Mitigating Liabilities at Industrial Facilities

For manufacturers, facility risk is a critical factor that can have severe implications throughout your business. With hundreds of visitors and contractors at your facilities throughout the year, there are a variety of formal and informal touchpoints outsiders can have with your company.  Consequently, the management overseeing the many different departments interacting with visitors needs to be aware of the potential liabilities at stake and how to avoid disrupting the business.

What makes this a challenging issue for facility managers is the multifaceted array of liabilities that they are responsible for. In this article, we take a closer look at the most common areas of liability mitigation that can impact facility management and the success of your business.

IT Security Liability

One of the most common risks facing industrial facilities is IT security liability. Most facility managers are embracing the benefits of moving to visitor management software platforms. Adding a level of sophistication to facility operations with a visitor management system brings newfound visibility, cost savings, and liability exposure reduction. However, depending on the visitor management system’s approach to cybersecurity and its underlying technology infrastructure, this can create IT security risks that must be addressed. Thankfully, with the Transmission visitor management platform, all visitor data is secured via the deployment of cloud-based technologies and rigorous user privacy safeguards. Through a cloud-based infrastructure, sensitive visitor information is stored securely in the cloud—not onsite—and IT security liability is minimized.

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Contractor Management Liability

Managers of industrial facilities are responsible for working with a variety of commercial contractors to address their ongoing repair and maintenance issues. Liability exposure arises if these on-site contractors are not in compliance with corporate policies and are not insured or properly licensed. These risk factors must be carefully managed to reduce the chance damages occur from contractors who are uninsured or uncredentialed when accessing one of your facilities.

All too often, manufacturing companies discover that the contractors were on site without valid insurance or licensing after an incident has already occurred. There are potential operational and performance liabilities if there isn’t a consistent system in place to receive the proper paperwork. Moreover, there’s the risk of unqualified contractors who are unable to meet corporate standards in their work if an objective method is not in place to compare contractors against key performance indicators.

Contractor risk can be mitigated in multiple ways. As a starting point, all relevant information on contractors must be documented, including executed contracts and current copies of insurance and licensing, kept on file. Additionally, many industrial facilities maintain “scorecards” on the performance of their contractors. By using objective metrics, these scorecards allow manufacturers to be confident that standards are being met consistently across their facilities. Plus, by measuring contractor performance, more work can be allocated to contractors delivering top-notch service consistently.

Financial Liability

Contractors working at industrial facilities present another liability in the form of financial risk. This liability focuses on the financial health of the contractors that you use. Manufacturing companies often manage a large number of third-party contractors. Some of these contractors may be large companies with nationwide service coverage, while others may be smaller, local contractors with a more precarious cash flow.

Industrial facility managers must avoid a situation where a contractor providing specialized repair and maintenance services in a long-term project suddenly goes out of business due to poor financial health, and you are unable to replace the service with another contractor easily. When the financial health of your contractors is questionable, their work may cease suddenly without notice, which presents your facility with a potential financial liability. This scenario can create additional liabilities with equipment that is no longer properly maintained.

Brand Liability

The best manufacturing companies know that their physical, customer-facing facilities leave a lasting brand impression on the customer. Branding is usually thought of as only a marketing function, not involving the domain of facility management. However, upholding a company’s brand image in the mind of visitors is one of the most important responsibilities of a facility manager.

A company’s physical characteristics include facility entrances, lobbies, and even check-in kiosks are direct touch points with customers. Keeping facilities clean, safe, and functional is paramount to a company’s brand impression. By contrast, a facility with an inconsistent and neglected appearance leaves the customer with a very poor reflection of the company. When customers form negative opinions of a facility due to these issues, it creates a liability for your brand. These opinions create a general perception of the manufacturer, its other locations, and even its products and services, which only harms the brand in the end.

Health and Safety Liabilities

A manufacturer’s facilities and related equipment play an integral role in responding to safety hazards and emergency incidents. With responsibilities for the facility workforce, contractors, and visitors across locations, facility managers must carefully plan and prepare for safety hazards and emergency scenarios to mitigate health and safety liabilities.

When mitigating health and safety risks, facility managers must address potential safety hazards in a timely manner by a qualified service person. Moreover, managers of industrial facilities must have detailed safety procedures in place and keep up-to-date records of all actions taken to mitigate health and safety liabilities. This regular assessment of safety procedures includes the scheduling of safety inspections across all facility locations.