by Bill Tepe, President, NBIS
As we enter 2022, we’ve been thinking about how absolutely essential it is, now more than ever, to carefully consider the state of your organization as it moves into a new era. The last two years have disrupted life as we all knew it, and the coronavirus pandemic has created a new business landscape. The time to thoughtfully consider how your business navigates risk is now. After the Great Pause and the Great Resignation eras are over, we anticipate a time of reopening, improving, and, in some cases, rebuilding infrastructure (from roads to bridges and beyond) across America. Despite the tumultuous nature of the economy over the last 20 months, heavy construction industries have remained steadfast, with many companies still on the job and looking ahead to new projects in this new year. It’s good news for just about every industry, and related public and private operations.
However, while we can expect heavy construction’s momentum to remain strong, we can’t ignore the extreme difficulty of predicting the way things will unfold across the globe in the next year and beyond. This new world presents new challenges. As we emerge from the pandemic era, constraints caused by lingering supply limitations and skilled labor shortages across multiple regions persist. Many companies in the global construction industry are planning work out five to 10 years in advance, taking advantage of the U.S.’s recently passed Infrastructure bill and the European Union’s recently passed Recovery and Resilience Facility, a direct mitigation measure in response to the social and economic impact of the coronavirus pandemic.
In fact, it has been projected in Oxford Economics’ report Future of Construction1 that by 2030, the U.S. will rank second in the top 10 global construction markets, ahead of India and just behind China. This projection alone gives many domestic concrete pump operations hope for steady work over the next decade or two. In light of this, we suggest focusing on the three risk management areas outlined below. This will help your company and our industries as a whole stay safe and stay on the job, even in what Allianz Global Corporate & Specialty called, in a November 2021 report2, the “new age of construction risks.”
AUTOMATE YOUR RISK MANAGEMENT PLAN
We know you’re inundated with paperwork. From daily work/rental tickets and fleet maintenance records to individual employee training, there’s an endless stream of documentation you have to manage. Many of us faced the immediacy of digitizing communication throughout the height of the pandemic in both professional and personal settings. Digital interactions are now, in many cases, a social norm. It’s evident in the prevalence of everything from touchless shopping to e-signature and electronic packaging of once paper-based contracts that deal with complex transactions. And since there is no shortage of apps and services that can digitize your operation, it’s important to gain clarity around what services you really need.
Our risk managers at NBIS recommend the following risk automation efforts:
This is especially critical because these contracts themselves contain a number of valuable provisions and clauses, designed to transfer risk and qualify operator expectations — oftentimes, language that requires change faster than your current paper-based, pre-printed forms can be expected to accommodate. Digitization immediacy is the name of the game for training, fleet management and contract provisions.
STAY ABREAST OF LABOR SHORTAGES AND TRENDS IN YOUR REGION
As we all know, labor shortages in our industry continue to be a significant issue. Make it a priority to partner with local and regional industry-specific government agencies to stay ahead of trends in your area. Every area has trade-based labor challenges, and they seem to multiply with each additional level of certification required for a given position within your company. Trade-focused associations, like the ACPA (American Concrete Pumping Association), advocate on many fronts for our industry and often regularly report on labor solutions and changing trends.
Staying in touch with your member associations, nationally and locally, will give you early warning on impending threats to labor. Typically for companies in our industry, your labor force is highly specialized and loyal. Despite this, a variety of factors challenge the loyalty of workers — and it’s up to you to do all you can to mitigate these threats to labor retention.
LEVERAGE YOUR COMMERCIAL INSURANCE BROKER/AGENT, NOW MORE THAN EVER
As a flood of new and large equipment arrives in the U.S., and large, complex projects are being contemplated, insurance markets will be impacted and have the potential to harden quickly. Maintaining a routine check-in with your insurance broker/agent could prove more valuable than ever these next three years. Large insurance markets retain analysts to monitor equipment purchasing trends and forecast losses; leverage your broker’s view of the economic landscape as it relates to your coverage and endorsement working by state and wording restrictions for owner controlled insurance placements (OCIP) and placements involving public private partnerships (PPP). Large Infrastructure projects also introduce contractual complexities such as master services agreements (MSAs) that could place limitations on your company’s ability to transfer risk on the job site.
At the end of the day, your insurance broker/agent should be your trusted partner, ready to help you navigate an ever-changing economic landscape. The NBIS Risk Management team and our broker/agent partners are ready to help you navigate these challenging times into 2022 and beyond. For more information and details on risk solutions offered to our policyholders, visit our website at www.NBIS.com or call (877) 860-RMSS.
1 Oxford Economics/Haver Analytics, Future of Construction, Marsh & Guy Carpenter
2 Managing the new age of construction risk, 10 trends to watch as the sector builds back better, Allianz Global Corporate & Specialty