Buying affordable general liability insurance coverage is getting harder all the time, but you can do plenty to manage risk in your business. That will make you a more attractive customer to insurance companies. According to Bruce Harrell, CEO of HBW Insurance Services, which provides warranty insurance to the home building industry, effective risk management comes down to these critical steps:

• Keep good records. Document all aspects of the building and selling process – those records will be crucial if you ever get sued. Retain all plans, material lists, schedules, change orders, trade contractor agreements, certificates of insurance, and sales contracts.

• Pay attention to site conditions. Most GL policies don’t cover defects related to soil movement, so it’s up to you to ensure that your lot doesn’t have expansive or collapsible soils. Retain all soil testing records.

• Transfer risks to sub-contractors. Your sub-contractor agreement should include “hold harmless” indemnity agreements, specify the required insurance coverage ($500,000 minimum for each home on which sub works), and require all disputes to be resolved through binding arbitration. Include a waiver of subrogation, which protects you if subs get sued for work performed on your homes. Make sure your employees and subs understand the importance of customer service and warranty calls.

• Manage supervisors with care. Site supervisors are the front line of defense in your risk management program, as they oversee construction quality and enforce job-site safety procedures. Make sure you thoroughly train and manage them.

• Make safety a priority. Follow all standard job-site safety procedures to prevent falls and keep workers safe from other hazards. Document your safety and safety training programs. Post “Private Property – Unauthorized Entry Prohibited” signs at all points where someone might access the site, and notify homeowners and vendors in writing that they cannot visit the site without an escort. These steps will demonstrate in court that you warned people to stay away.

• Use a comprehensive sales contact. Have an attorney review all your contracts. Make sure they contain strong arbitration provisions. Document all changes and have homeowners sign the change orders.

• Implement a solid warranty program. Proactively handle all requests for warranty service after the sale. Make sure your employees and subs understand the importance of customer service and warranty calls. Document all requests for warranty service and keep copies of work orders showing you handled the requests.

   All of these steps help demonstrate your commitment to running your business safely, responsibly, and professionally. That makes you a better risk and can make it easier to buy affordable general liability insurance.