Risk Assessments: How to Prepare and What to Expect

Conducting your first risk and liability assessment may seem daunting—and it could be, if you haven’t prepared accordingly. Luckily, there are plenty of ways contractors can prepare for a risk assessment to determine costly liabilities.

Prepare to dive into the details of your workplace and services, including equipment, past incidents, current insurance coverage and more. You’ll need all of this information, as well as guidance from your insurance agent, to properly assess your risks and liabilities.

If done correctly, this can be a smooth, eye-opening process. Below, we offer some tips on how to prepare for and complete a risk and liability assessment for your contracting business.

Prepare for Your Initial Risk Assessment

You’re in the business and already familiar with some common contractor risks, including:

• Falls
• Other onsite injuries, like electrocution or hot work
• Property damage, vandalism or theft
• Tool or equipment malfunction or breakdown
• Commercial vehicle accidents
• Third-party lawsuits

Before the assessment, jot down what you believe to be your top three to five risks as an independent contractor or small business. Do they have to do with likelihood of injury or equipment malfunction? These initial thoughts can help guide the rest of your assessment and help visualize how risks often piggyback off of one another.

Common Risks Identified During a Contractor Risk Assessment

Grab a pen, because during your first contractor liability assessment, you can expect to fill out quite a few checklists and procedure documentation. Contractor risk assessments are meant to identify and organize your risks so that you can clearly see where you need to invest in more protection.



Using the pre-identified risks, you and your insurance agent will discuss potential scenarios that could occur as a result of your services. To aid in this discussion, create a list or spreadsheet of the tools, equipment, chemicals and other materials you and your team use, or have used in the past, to complete services. This list should include how old the equipment is and maintenance needs.

Group incidents and accidents together by similarity to identify trends, expose risks and underlying causes. Be sure to include equipment used, time and workplace conditions. Using your equipment and material list, determine the likelihood, severity and different scenarios that could result.

The Occupational Safety and Health Administration (OSHA) also recommends conducting periodic workplace inspections to stay up to date with your evolving risks. Keep record of workplace evaluations to make life easier the next time you have a risk assessment.

Finally, while working with your agent, consider the insurance policies you already have in place—and the ones you don’t. How much do these policies cover and under what circumstances? Use your current insurance policies to determine severity of risks and what still needs to be covered.

Close the Loop on Your Risk Assessment

Once you’ve identified risks and hazardous trends, don’t just stop there. Develop an actionable plan to reduce and mitigate liabilities for your team.

Host regular safety trainings for your team of contractors to keep everyone’s precautionary skills sharpened should an accident ever occur. Also encourage your team to read up on safety code and regulation updates in the instance that an accident does occur while servicing.

To prevent lawsuits and reduce your company’s vulnerability, speak with an insurance agent who can consult with you on the best types of insurance to invest in to protect your business.