At Dunn Solutions, we’re dedicated to providing trusted information and advice to support trade contractors and craftspeople throughout the greater Seattle area. While we often share insight on quality materials and building techniques, we also understand that there are countless other facets of your business required to keep things running smoothly—like insurance. 

From the basics of what contractor liability insurance is and how to read your policy to understanding policy exclusions and Washington laws that impact contractor liability insurance, there are a lot of factors to consider for your business. That’s why, for our Contractor Liability Insurance Series, we’re speaking to Shelli Lucus-Kennedy, owner and senior risk manager of Insurance Risk Services. With more than 40 years in insurance and risk management and a focus on the construction industry, Shelli is a wealth of knowledge, due to her extensive experience and customer-driven approach. 

How do you know you’re getting the right insurance policy to cover your business, employees, or projects? How do you know if you should avoid a project that sounds too risky or how to minimize risk within your company setup? These are all important questions to consider and often require guidance from a third-party expert who can evaluate your business’ risk. In this episode, Shelli shares why it’s critical for contractors to work with a risk management specialist (risk manager) in addition to their insurance broker.

Watch our discussion in the video above or keep reading to get the highlights.

What does a risk manager do for contractors?

A risk management specialist looks at all aspects of a business or account to identify where the business may be at risk—from safety considerations to insurance policies, subcontractor agreements to sales contracts.

A risk manager will look at everything a contractor is involved in—including agreements with subcontractors or clients, job scopes, and sales contracts—identify how everything can affect each other or lead to potential risk, and then make recommendations on how to manage the risk. Managing risk often involves three tactics:

  • Minimizing risk—Such as by changing the scope of a job.
  • Avoiding risk—Such as not taking a job.
  • Transferring risk—Such as purchasing an insurance policy to transfer risk to the insurance carrier. (This is often the least effective and most expensive option, as there are often many other ways to minimize risk before turning to insurance.)

What is the difference between a risk manager and an insurance agent or broker?

While a risk manager will consider all aspects of a business, an insurance agent or broker is primarily concerned with selling a policy. They may make coverage recommendations or suggest how to lower a deductible, but they likely won’t look at a business’ big picture. Large brokerage firms have risk management divisions to help provide this overview, but smaller brokerage firms often don’t provide this service unless they’re highly specialized.   

Why should contractors work with a risk management specialist? 

If your insurance agent or broker doesn’t offer risk management services, it’s wise to seek them out separately. As mentioned above, a risk manager will take your entire business into consideration to identify risk and make recommendations on how to minimize or manage the risk, even before you start looking into insurance policies. By implementing their recommendations, you not only minimize your risk, but can also reduce insurance premiums and unwanted surprises when you have a claim. They’re also able to help ensure all your contracts and policies work together instead of having conflicting agreements or clauses that could threaten your protection. 

Interested in other ways to protect your business? Don’t miss the other helpful episodes in our Contractor Liability Series, covering topics like what contractor liability covers and how to read a contractor liability insurance policy.