Business insurance

How agents can help construction clients prepare for post-pandemic growth

Nearly a decade of continued growth in the construction industry was halted in 2020 as the industry battled the direct and collateral effects of COVID-19. According to the recent Nationwide Agent Authority study, seven in ten construction business owners have been negatively affected by the pandemic, with the biggest impacts on their company’s total revenue, the ability to bid on new projects and the number or number of employees.

However, despite these impacts and many lingering challenges ahead, business owners are confident about peak 2021 season and a near-term rebound for the industry and their business. Eighty-four percent of business owners are optimistic about the strength of the 2021 peak season, and about half anticipate higher demand compared to 2020.

As post-pandemic demand for construction services increases, insurance agents can play a key role in ensuring clients have adequate preparation and protection to keep operations on track. .

Challenges ahead

Although business owners have withstood the 2020 tests, few see an easy path to follow. In fact, 58% of construction owners surveyed expect it to be even more difficult to report on the health and safety of their employees compared to 2020 and 55% expect it to be even more difficult to report on the health and safety of their employees compared to 2020. or more difficult to access the resources necessary to complete the work. The pandemic has also put a strain on the construction labor market, and about half of business owners expect it to be more difficult to find reliable subcontractors or enough workers to meet project demand.

Insurance is also a priority for business owners – 85% have changed at least one of their insurance policies in the past 12 months and three-quarters are still worried about having the right policies in place to protect their business. business.

Construction owners need highly specialized agents and carriers who understand their operations and are ready to respond to the unique challenges they face. Here’s how construction-focused agents can help their clients prepare for the surge in post-pandemic demand.

Recognize new and changing exhibits

Many construction business owners have been forced to change the way they run their businesses to accommodate the impacts of the pandemic and changing customer needs. Eight in 10 business owners say they have adopted different strategies or changed their operations in the past 12 months for reasons of continuity or efficiency. More than three-quarters also expect their company‘s peak season to start or end outside of its regular season.

Agents are essential in helping construction clients understand the impacts that changing operations can have on their hedging or risk management needs.

By checking in with clients regularly and asking the right questions, agents can ensure they have a complete picture of client operations and any changes that may need to be addressed.

For example, many contractors had work in progress when the pandemic first hit and much of that work is now ending. What works do they offer now? Is it similar to their normal operations or is it new or different?

Emphasize the importance of planning

The pandemic has highlighted the need for increased business planning among building owners to prepare for the unexpected. More than one in five homeowners did not have plans to help their business weather a potential recession, manage job site closures and reopens, or have enough workers to meet project demand.

Agents can reaffirm their value and build stronger, longer-term relationships with clients by proving they are a trusted business advisor, not just an insurance advisor. Here are some ways to do it:

  • Partnership with customers and carriers to create business continuity plans;
  • Strengthen customer safety and loss control efforts with information or resources on scale alternative programs, trench safety and risk transfer; and
  • Help clients implement a successful return to work program.

One-third of business owners are also interested in their agent’s advice on the latest trends in their industry. With over 30% of business owners feeling under-prepared to meet demand in 2021, these efforts could go a long way.

Driving fleet safety with telematics

The safety of employees driving company vehicles is a top concern for 77% of business owners and more than a quarter have experienced fleet vehicle accidents in the past 12 months.

At the same time, the survey found that around six in ten miss opportunities to improve fleet safety and derive operational benefits from vehicle telematics systems. Agents have a great opportunity to engage construction customers on the benefits of telematics and dash cameras.

Originally developed for the trucking industry, telematics systems have evolved to such an extent that it looks like they were designed for construction.

Today’s systems allow business owners to easily monitor vehicle usage and condition, as well as track the location of motorized and non-motorized equipment like bulldozers, skid steers or compressors. air. Additionally, telematics can help improve employee driving behaviors by monitoring speed, hard braking, cornering and hard acceleration to reduce the risk of an accident or injury on the road.

Reinforce smart hiring practices

For many years, the industry has faced challenges associated with a labor shortage and high demand for skilled workers, and COVID-19 has exacerbated these issues for many construction companies. Three-quarters of business owners we surveyed fear they won’t have enough employees to meet demand, and as a result, 70% say they have, will, or could relax the selection criteria for new employees. and drug practices to account for the lack of qualified candidates. .

While lax screening can ease the strain on a company’s workforce, these steps can also open the company to a host of costly exposures, including liability for injuries or problems. quality of work. Officers should stress the importance of maintaining strict hiring practices and following best hiring practices, such as developing a strong and clear job description and taking time to assess the skills of the employee. a potential worker. Agents can also share resources to help construction clients find good subcontractors.

Advise clients on the use of technology

With increased reliance on virtual technologies over the past year, many construction business owners have invested more in technology to strengthen their businesses and meet changing needs. Ninety-two percent have invested in technology in the past year to meet changing customer needs and 83% have done so to keep their business going.

As cyber threats become more prevalent with technology in the office and on-site, officers should also advise construction clients on the safe and efficient use of technology in their operations and ensure that employees are properly trained to recognize and defend against cyber attacks.

About a quarter of construction owners say they have faced a cybersecurity threat in the past 12 months and that cyber attacks are a major concern for their organization.

Construction owners have great confidence in the advice they receive from their insurance agents, but 87% say it is difficult to find an agent who specializes in their industry. As construction clients get back on their feet and prepare for a busy season ahead, it’s important that officers find opportunities to share their expertise through proactive and advisory advice. About nine in ten construction owners are looking to build long-term relationships with their agents over time and these steps are a great way to ensure those relationships have a solid foundation.

McMurtrie is the President of P&C Insurance at Nationwide, where he leads all aspects of Commercial P&C insurance including product, underwriting, claims, service, sales and distribution.

The subjects
COVID-19 Construction Agencies

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