Construction Industry Insurance Savings

[24hr]

Hi everyone,

I hope I'm in the right area with this question?

Does anyone know how much a developer, management company or company in the construction industry (heavy equipment, etc.) save on their insurance by having a 24hr security on site?

Thank you,

24hr

[NRM_Oz]

Depends on what they are guarding - asset protection, liability from public access, waste dump, environmental ?

Asset protection as in H/Duty machinery would help with long term solutions and hire of the equipment but no construction site is given insurance cover based on what is told to them by the policy holder. You should read the RA conducted by their own Risk Manager or a company agent who may have said "look you have no perimeter fences so you need to have someone posted here and here".

If you can pass on some more info I am sure we should be able to assist.

[24hr]

Construction Industry Insurance Savings

I am contracted to secure remote construction projects in various stages of construction.

For example I have been contracted by companies who are the first to begin a project (earth movers). Protecting their heavy equipment machines as well as keeping unauthorized personnel out of the site (quads, dirt bikes, etc.).

The present project I am securing is a Controlled Access Site which is the construction of a Waste Water Reclamation Facility. I am responsible for controlling access to this site after the project shuts down as well as securing their fenced in portable office area and sub-contractors equipment within this project.

I was recently told that the management company representing the developers of the over all project is also showing interest in my services as well. If contracted by the management company I will be responsible for all sub-contractors working within this project as well keeping unauthorized personnel out within an area of approximately a square mile. The over all area of this development is 2 - 3 square miles.

I was also informed that the developers of this project must have security on site as it is required by their insurance policy.

Thank you,

24hr

[NRM_Oz]

Any RA will have to agree and as to the cost of liability of injuries on private property there is no limit. I investigated a major house estate what had an injury with kids on motor bikes using piles of dirt to jump off - not knowing that underneat was a pile of rubble with steel in one area when a boy impaled himself on a steel post.

Requirements were to be fenced and gated and sign posted but as these kids were all 17 at high school seniors (equiv) they could read and were found liable for their own damage as the place was fenced, sign posted, gated, and secured with site patrol checks during non work activity. Parents were looking for a freebie and admitted their kids were 10 miles away from their homes when the injury happened.

I would guess at a glance that the risk reduction would be 50% with having security present, add fences, signs, etc and it would equal around 75-80% reduction in risks depend on staffing and access levels.

[24hr]

When contracted by a company would I be out of line to ask the company if they could make their insurance policy available for me to review?

What I have done in the past is, when I arrive on site I survey the project area then write my security recommendations. This is done for both parties, but it is for my protection (business) to avoid any recourse should the company fail to address the security issues listed in my report.

I do provide signs (x4) for example "24hr Security On Site", "Warning 24hr Security On Site", "Controlled Access Project / After hours deliveries or Guest Please Check In With Security / Unauthorized Access Will Be Denied", etc..

Sorry, I think I may be going off in a tangent here....

The reason for my question is to utilize the company savings in my presentation which I will be sending to prospective customers in the middle months of 2008. My contracts have been achieved solely through word of mouth. But I feel I need to be on top of things and not be complacent.

Thanks,

24hr

[NRM_Oz]

I am not a lawyer but the REASONABLE MAN PRINCIPLE is something rely on which says "what would a reasonable man do or expect ?". So if you have a 10000 sq fence line and only a few signs up - you are not covering yourself adequately - should be every 100 feet. Hint (if you are strapped for cash - get them done through a print shop and laminated so they can be attached to the fence line.

If they have asked you to provide security - then they have assessed the need for you to provide physical security. You can quote based on a risk assessment - look we have sheds full of tools, or supplies or big machinery so we need an alarm on each door plus we need signs plus we need bodies 24/7.

If they already have insurance they will also have had an assessment done. If they get insurance after you RA the site based on your requirements then it is something to discuss further. If you do have a closed site it is either barrier taped to warn people off with signage or it is lit up like Xmas to avoid anyone coming onsite and falling down holes.

[integrator97]

THe insurance papers may not tell you what you need to know anyway, and I'm not sure anyone would give them to you. They may ask to see yours then.

But it wouldn't hurt to ask, and better in writing, like a form they fill out and sign, that asks if there are any significant high risks, or danger factors, or anything the average person maight not understand about there risks.

About 12 years ago, when I still worked for someone else, we electronically monitored through a security system, a cold storage facility. One sunday, we received an ammonia alarm. Our monitoring station called the premises and the contact list. There were, I recall, 5 or 6 people on the list with 8 or 9 numbers, homes and some cell phones. Reached no one, and left messages. Several hours later someone got the message, it was a big deal, an ammonia leak, and they were fined by the EPA. Our limit of liability clause protected us, and it really wasn't our fault. But we then put in the instructions the importance of the alarm, keep trying , and notify us (the alarm company) if no contacts are available. Then we can decide what to do (call the FD?). Anyway, now I ask if there could be anything unusual.

[NRM_Oz]

I investigated one site for a client, where an adult male had taken a short cut through the building site (despite lit warning signs) and fell down a trench breaking both his legs. A path of solar garden lights had lit up the path to main site office and he had stepped off this to cut through to another fence. Legal action was taken against my client who had a chain link fence and signs posted but the plaintiff admitted he climbed over a gate despite warning signs and an 8 foot fence. Thankfully it was agreed that solar panels would be placed on all site offices to provide battery supplies for non-essential lighting after hours (no site power yet) and the court found that this was considered reasonable to prevent any access and that a lit path had been provided for after hours use. It cost my client about $15k all to fight this matter which could have gone into millions in fines and compensation.

[integrator97]

I investigated one site for a client, where an adult male had taken a short cut through the building site (despite lit warning signs) and fell down a trench breaking both his legs. A path of solar garden lights had lit up the path to main site office and he had stepped off this to cut through to another fence. Legal action was taken against my client who had a chain link fence and signs posted but the plaintiff admitted he climbed over a gate despite warning signs and an 8 foot fence. Thankfully it was agreed that solar panels would be placed on all site offices to provide battery supplies for non-essential lighting after hours (no site power yet) and the court found that this was considered reasonable to prevent any access and that a lit path had been provided for after hours use. It cost my client about $15k all to fight this matter which could have gone into millions in fines and compensation.

Yea, but he shouldn't have even had to pay that. Damn courts system.

[NRM_Oz]

Agreed - the legal eagle was the biggest cost - hence the use of me doing the ground work to save costs and to complete the RA. In another matter, a kid of 17 tried to break into a pub (bar) and clambered onto the roof where he broke through the ceiling causing much damage and injuring himself. When the owner came to investigate, the kid had a piece of timber in his hands so the owner whacked him with another bit and called the cops. The kid and his mummy sued the owner for assault and damages - result of about $255k US which was later turned around on appeal - but it makes you laugh.

[SecTrainer]

Hi everyone,

I hope I'm in the right area with this question?

Does anyone know how much a developer, management company or company in the construction industry (heavy equipment, etc.) save on their insurance by having a 24hr security on site?

Thank you,

24hr

Presuming that you yourself carry commercial line insurance, I would suggest that your own agent might well be able to answer your question or refer you to someone who can.

Taking a guess, I would imagine the savings would probably only be in the 10-20% range at most, since the total insured risks of such companies involve an enormous range of liabilities (falls, confined space, fire, electrocution, scaffolds, structural collapse, hazardous materials, etc., etc.) other than just those that would be mitigated by the presence of security.

On your other question, I see nothing wrong with reviewing the client's insurance coverage, particularly in the setting of conducting a Risk Analysis (rather than merely a Security Survey). Your approach would be that insurance (i.e., risk transferrence) is one means of risk mitigation and you need to understand how the security operations fit into the total risk management picture.

The question is, though, whether you are qualified to know what you're looking at if you do get access to their policy? These things can be pages and pages and pages long, with all kinds of riders and codicils. They are written in mind-boggling legalese, set in microscopic type, and use a lot of special insurance-related terminology that you can't possibly understand without training in the field.

And, buried in this garbage heap there could be a three-word phrase that basically means: "...and we, the insurer, will never pay nothing to no one, no how, no way, unless the loss occurs as the direct result of attack upon the insured conducted by Tutu villagers on the eve of St. Swithens' Day, after 6 PM GMT, and in such case our liability shall be limited to the cost of repairing any puncture holes in the tires of company vehicles, if proven to be caused by said attack (which we double-dog-dare the insured to try to prove)."

[SecTrainer]

The present project I am securing is a Controlled Access Site which is the construction of a Waste Water Reclamation Facility.

Incidentally, one other point: I notice that this project involves a facility that is involved with "environmental issues". Be sure that you understand the milieu surrounding this project in terms of environmental activism. There are a number of extremist "environmental" groups such as ELF who consider terrorist acts like bombings and arson to be legitimate actions in support of their causes, and they frequently attack construction projects involving facilities they don't like. Whether this project is generally regarded as being "good" or "bad" for the environment doesn't really matter - there are extremists on both sides of most of these issues.

In other words, you might want to do a little intelligence work regarding the history of the project itself (who made what comments in city council meetings during public discussions, have any threatening letters been received by the city planning office, angry letters to the editor of the local newspaper, the construction company or developer, etc., etc.), the history of attacks on similar projects (anywhere in the country) previously, and stop by the local police and/or sheriff's department to chat with them as well. The latter would be a good idea in order to inform them of your activities at the site anyway.

If you should happen to find that the atmosphere around this project is charged with a degree of "angry activism", or if there is a history of attacks on such facilities, you might even want to stop by the local field offices of the FBI and/or ATF to see if they have any information and/or suggestions to offer. Domestic terrorism is just as dangerous as foreign terrorism, and if there is a quantifiable threat from such groups it would change your whole approach to the operation.

[integrator97]

Presuming that you yourself carry commercial line insurance, I would suggest that your own agent might well be able to answer your question or refer you to someone who can.

Taking a guess, I would imagine the savings would probably only be in the 10-20% range at most, since the total insured risks of such companies involve an enormous range of liabilities (falls, confined space, fire, electrocution, scaffolds, structural collapse, hazardous materials, etc., etc.) other than just those that would be mitigated by the presence of security.

On your other question, I see nothing wrong with reviewing the client's insurance coverage, particularly in the setting of conducting a Risk Analysis (rather than merely a Security Survey). Your approach would be that insurance (i.e., risk transferrence) is one means of risk mitigation and you need to understand how the security operations fit into the total risk management picture.

The question is, though, whether you are qualified to know what you're looking at if you do get access to their policy? These things can be pages and pages and pages long, with all kinds of riders and codicils. They are written in mind-boggling legalese, set in microscopic type, and use a lot of special insurance-related terminology that you can't possibly understand without training in the field.

And, buried in this garbage heap there could be a three-word phrase that basically means: "...and we, the insurer, will never pay nothing to no one, no how, no way, unless the loss occurs as the direct result of attack upon the insured conducted by Tutu villagers on the eve of St. Swithens' Day, after 6 PM GMT, and in such case our liability shall be limited to the cost of repairing any puncture holes in the tires of company vehicles, if proven to be caused by said attack (which we double-dog-dare the insured to try to prove)."

Was the tree a ficus?

[SecTrainer]

Was the tree a ficus?

No, unfortunately it was a yew tree - specifically, a fucyew - which, as any arborist would know, is related to the fucme, fucem, and fucit family of trees - all hardwoods, of course. These trees are often confused with the yomamma tree, which looks very similar.

[integrator97]

No, unfortunately it was a fucyew, which is a totally different tree altogether.

People are always telling me about that tree. Don't understand why. Do I look like an arborist or something?