(BPT) - For many contractors who work seasonally, winter may signal an end to their busiest time of year; for others, winter is the start of their busiest time. No matter when your busy season is, the annual lull in active projects presents an opportunity to assess business performance, set new goals, and streamline operations - and that includes managing your insurance.
As the in-house construction consultant at Acuity Insurance, John Lack leverages more than 35 years of contracting experience to help construction businesses improve important aspects like risk management, jobsite safety, project management and overall profitability. With a background in overseeing the construction of supermarket locations throughout the Midwest, Lack knows firsthand how critical it is for contractors to pair their service offerings with the right insurance coverage.
'Profit margins in construction are notoriously thin,' Lack says. 'The seasonal nature of the business means cash flow can fluctuate dramatically. The last thing contractors need during the slow season is insurance-related stress. Instead, insurance should be a tool to help them manage these transitions more smoothly.'
Lack offers a few key suggestions for ensuring contractors get the most out of their insurance, especially during slower periods:
- Optimize Workers' Compensation Premiums
For many contractors, the winter months can bring a dip in active projects, which impacts payroll and overall business activity. While you're addressing slow-season challenges, insurance offers opportunities to improve cash flow management.
By proactively reporting any fluctuations in payroll to your insurance provider, contractors can avoid overpaying for workers' compensation coverage during slower months and ensure they're paying the right premiums as business ramps up. Insurance premiums tied to actual payroll or job activity can better align with your cash flow, offering savings and flexibility when you need it most.
Acuity Insurance offers AcuitySmartPay to provide a smarter way for contractors to manage their workers' compensation insurance premiums. In addition to providing a web-based system that simplifies monthly payroll reporting, AcuitySmartPay provides multiple benefits to those who enroll, including:
- Improved cash flow
- Fewer surprises at audit
- Flexible premium payments based on business activity
- Enhanced business planning and budget insurance expenses
- Consider Insurance Coverage and Resources When Diversifying Operations
Winter can be an ideal time to diversify your business and look for new revenue streams. Expanding your services by offering winter-specific contracting jobs or specialized services can help keep cash flow steady during the slow season. However, these new offerings may bring additional risks that could impact your insurance premiums.
Before introducing new services, be sure to inform your insurance provider about any changes to your operations. Certain types of work - like roof repairs, hazardous material handling or using specialized equipment - carry higher risks, and failing to update your coverage could result in an underinsured business or unexpected costs down the road.
When expanding your scope, don't forget to consider employee training implications. Your insurance company should have loss control and risk management resources you can leverage. Many insurance companies, including Acuity, provide valuable services to help contractors identify and mitigate risks before they result in costly claims. These resources can include safety audits, jobsite inspections, safety training and tailored risk management strategies. By engaging with these services, contractors can not only improve safety and reduce the likelihood of accidents, but also lower their long-term insurance costs by proactively addressing risks that might otherwise lead to higher premiums or claims.
Make the Most of This Winter Season
Winter is a great time of year for most contractors to analyze their business and identify opportunities or resources that can elevate their bottom line. Having the aid of industry experts who understand the construction industry can provide invaluable support to contractors who want to grow and protect their business. Whether they're looking for expert advice, policy support or dependable claims service, contractors are encouraged to visit acuity.com or speak with an independent insurance agent to identify the best coverage, services and solutions for their aspirations or evolving business needs.
