Can Contractors Get Insurance For Lost Productivity Costs?

Do you know what your policy states regarding insurance for lost productivity? During 2018 the Western Washington construction came to a standstill for 17 days due to workers downing tools. This is one of many examples of how the construction industry is vulnerable to lost productivity. 

Lost productivity can incur unplanned costs to your project due to fines imposed on missed deadlines, hiring additional staff to get the job done and more. This makes lost productivity insurance an important aspect of your insurance policy.

Causes of lost productivity in the construction industry

Lost productivity can be the result of both human as well as natural factors. This can result in the productivity rate to be lower than expected for the specific kind of construction project. 

1. Adverse weather conditions over a long period can result in work to stop.  This can also result in flooding or other damage to the construction site. You might have to attend to this before work can proceed.
2. Union action is another concerning factor that affects productivity on a construction site. Strikes are an antagonistic way that construction workers can utilize to put their employees under financial pressure to meet their demands. Strike negotiations can last for days or longer and then productivity comes either to a standstill or is much reduced. 
3. Absenteeism is another way that productivity goes down. This can be due to illness, coming late or leaving early.  

The team that you have in your service affects the cost of productivity. When you have the element of people as a variant determining profit or loss, it is a risk that you need to deal with. This is why insurance for cost due to lost productivity can protect your business.

Benefits of insurance for lost productivity

You can discuss your insurance policy with your insurance agent to determine if it includes lost productivity insurance in your Against All Risk policy. 

1. There is no simple answer to determine the extent of labor costs for a project. Every project is unique with its challenges. In practice, the cost of labor varies for every project but you will know the additional cost due to lost productivity. If you have lost productivity insurance, it will be easy to report on your loss to submit a claim. 
2. The cost of temporary staff to complete a project within given deadlines is an unplanned expense. You can find out whether your insurance for cost due to lost productivity will cover this expense.
3. Companies often receive a contract for a project stipulating fines in the case of exceeding deadlines. This is another expense that you can discuss with your insurance provider. 

Is Builder’s Risk Insurance right for your business?

There are several ways that you might need protection when it comes to lost productivity. Your trusted insurance provider will be able to guide and advise you on your available options. 

For insurance advice you can trust call Builder’s Risk. Speak with a licensed agent 887 960 0221 now.