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Construction Industry Changes Require Dynamic Risk Management

Jeff Chronister-Construction Industry Changes

Owning and operating a construction company in today’s world is remarkably challenging,” said Jeff Chronister, Accredited Advisor of Insurance (AAI) with Ollis/Akers/Arney. He cites aggressive competition, rapidly changing economic conditions, limited labor force and the evolving expectations of employees over the past few decades.

“Owners have to wear multiple hats. Sometimes they have to be the lead salesperson, the project manager, the marketing person and the CFO all at the same time, so their time is important.”

To ensure that clients stay up to date with emerging risks in the construction industry, at the beginning of every year Chronister meets with clients to look ahead through the coming 12 months to see what clients should be planning for and creates a strategic plan. Subsequent quarterly meetings address issues identified in that process. “We put together a long-term strategic plan with them, bringing things to the table that they can use when they need them. It’s a dynamic document that can change when new issues arise.” He mentioned that no one was expecting to still be addressing a pandemic in the fourth quarter but having that dynamic document was key to helping clients keep employees safe while still running a profitable construction company.

“My goal as an advisor for Ollis/Akers/Arney clients is to understand their operation. This means understanding how they make money and understanding the specific risks that are unique to their operation. We also want to know their level of expertise and what kind of plan, if any, they already have in place to handle any risks and challenges that should arise.”

“It’s from an insurance standpoint but also from a basic risk management standpoint,” said Chronister. “Some of the things we think about with them are not necessarily specific insurance concerns but are tied to insurance.” As an example, he mentions that contracts are becoming more complex than ever. “They’re constantly being tweaked and changed. I help clients review those from an insurance standpoint but also to make sure they’re in compliance with all the requirements. We’ve caught many things that could be devastating to a business if there weren’t something in place to protect them.”

Ollis/Akers/Arney also works with construction companies to provide training in safety, which is always the top concern in the construction industry, but even more so now during the COVID-19 pandemic. “Now we’re not only training to avoid workplace injuries but also how to run a job site with social distancing and other health recommendations.” This can be difficult when so many tradespeople tend to be on a job site at the same time. He said that if a job site is required to shut down due to a COVID-19 outbreak, the repercussions could be far reaching. “It could lead to a total shutdown of the construction company which could be devastating.”

“Having a written, documented plan in place on how to address any risk is crucial. We have a strategic approach to putting a plan in place for a client. We think ahead, plan ahead and expect the unexpected.”

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