Reduce risk – Be sure your suppliers are insured.
A very costly mistake for an avoidable scenario. Jim, a site manager hires a contractor for a project at the site he oversees. Knowing there is a risk to the work involved he hires a company from a contact list folder located in the office filing cabinet.
The smart extra step is to make sure the contractor is insured so Mary, the office manager, asks for a copy of the insurance certificate before they award the contractor with the project. The COI is put into the folder which is then placed back into the filing cabinet.
A few months into project there is an incident. An employee of the contracting company backed a forklift into a scissor lift almost knocking it over. Thankfully it didn’t fall but unfortunately the individual working from the lift did. Fall protection should have been in-use but wasn’t so the employee fell and injured a leg.
When an incident occurs, all parties can be subject to a lawsuit. The site manager pulls out the folder from the filing cabinet and finds a not-so-pleasant surprise. The insurance expired over a month ago and the contractor failed to renew.
Further review – by the injured employee’s attorney – finds the contractor company the employee works for doesn’t enforce the use of most PPE and forklift training is minimal when training happens at all.
Two scenarios that could have been avoided in this case:
- Complete the “further review” before the contractor is even hired and have a prequalification policy in place.
- Be sure notifications are in place so when a policy expires, you and the contractor are informed and can address the issue immediately.
Procurement departments often take the insurance policy one step further. When an insurance policy is expired or doesn’t meet the requirements, payments to the contractor are sometimes withheld until the policy is sufficient.
Improving the safety culture includes being sure everyone that comes on site has safety in the forefront. The Pre-Qualification process is proven to help improve the safety culture of both the Hiring Client and Contractor.