Economy-Driven Interest in Off-Site Construction Lowers the Risk of Work Comp Claims
By Matt Horton, Vice President of Distribution
The rising cost of building materials, supply chain challenges and the ongoing skilled labor shortage have prompted the construction industry to explore new options in home building. According to the National Association of Home Builders (NAHB), “[Today’s] economics [are] making everyone look at better and more efficient ways to build. One area in particular that has been on the rise amid these economic issues is off-site construction.”
The Constructor, a building technology website, describes off-site building construction as an improvement over traditional on-site construction because it makes it easier for companies to incorporate modern, cutting-edge materials and assembly techniques [...] with a much higher degree of precision.
What is off-site construction?
Off-site construction is a process that allows a building project to be designed, manufactured and fabricated in another location (e.g., a factory, a machine shop), and then transporting said items directly to the job site for assembly. In contrast to traditional building methods that happen on-site, off-site construction simply means that the majority of the work is done elsewhere — away from the building site.
What are the main features and benefits of off-site construction?
The Constructor, a building technology website, describes off-site building construction as an improvement over traditional on-site construction because it makes it easier for companies to incorporate modern, cutting-edge materials and assembly techniques (e.g., scales and systems, new manufacturing methods and digital software) with a much higher degree of precision.
According to The Constructor, the types of projects/job sites that may be better suited for off-site construction include:
- Projects with tight completion deadlines.
- A job site that may be up against severe weather-related issues (flood waters, high winds, etc.) that could substantially delay a project.
- Building projects with replicated structures.
- Job sites with on-site space limitations.
- Job site locations where there is an increased risk of theft and vandalism.
- Projects where specific safety concerns may exist, such as extreme heat or cold, hazardous air conditions, and heights that pose substantial safety hazards.
According to the NAHB, the main benefits of off-site construction include fewer wasted materials, shorter build/completion timelines and lower overall labor costs. It also addresses the following three key issues that off-site construction building can help solve for.
- Reducing expenses associated with the high cost of shipping and fuel costs. In most cases, it is less expensive to ship a single finished project to a job site, rather than make several trips to deliver parts, tools and other components.
- Combating rising interest rates. Because off-site construction can be helpful in expediting a project to completion, homes can be built sooner. In an economy where interest rates are rising, this can be a factor in whether a new home mortgage is still affordable to a potential buyer/investor.
- Reducing weather-related delays. Off-site construction happens undercover. Therefore, weather-related project delays can be abated. In addition, without having to contend with weather-related safety hazards, the safety of workers is also improved.
" ... the main benefits of off-site construction include fewer wasted materials, shorter build/completion timelines and lower overall labor costs."
– NAHB
Conclusion
Off-site construction can’t and won’t entirely replace on-site construction. Moving forward, it is up to the individual construction business to decide when and if the process of off-site building is appropriate for a specific project.
If you’re a retail insurance broker with construction industry clients, it’s important to explore Contractor General Liability coverage options that include a Faulty Workmanship Coverage Endorsement – to protect your clients against claims arising out of faulty workmanship, materials or products.
Matt Horton is the Vice President of Distribution of Builders & Tradesmen's Insurance Services, Inc., an Amynta Group Company.
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