Preventing Losses - Tips for Contractors

At Merchants Insurance Group, we believe your insurance protection should be cost effective too! By helping you identify hazards and prevent losses, we're giving you the tools to control your insurance costs.

Avoid Legal Hazards

Require written contracts for all work you perform. Retain copies of contracts for at least three years.
Have contracts and warranties reviewed by your attorney. Do not accept/assume responsibilities you are not familiar with.
If you hire subcontractors:
- Have written contracts with subcontractors, with requirements for them to hold you harmless, indemnify, and defend you against any claim or liability arising from the performance of the contract.
- Require each subcontractor to submit certificates of insurance for liability and workers' compensation coverage, prior to beginning a job. Certificates should show limits of liability (if applicable) at least equal to the limits of your policies, indicate a policy period covering the period(s) of time work will be conducted, and be kept on file for premium auditors.
If you are working as a subcontractor, specifically limit contractual agreements for you to hold the owner or general contractor harmless, indemnify, and defend them against any claim or liability arising from the performance of the contract, to the work you perform.
Have licensed professional engineers or architects design and/or approve project plans and specifications.

Prevent Losses on the Job Site

Use employment applications and check references of prospective employees. (Applications available at most office supply stores).
Provide written safety rules and enforce them! Safety rules should be based on OSHA, or other government agency safety requirements and accepted industry practices. Areas of particular concern are:
- Full Protection (Work at heights)
- Lock-Out / Tag-Out of Energy Sources
- Confined Space Entry Program
- Hazard Communication Program
- Personal Protective Equipment
Employees should have similar job experience, or be provided training in any job they may be assigned.
Assign responsibility for safety to a supervisor or foreman.
Hold regular safety meetings.
Conduct periodic safety inspections.
Review the safety practices of all subcontractors you have hired. Be sure they meet the same standards you have established.
Have a first aid kit available.
Post emergency phone numbers and have a phone available to summon help in the event of an emergency.
Have fully charged, easily accessible, portable fire extinguishers.
Provide protective equipment such as safety glasses, hearing protection and hard hats. Enforce their proper use!
Secure the job site! Fence the site to prevent vandalism and public access to hazardous areas. Control access to customers and their vendors. Provide lighting when possible.
Barricade work areas and provide warning signs near excavations and other hazards.
Secure equipment and materials left on the job site. Lock tools in boxes and secure large equipment with chains. Limit tools and materials left on the site as much as practical.
Store/handle hazardous materials properly. Protect containers from damage and secure tanks in an upright position. Use safety cans for gasoline and other flammable liquids.
Practice good housekeeping! Remove scrap and debris daily. Limit the accumulation of sawdust.
Store waste materials and dumpsters well detached from buildings.
Follow precautions for welding and other hot work. Shield or wet combustible surfaces. End such operations at least 30 minutes before leaving the site unoccupied.
Temporary heating units should be UL/AGA approved. Follow manufacturer's suggested precautions and provide adequate clearance from combustible material.
Have procedures for reporting and investigating incidents and accidents. Lessons learned even from "near misses" may help to identify ways to avoid future accidents.
Require proper use of ladders and scaffolds.
Limit the exposure of adjacent properties to damage and comply with all building and environmental codes.

Prevent Losses on the Road

If employees drive your vehicles, or drive their own in the course of work, have your agent check their driving record.
If your employees drive their own vehicles in the course of work, verify their insurance coverage and make sure their limits are equal to your insurance.
Provide written driving safety rules to anyone who operates a vehicle.
Have procedures for reporting and investigating accidents.
Develop written preventative maintenance procedures for all vehicles and equipment.

Vehicle Safety

The following are common safety rules that many companies use to ensure safe operation of their vehicles. Their implementation and enforcement may help you avoid accidents and lower your insurance costs.

Only designated employees should operate company vehicles.
Driver's license numbers must be provided and are subject to periodic record checks.
A revoked or suspended license must be reported to a supervisor.
Drivers must adhere to all laws and regulations pertaining to the use of the specific type of vehicle they are operating, including requirements for special licenses or permits.
Accidents of any nature or severity must be reported immediately to a supervisor.
Tickets for any violation must be reported to a supervisor. The driver is personally responsible for any fines or penalties resulting from the manner in which they operate the vehicle.
Drivers are responsible for inspecting and verifying the safe operating condition of their vehicle at the beginning and end of each workday.
Unsafe vehicle conditions must be reported to a supervisor.
All speed limits and traffic laws must be obeyed. Speed should be reduced as road conditions warrant (rain, snow, construction, etc.).
All lane changes must be signalled. Flashers should be used when stopped on a roadway or when traveling well below the posted speed limit.
Operation of any vehicle while under the influence of alcohol or drugs, including prescribed medication that impairs ability to drive, is strictly prohibited.
Courteous behavior should be maintained at all times.