What do the drastic changes in the weather condition mean for a construction company? Climate change brings adverse impacts to the business sector through unprecedented disasters. That is why insurance policies are an essential part of a business to protect them against unexpected events like natural calamities.
This article gives an in-depth discussion of how can a construction firm mitigate the effects of a disruptive weather pattern like La Niña through the help of a business insurance broker in Melbourne. Read more below.
La Niña by the Numbers
La Niña weather pattern has officially returned, according to the Bureau of Meteorology (BOM), bringing cooler, wetter weather and often floods.
Expect this pattern to deliver above-average rainfall for Australia’s east and north during spring and summer. The BOM’s also found out that the peak will occur in spring.
East coast storms and floods have led to almost $6 billion in insurance payouts in the past two years. Whether you like it or not, this weather pattern is worth preparing for. Let us take a look at what your construction firm can do to stay on top of this circumstance.
What Does La Niña Mean to the Business Sector?
Construction companies accounted for over a quarter of business insolvencies in Australia in 2021. It was mainly because of increased building costs, extended interest-rate, distressed supply chains, shortage of skilled workers, and extreme weather events.
According to a report, Australia’s construction industry reduced in size in three months until the end of August. The latest La Niña weather pattern increases concern for the construction sector looking to recover. La Niña increases the chances of the following threats:
⦁ Delayed projects
⦁ Scheduled blowouts (time and cost-wise)
⦁ Reduced cash flow to pay trades and suppliers
A rainy day could cost up to three weeks if it falls on a bad day, such as when doing a pool dig. Other builders’ estimates found that 5% of their annual turnover last year was caused by La Niña, and the wet weather forced them to reschedule work six times.
Mitigating Wet-Weather Hazards
Risks construction businesses have to manage on their worksites:
⦁ The collapse of excavation or trench
⦁ Sediment runoff from the worksite into storm drains and local water systems
⦁ Slip, trip, and fall hazards because of mud and water-logged soil
⦁ Loss of control of portable plants (cranes and elevated work platforms)
⦁ Electricity-related incidents caused by a damaged equipment
As part of the start-of-workday risk assessment, inspect the worksites to ensure the ground is stable and the foundations are secure, Worksafe Victoria advised. It is ideal for marking the soft ground with flags, bollards, or top with crushed rock. Also, get help to recover bogged equipment and encourage employees to work with others. They should have a phone or radio for communication.
Set Realistic Client Expectations
Provide flexibility with building schedules by applying the following:
⦁ Have contingencies in place
⦁ Don’t over commit
⦁ Communicate with suppliers, trade contractors, and clients transparently and regularly
⦁ Deal with disputes promptly and diplomatically
⦁ Avoid fixed-price contracts as much as possible
Construction Work Insurance, a.k.a. Contract Works Insurance
Investing in construction works insurance is another essential way to manage your risks in the face of La Niña.
Reaching an expert to help a business manage risks is vital. Companies have many business insurance coverages, like cybersecurity or commercial property insurance, depending on the unique business requirements.
A construction firm may turn to a business insurance broker in Melbourne to be guided in construction works insurance, which protects their build project from:
⦁ Storm
⦁ Hail
⦁ Cyclone
⦁ Flood
⦁ Accidental damage
⦁ Fire
⦁ Theft
⦁ Malicious damage
Construction works insurance covers legal liability, material damage, and losses to the building project caused by insured events. It may include public, and product liability cover. Construction works insurance helps deal with a broader range of risks than a wet weather pattern policy. Talk to a public liability insurance broker to learn more about public liability coverage.
Talk to a Business Insurance Broker in Melbourne Now!
Reliant Business Insurance can tailor a policy to suit every business’s unique needs. Call us on 03 8905 4753 or email info@reliantbi.com.au. Our website also contains a detailed run-through of who we are and our services. Visit www.reliantbusinessinsurance.com.au.