Best Practices for Restoration Contractor Risk Management

March 17, 2016


The best approach is to adopt a comprehensive system for managing your risk and follow it consistently. An effective restoration contractor risk management plan addresses four elements:  communication, pre-qualification and selection, contractor performance monitoring, and continuous improvement.


1. Effective Communication of your company values, pre-qualification guidelines, evaluation thresholds, safety requirements, and feedback to your contractors is essential. This can be accomplished through written policies and procedures, emails, web-based communications, training meetings, or telephone contact.


2. Contractor Pre-qualification and Selection Process. Use a contractor pre-qualification audit and management system questionnaire to identify where sub-contractors stand on key leading and lagging indicators. Your review should include:

  • Safety Performance Statistics

    • Injury and Illness Frequency

    • Fatality History and Rates

    • Workers Compensation Rate/Experience Modification Rate (EMR)

  • OSHA Citations/Prosecutions History

  • Post Job Evaluations and Audit Scores

  • Safety Manuals and Programs

You should verify the information submitted with a pre-qualification audit where appropriate.


3. Contractor Performance and Monitoring. Field audits are the best way to verify your employees and sub-contractors are in actual compliance with all of the requirements. Audits can be contractor sponsored, owner/client sponsored, or commissioned by an industry network of owner operators who then share the data from the audit with their network members.


4. Continuous Improvement. You can use the data collected to trend lagging indicators. This can help you to understand patterns and trends in incident rates. By employing statistical models to identify leading indicators you can highlight the key factors associated with increased incident rates and act on these to reduce your risk and improve your company’s safety performance.

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