Construction Business Defense Fort with Business Insurance

The construction business is a big deal in terms of development in different places. Construction companies have a lot going on. It's not just about the services they offer, but also about managing the risks that come up during a project.

Chances are, many of you already know what a construction company is. Simply put, it's a business that builds things like infrastructure and physical facilities for its clients. It does this in line with the relevant regulations, plans, and laws.

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4 Characteristics of a Construction Company

Basically, there are at least four main characteristics of a construction company.

• First, full of uncertainty. The business is full of high risks and uncertainties because there are so many variables involved. Apart from that, the profits obtained are also relatively low compared to other companies.
• Second, it is very influenced by the client. The existing market for this company is greatly influenced by existing clients because the interests of these parties are strongly protected (both by insurance, supervisors, and financial institutions) which binds the company to continue following the needs of its clients.
• Third, the budget and schedule are very dynamic. With these conditions, companies operating in the construction sector must deal with big risks related to managing the time and funds they need.
• Fourth, the obligation to implement K3 before starting processes related to development. The K3 procedure itself is an obligation to protect workers from the risk of work accidents which tend to be high, or other risks while in the project area.

Given the four characteristics we've gone over, it's no surprise that construction companies need the right insurance to support and protect their business. Having the right insurance, like the Asuransi SmartBusiness from AXA Insurance, means they can focus on getting the job done without worrying about potential losses.

Risks that Construction Companies Must Face in Their Activities

As we've said before, companies in this sector have to deal with a lot of risks when they're doing their work. Some of the risks that come up include the following:

• Damage resulting from fire, earthquake, flood, or other natural disaster.
• Loss or damage to construction tools and materials.
• Technical damage or failure in terms of design and workmanship.
• Delays and termination of projects due to bankruptcy.
• Legal risks, such as claims or demands from third parties related to ongoing projects.
• Work accidents and project-related public liability.
• Damage to or loss of contractor property.
• Professional liability risks (design errors, inappropriate recommendations, and incorrect analysis).
• Legal consultation fees and court process costs related to the claims submitted.

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Reasons Why Business Insurance is Necessary

If you're in the construction business, you need solid insurance. There are at least four big benefits to having the right insurance.

1. Reducing Legal Risks

There's a risk that existing parties may end up in legal disputes over who's entitled to what. Business insurance owned by entrepreneurs can help reduce these legal risks and protect them against claims that may occur.

Of course, if the business insurance provides these benefits, business owners won't have to worry about dealing with the law because of problems that arise.

2. Increase Credibility

Having business insurance shows that you have a solid risk management strategy in place. Clients will see it as more reliable because it's shown it's got its act together when it comes to managing the risks involved in its business.

3. Increasing Investor Confidence

From a business standpoint, having solid insurance is also a great way to boost investor confidence. In a nutshell, investors are always on the lookout for projects that have a solid risk management strategy in place, so they have protection for what they do.

Insurance is a great backup plan for investors and businesses alike. It gives you a safety net to catch any losses that might come up.

4. Reduce maintenance costs

Insurance for the construction business can also help cut down on the costs of maintaining things during a construction project. For instance, insurance can protect you from damage caused by accidents or human error, or from things that happen and are beyond your or your client's control, which can lead to additional losses or expenses.

Insurance can cover repair or restoration costs, which helps reduce the losses that arise from these causes.

Don't be careless, here's how to determine the right insurance product

If you're an entrepreneur in the construction sector, it's important to choose the right business insurance. The reason is that the benefits provided are important for the business, both in terms of what they actually get out of it in terms of coverage, and what they get out of it in terms of value.

Here are a few tips to help you choose the right insurance product for your construction business.

• Carry out a risk assessment, selection can be adjusted to existing risks.
• Look for references, either from business colleagues, advisors, or other credible parties
• Ensure the reputation of the insurance provider you choose.
• View the company's track record, claims and benefits provided.
• Don't hesitate to compare the available business insurance and choose the one that best suits the risks you have.

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As business insurance is a key part of running a construction company, it's important to get the right product. AXA Insurance Indonesia has the right product for this industry. Asuransi SmartBusiness has got your back in case of any unexpected events that might affect your business. If your place of work must close or you have to stop trading, you'll be covered. The same goes for if someone is killed or seriously injured at work, or if one of your employees is off sick for a long time. This insurance gives you the peace of mind to run your construction company with confidence and makes sure that everyone's rights are protected in case of an unexpected event. AXA Insurance Indonesia is there for you when it comes to managing the risks that come with running a business. They're reliable, practical, and trustworthy — the perfect partner for your business!

Reference

• https://accurate.id/bisnis-ukm/perusahaan-konstruksi/
• https://lngrisk.co.id/manfaat-asuransi-konstruksi-perlindungan-finansial-terhadap-risiko-kerusakan-dan-keterlambatan-proyek/
• https://www.tataaig.com/knowledge-center/workmen-compensation-insurance/role-of-insurance-in-construction-projects
• https://www.lexology.com/library/detail.aspx?g=ac899909-5dcf-4c03-909b-95e9794653e5
• https://buildertrend.com/blog/construction-project-insurance/
• https://ayobelajarasuransi.id/2023/05/16/pentingnya-asuransi-konstruksi-untuk-bangunan/
• https://www.bigrentz.com/blog/construction-insurance-types?srsltid=AfmBOorNDWHuPNN7byd9ZOc81eC58xVHjfMkFnCnzyxXMRCQMkbXrI4W
• https://umkm.kompas.com/read/2022/06/04/151700983/ciri-asuransi-proyek-yang-bagus-pengusaha-konstruksi-wajib-tahu?page=all
• https://sikapiuangmu.ojk.go.id/FrontEnd/CMS/Article/101