July 12th, 2018
Increased Liability and the Rapidly Expanding Fenestration Market
Research conducted by Market Insight Reports estimates that the glass and glass product manufacturing industry will reach the $230 billion mark by the year 2020. By contrast, the industry topped out at $198.5 billion in 2016.
While most industry professionals will celebrate the progressive market, and rightfully so, the instant I saw this, I recalled a line from one of my all-time favorite films, The Shawshank Redemption. “Risk goes up, price goes up.” The line, delivered by Morgan Freeman as Ellis “Red” Redding, has always resonated with me. While he may have been behind bars, Red was a savvy businessman. A true capitalist and entrepreneur, he knew that as his profitability increased, his risk increased accordingly.
Focus on Growth
My way of thinking may seem a bit cynical, but it stems from a position of knowledge and experience. I’ve seen far too many up-and-coming businesses burst their bubble due to overexpansion and poor planning. The lesson is simple: as your business grows, take a portion of the added income and invest it in safety and liability protection. You may have either built your business from the ground up, or taken what you’ve learned over your many years as an industry professional to an already established company. Either way, a pressure to increase revenue and profit margins surely exists.
The good news is that market analysts predict our industry will grow by almost 23 percent over a four-year span. With ever increasing populations and a desire for more modern housing and commercial office space, the profits are sure to come. The key to beating out your competitors is to shift from an emphasis of growth to sustainability before it’s too late.
As you hire more employees, open new divisions serving more diverse customer needs, and expand your geographic service range, it’s more important now than ever to revisit your safety policies and procedures and consult your liability insurers. It’s math. If your company has 20 employees, and you hire an additional 2 0 less experienced employees in order to meet demand, the chances your company finds itself on the short end of defective product allegations more than double.
If you decide to expand the types of product, the services you offer, or expand your geographic reach, make sure you have appropriate and sufficient liability coverage for that kind of work. As your company grows from serving one state to many, make sure you understand the laws of those new states and how your expansion affects your insurance coverage. A minor investment in excess umbrella liability coverage or requiring an additional safety training course in your policies and procedures could save you hundreds of thousands—if not millions—of dollars in liability and litigation costs down the road. Making sure you obtain competent legal advice on your exposure and how to protect your profit stream on the front end is a wise investment.
Do the Math
Always remember, as the price goes up, the risk goes up. The glass industry is expanding. That’s a positive thing, and there is a good chance your company continues to grow with the market in the coming years.
Movies often provide excellent real-world insight. The future of your business “comes down to a simple choice, really: get busy living, or get busy dying.” The last thing you want is for your company to die out because your competition sought professional advice and recognized the necessary requirements to prosper.
First-rate industry legal services can be hard to come by. If you have any questions or concerns, consult an experienced attorney or business advisor. Make the call, and make sure your company employs the necessary added protections to capitalize on our thriving industry, both now and for many years to come.
Charles A. “Chip” Gentry is a founding member of Call & Gentry Law Group in Jefferson City, Mo. He can be reached at email@example.com.