We are now one year removed from the early days of the Covid-19 pandemic.
Late March and early April 2020 brought fear, confusion and stress to contractors throughout the United States. The swift shutdown of offices, jobsites and public life immediately changed the way we interacted and communicated.
Our outstanding partners in surety and insurance, as well as those within the Risk Strategies' family, offered quick guidance and thoughtful counsel to brokers and contractors alike via conference calls, webinars and video communication apps.
Ultimately, the "worst case scenario" didn't come to pass for most construction companies. The construction marketplace was deemed "essential" and the Paycheck Protection Program (PPP) helped many contractors achieve record results in 2020.
However, we can all benefit from revisiting the concerns and potential solutions from those anxious weeks. I recently came upon my notes from those early days of Covid-19, compiling my own and other's "best advice" for contractors to survive the shutdown. Many of the basic ideas from that fearful time one year ago remain as true today as they were then.
Meeting notes of Brian Whipple, 3/27/20
Best Practices for Surviving Covid: What Contractors can focus on right now
Review Contract - who is responsible for delays? cost overruns? review schedules and completion times/LDs/Delays? Force Majeure clause? How do we (the contractor and surety) protect ourselves?
Impending Material and Labor Shortages - prepare now!
The Past & Current Determine the Future - Remember the 3 "C"s of surety underwriting - Capital, Capacity & Character
Identify and Manage your unique risk in this marketplace
Financing WILL eventually constrict: Count on it, Plan for it
Save Cash: Be a Hoarder!
Focus on Profit Margin first, Revenue second.
Tighten collection policies - Enforce late fees
Numerous Insurance Carriers and Vendors will allow for temporary suspension of payment - manage cash, but know what you owe!
Review Business Income Coverages
Whether it's a pandemic, a recession or some other unforeseen, unknowable event that challenges us next, history often repeats and preparation for the unknown is key.
If you have any comments, questions or concerns about any of the above, the surety professionals at Risk Strategies are here to help!
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The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.