Before signing on the dotted line in any deal, field services firms need to recognize and allocate risk.
An article on Buffalo Business First’s website warns that skipping over the fine print on insurance coverage requirements could leave a field services firm exposed to contractual liability.
That’s why it’s important to obtain general liability insurance coverage that provides protection from third-party claims. Many subcontractors fail to notice gaps in coverage until after a loss occurs.
Insurance can be a critical factor in protecting your assets, and it’s part of the cost of doing business. Make sure you can add insurance as a line item within your job costing and project management software.
Setting up insurance as a task with the appropriate follow-up activities in your software helps you ensure all necessary paperwork is completed. You want things in place so you can respond on behalf of your partners and employees in the event of an emergency.
Depending on the value of the insurance premium, you might want to track this in your job costing software, as it may have substantial influence on your margin calculations and billing schedule.
To secure a policy without limitations and exclusions that put the contractor at risk could be cost-prohibitive in today’s market, the Buffalo Business First article acknowledges. But contractors need be aware that parties higher in “the food chain” will look to them and their insurers for additional layers of protection.
Source: Buffalo Business First, September 2012