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Managing construction risk is a two-way conversation

25.06.2018

aig construction

 

Article written and published by the Sunday Business Post, 24th June 2018.

AIG Ireland draws on years of global experience to help firms cope with catastrophes when they happen.

We have seen that increasing construction costs are causing great concern,” said Cahir Doherty, the head of property and speciality risks at AIG Ireland.

“Construction companies are also finding it difficult to attract and retain skilled workers. Then there are the obvious market and regulatory implications, including Brexit, and what it will mean for the Irish construction industry.”

Many of the challenges stem from the fact that every project is unique and every stage – be it planning, design or final inspections – brings its own challenges. That’s why AIG works so closely with its clients.

“We work in partnership with clients to identify their unique exposures by carrying out on-site risk surveys. These allow us to evaluate and discuss project-specific hazards and risks, and provide a detailed and comprehensive report of findings,” said Doherty.

“We work with our brokers and clients before, during and even after the project becomes operational to address their needs through complex risk scenarios, adverse events and economic conditions, therefore providing an end-to-end risk-management offering.

“These challenges may include natural hazards, fire and site security. We are then able to create flexible policies to meet our customer’s specific needs.”

Much of this work happens through risk engineers, who are there to help understand the needs of their customers. AIG’s engineers have technical understanding of construction projects and work with clients to review their risk controls and identify risk exposures, helping to mitigate any injuries to people or damage to infrastructure.

“It’s important to note that many accidents and incidents can be avoided with careful planning,” said Doherty. “This planning process involves defining the scope and extent of work to be done, undertaking a detailed risk assessment; ensuring all relevant work permits are in place, and establishing the level of management and supervision required.

“I think it’s also important that organisations have seamless insurance solutions in place that can help prevent gaps in coverage.”

A risk engineering programme is continuous, encompassing the entire construction process. Ensuring safety standards are upheld is important, but it’s not the only benefit risk management brings.

Being negligent by not taking into account the risks can end up creating major problems for companies in the long run, all of which affects their bottom line.

There’s also the disruption such incidents can have on a business. For example, a flood or fire can leave a business without premises for a length of time.

In such circumstances AIG has a unique claims promise in place to  ensure businesses get back up and running quickly, said Doherty.

“If a flood occurs on site, we understand that the clients will need to get up and running as soon as possible to avoid significant business interruption. Our unique claims promise can provide cashflow assistance throughout the claims process.

“We pay 50 per cent of the agreed value of a loss within seven days, which ensures minimal disruptions to a client’s project operations.

 “Our key focus is to help our customers get back on their feet as soon as possible. Our unparalleled global claims network a lso means that we can quickly mobilise large numbers of claims technicians in response to a catastrophe.”

One of the key elements construction companies can improve in their approach to risk engineering is to ensure that communication is front and centre.

By maintaining engagement, partners such as AIG can better understand a company’s needs and take the necessary steps to help them.

It has handled millions of business insurance claims globally, said Doherty, giving it significant insight into the type of risks businesses face.

“A client providing us with as much information as possible allows us to gain a deeper understanding of their business and identify how we can best help them avoid or minimise losses, while also implementing best practices,” said Doherty.

“Whether a construction project is at risk due to ignitions, combustibles or natural catastrophes, we can provide helpful advice and checklists to help clients of all types better understand risks, in whatever industry they operate.”

For more information, please contact your insurance broker.