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How Technology Can Help Construction Contractors Manage Their Risk

The construction industry is a vital component of the U.S. economy, but construction companies also must contend with substantial risks in their daily operations. Risks, including on-site injuries, property damage to the property owned by third parties and to their own work, natural disasters, worksite thefts, labor shortages, and supply chain issues, all must be managed to ensure the success of projects and the profitability of the companies. While some risks can be mitigated with a contractor bond and various types of insurance, many contractors and subcontractors are also adopting technology to mitigate losses and protect their work on project sites.

Photo by Shivendy Shukla

Technology as an Added Risk Management Strategy

The implementation of modern technology adds to the traditional risk management strategies used by construction contractors, subcontractors, developers, and project owners rather than replacing them. Stakeholders still mitigate risks with bonds and insurance. For example, contractor bonds protect other stakeholders against contractor risks, including non-performance, substandard work, building code violations, and more. If a contractor fails to fulfill their obligations under the contract or violates the law, the parties that are harmed can file claims against the contractor bond to recover compensation for their losses. Unlike bonds, having the right insurance coverages protects contractors against risks, including losses caused by worksite accidents and injuries involving workers and others who pass through construction sites.

Technology can help to mitigate additional construction risks and can protect everyone involved against interruptions while reducing energy costs, out-of-pocket expenses, and losses. Several types of technology are being widely adopted within the construction industry to mitigate site risks, including water monitoring technology, wearables, and imaging devices.

Water-Monitoring Technology

When water leaks on construction sites or inside buildings under construction, it can cause serious structural damage and extensive financial losses. To prevent problems, some construction companies are implementing technology to monitor water on construction sites. This type of technology can detect freezing pipes, when and where water flows, and water leaks. The monitors can also detect the levels of humidity and the volume of water flowing through pipes. Contractors and builders can use this data to intervene immediately and turn off the water so that damage can be avoided.

Water-monitoring technology helps in the following ways:

• Sends text alerts immediately when water begins flowing when it shouldn't be

• Allows contractors to identify and diagnose problems faster

• Reduces time spent searching for leaks

• Helps prevent extensive damage caused by leaks and resulting financial losses

Wearable Technology

Using wearable technology on construction sites is an efficient way to manage risks, and many contractors are adopting this technology. Wearable technology can help in multiple ways by doing things such as monitoring environmental conditions, noise, air quality, ergonomics, and movements.

Contractors can have workers wear belts that can detect falls and report the conditions around the worker so that future falls and injuries in that area can be prevented. Wearable vests can use geospatial positioning to track employees so that safeguards can be implemented within the worksite to protect them.

Some additional examples of wearables include the following:

• Gloves that monitor how workers use their wrists and hands and provide data so that contractors can implement measures to minimize repetitive use injuries

• Clips that track entries and exits from the work site, the areas where workers go, and how long they remain to help companies quickly locate workers in an emergency and also to minimize internal thefts

• Chest straps that can detect environmental conditions and ergonomics to evaluate work conditions

• Armbands that monitor repetitive pushing and pulling and when a worker slips and falls

Imaging Devices

The use of on-site imaging devices and AI is still emerging but has the potential to have a significant impact on projects with time. In the future, AI combined with imaging technology and automatic flagging, will likely be implemented on many project sites.

One type of imaging technology that is currently being used is on-site cameras with third-party monitoring by security professionals. Cameras can be placed to look down at the work zone and at the perimeters of the property that are monitored by security companies. This can help project owners and contractors monitor the work site around the clock to identify fires and thefts so that losses can be minimized and future incidents can be prevented.

Using cameras on cranes can also help to identify risks and prevent losses. Fixed crane cameras can help on-site supervisors to track inefficient usage of cranes and prevent accidents by alerting them to risky activities.

Creating three-dimensional digital walkthrough records of the site can help companies track progress on the project and ensure that the work is being performed to specifications. The walkthroughs can also help to identify safety issues and to document the site at critical points, including prior to a wall being closed up and following substantial completion to document the conditions and defend against potential construction defect claims in the future. If three-dimensional digital walkthroughs are implemented together with mold testing and risk engineering, the combination can provide a strong record of the project's quality to defend against allegations of defective construction.

As more construction companies harness technology to help manage risks on project sites, it might result in reduced risks for the industry as a whole. However, it is still critical for construction companies to engage in thorough risk analysis to identify project risks before they agree to enter into contracts. They should identify the potential risks and categorize them in the order of severity and their likelihood of occurring so that contractors can determine appropriate risk-management strategies.

Technology is only one component of good risk management strategies for construction companies and other stakeholders in construction projects. By taking the time to assess project-specific risks and determine ways to mitigate them, contractors can evaluate potential contracts and make informed decisions about whether to agree to enter them. The evaluation of risks and the implementation of strategies to mitigate them can help contractors to reduce their risks and protect the profitability of their contracts and their business operations.

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Author : Eleanor Bell

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