Insurance rates have been rising for quite some time, and, by March of this year, it was clear that construction had entered a hard market. In a hard market, rates increase while claims adjusting becomes more strict. Unfortunately, the situation hasn’t improved. In fact, it’s gotten worse.
In Q2, the average premium for all forms of commercial insurance grew 10.8%, a higher rate of increase than we saw in both Q1 2020 (9.3%) and Q4 2019 (7.5%). This is a challenge for general contractors, since insurance can account for as much as 10% of a project’s cost.
The upshot? Those firms that can negotiate lower insurance rates will be able to submit more competitive bids than those who can’t. And while our business isn’t really insurance — Smartvid.io’s mission is to ensure every construction worker goes home safe every night — a number of our customers have been able to use our platform and the benchmarking data it produces to convince carriers to lower their rates.
Benchmarking, safety and insurance rates
Simply put, Smartvid.io can save you money on your insurance. Though, to be fair, it’ll require a bit more time than 15 minutes (thanks, GEICO).
Here’s how we can help. With our Safety Monitoring module, Smartvid.io’s AI, which we’ve nicknamed “Vinnie,” analyzes site photos to identify safety risks: work at height, slip trip and fall hazards, workers not wearing PPE and many others. Vinnie is also able to track COVID-19 safety compliance, such as whether workers are practicing social distancing and wearing gloves and face masks.
But Vinnie doesn’t have to be the only observer. All personnel on the site can get into the game with Smartvid.io’s Safety Observations module. With our mobile app, everyone from a project engineer to the superintendent to the project executive can create risk-scored observations to capture both safety risks and good safety practice. These modules can be used on their own or in combination.
In either case, Vinnie crunches the data to provide compliance and risk scores for each jobsite, which management can use to identify where they need to devote additional resources and attention. Because Smartvid.io’s platform produces national and regional benchmarks for safety compliance, individual companies can compare themselves to their peers. And if your record is significantly better than the benchmarks, that puts you in a strong position to argue that your firm is a lower risk than the typical construction firm. In return, you could receive a lower insurance rate.
Working towards a stronger safety record
There’s value to benchmarking beyond insurance rates. For example, Warfel Construction was able to use the COVID-19 safety compliance data produced by Smartvid.io to convince county authorities in Pennsylvania to let them stay open. In fact, for a while, Warfel was the only construction company allowed to keep working in that county.
Of course, if your risk score doesn’t compare very well with the benchmarks, you’re not going to be able to negotiate a lower insurance rate … yet. Once you start using the platform, however, you should soon see your recordable incident rate and risk scores decline, so long as you take the right approach (i.e. use the data to identify jobsites at risk and NOT to nail individuals for non-compliance). Suffolk, for example, was able to reduce its number of recordable incidents by 28% in just 12 months with Smartvid.io, and they reduced lost time incidents by 35% over that same period. So, even if you’re not in a position right now to successfully make the case you deserve a lower rate, there’s no better time than now to lay the groundwork for better rates in the near future.
If you’re interested in trying it out, you can do so at absolutely no cost. Deployment is fast and simple, and we integrate effortlessly with Autodesk BIM 360, Procore, Box, Sharepoint, Structionsite, OxBlue and many other systems. An expert from Smartvid.io will help you set everything up and even walk you through your initial results to show how you fare compared to regional and national averages.
There’s no time like the present! Get in touch and set up a free pilot today!