3 Top Business Risks for Specialty Trade Contractors

Working as specialty trade contractors can be a rewarding business venture. Still, errors and mishaps may occur despite your impressive skillset and ongoing dedication. Incidents affecting your assets and interests, as well as those that may inflict losses on clients and customers, could impose expensive financial consequences. Fortunately, by understanding top business risks, you may limit the severity of these situations.

What Risks Do Specialty Trade Contractors Face?

Exact risk profiles can vary significantly depending on your unique circumstances, including the services you offer, your location and your client base. However, several common potential issues may be relevant for most in this sector. Consider the following:

1. Labor shortages—Skilled trade companies may struggle to maintain adequately trained, long-term employees. Given the intricacies of your work and customers’ tight deadlines, even being slightly understaffed could pose significant financial consequences. In addition to offering competitive pay, try to differentiate yourself from competitors by offering attractive benefits, such as health insurance, paid time off, and training and educational opportunities. Offering apprenticeships may also help you discover talent.
2. Supply chain issues—Specialty trade contractors often rely on suppliers and other partners to ensure they can access the tools, equipment and materials needed to complete work on time and up to clients’ standards. Even slight delays or shortages could have dire ramifications. Research your suppliers thoroughly before entering into business agreements and consider retaining appropriate insurance, including business interruption coverage and professional liability insurance.
3. Third-party liabilities—Incidents impacting your own property and employees may be top of mind, but your business must also address the potential for other parties’ losses for which you may be blamed. You could face expensive losses and lawsuits if your employees damage a client’s property or a guest is injured while on a jobsite. Ensure you have an exhaustive insurance portfolio, including general liability, commercial auto and commercial umbrella policies to help limit out-of-pocket costs following third-party losses.

We’re Here to Help

Contact V Financial, LLC in Rolling Meadows, Illinois, to learn more about risk management and loss control measures for specialty trade contractors.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.