor Business Safe with These Precautions

Being a contractor can be a profitable line of work. Home renovations and buildings can earn you thousands of dollars on every project. The problem is that it can be hazardous, too. For example, accidents can happen and your clients may hold you liable. Therefore, every contractor should be taking steps to protect their business from various issues. Here are some precautions you should take.

Have an ironclad contract

You first need to ensure that you have a contract that protects you and your client. After that, your focus is mainly on you. There are several things to do when it comes to handling any contract. For one, you need to read and understand it. Reading should be easy, but understanding can be more of a problem. If possible, you should take a copy of the contract to a lawyer so that they can review it. Then, they will be able to point out any problems with it before you sign. In addition, it should allow you to make any modifications if possible.

Get the right insurance

There is also the insurance you can get to protect your business. The cost of general contractor insurance policy is very affordable and can protect you from a wide variety of accidents. It is a solid investment, but not all policies are equal. Similar to how you treat your contracts, you should read and review the policy. Your insurance agent will be happy to point out what the various policies can do for you. Evaluate and compare which one will be best for your business.

When considering what policy to use, you should check what exactly they protect you from. Most contractors only get general liability insurance. It will protect you from liabilities in case of any bodily harm or property damage to a third party. For example, a passerby gets hit by falling material from your construction. However, you should also get two other types of insurance. One is worker’s compensation insurance, which should protect your workers and your business if an employee becomes a victim of an accident. The insurance payout will compensate your worker instead of you having to pay them off. Next, there is the general builder’s risk insurance. Employees are not the only victims of on-site accidents. You may lose equipment and materials to accidents, and it can be damaging to your revenue if you have to pay for them.

Always keep solid records

Disputes might come after or during a contract. For example, your client might think you are not doing your best or cheating on materials. If such an accusation sticks to the company, it can ruin your business’s reputation. To protect yourself from allegations of wrongdoing, the best defense is to keep a good set of records. It would include your expenses, work hours, and more. However, for accuracy, you need to go beyond paper records. Digital documents are better and have more storage options. You can also quickly check on them from anywhere.

Identify potential risk

Risk prevention is a good strategy to protect your business. It is cheaper to take this approach. However, to properly prevent any risks, you’ll need to do a basic audit of your worksite and project. For example, if your project will require you to build a multi-floor building, then you might have to take additional care to prevent slips and falls. A professional safety inspector can be a big help when trying to predict what risks you face in your new project. Don’t limit yourself to accidents. Do some research on the location’s history, too. You might discover things like flooding or something similar. Being ready for that happening can ensure that your project ends successfully, which is good news for your bottom line.

Implement and install emergency plans and systems

Since you are now familiar with the potential risks in your project, you should consider what your team would do if the worst happens. Having a definite idea of the risks allows you to train and implement various contingencies. For example, with the risk of accidents, having a trained medic on the site with excellent first-aid equipment can help ensure that accident victims get prompt treatment. Besides first aid, other emergency systems should also be in place. Disaster preparedness and fire drills can ensure that your workers can respond quickly and reduce the damage to the worksite. It can also help with liability issues if someone files a lawsuit. You can honestly say that you did your best.

Legal help will always be welcome

Finally, having a lawyer on retainer is always a good idea. There are a variety of legal issues that you might encounter as a contractor. Knowing that you have a skilled attorney on your side can be reassuring, whether when you face an angry client or a disgruntled customer. A retainer fee is an excellent price to pay every month to ensure that you can always call a lawyer for advice. Don’t hesitate to contact them either. It is better to go in fully informed about things.

Make sure clients pay on time

An essential part of running a business is making sure it keeps on earning money. If your clients don’t pay, then your business will not have the funds to operate. It is normal for late payments in the construction industry since most clients cannot pay everything upfront. The problem for many contractors is how to get clients to pay up. The best way is to make it an ironclad part of any contract with you. While having your team contact them before the payment is due can be a good idea, late payment penalties ensure that clients will try to pay on time.

Final thoughts

Running a business is more than making a profit. It would help if you protected it from various dangers like disasters and accidents. The threats to your business all depend on the industry it is in. With the precautions above, you can ensure that your contractor business will be safe from the various dangers on the market.