ForConstructionPros.com

Regardless of the size of your sweeping company, risk transfer controls are an important part of any sweeping contractor's risk management program.

When understood and used properly, insurance and its various forms protects sweeping contractors by insuring them against risks associated with their work. Just as importantly proper insurance assigns risk where it belongs and prevents others from transferring their risk to you.

Does this sound familiar?

You put together a bid package, obtain a certificate of insurance to be attached to the bid, which you submit and hope for the best. Then you are successful and win the bid. Good for you! You go to work, providing the sweeping service as specified in the contract. Upon completing the job you hopefully have maintained the almighty, ever-shrinking profit margin. After all, isn't that why entrepreneurs put everything on the line?

Now for the surprise! The job is complete, you made a profit, and you're on to conducting other business. Months pass and you receive a summons and complaint in the mail. Upon review, you are outraged that it involves an incident that you believe has nothing to do with the scope of work you were contracted to perform. You forward the claim to your insurance carrier under protest, with the belief that they should not award the claimant any damages.

You are deposed on the case, spending even more of your valuable time, and after all is said and done, you find that your insurance company settled the case and compensated the claimant. You know this action will undoubtedly have a negative impact on your insurance loss information, which could make it more difficult for your sweeping company to obtain the most competitive insurance pricing.