Construction Insurance – A Risky Business

18th February 2020

Our team were recently approached by South East Business magazine to produce an article about insurance risk in the construction industry. We hope you enjoy reading the piece and welcome your comments and questions.

**Construction Insurance – A Risky Business**

Increased construction activity as the country climbs out of recession brings risks as well as benefits.

After several years of low activity, labour is scarce and construction firms are in danger of exposing themselves to risk management weaknesses as operations become more hectic.
Public and Employer’s Liability policies are designed to protect contractors against claims relating to injuries, death and damage to property. These claims can be substantial, with the largest award made for a single injury now in excess of £20m.

It is vital that site risks are identified and minimised and that policies will pay out if accidents occur. Most standard policies issued by insurers contain restrictions, conditions or warranties that put the contractor at unnecessary risk.

Examples include height or depth limits, endorsements that restrict the contractor’s ability to work in certain locations, such as near stations, roads, bridges or churches, and exclusions or special conditions regarding the use of heat on site or underground services. Other conditions may impose minimum insurance requirements for sub contractors, that main contractors cannot possibly enforce.

Contractors also need to ensure that their contract works, plant and materials are properly protected, particularly against risks such as arson, theft and malicious damage as well as storm and flood and that the policy wording is carefully checked.

Ian Gregory, director of MPW insurance Brokers, commented: “During recessionary times many businesses have had to focus upon reducing expenditure to survive, and as a result many contractors simply do not have the correct level of cover or an adequately-worded policy. Premiums don’t need to increase to solve this deficiency, especially with expert help.”

Now that building sites are busier and resources are stretched, the importance of adequate risk management is essential, while the costs to contractors of not having correctly arranged insurance cover could be huge. “That is a sobering prospect at a time when the economic outlook for the construction sector looks so healthy,” said Ian.

<a href=”http://pages.cdn.pagesuite.com/8/a/8adb30a1-0b54-4a8c-8cf5-41824e3f9ec8/page.pdf”>Click here to read article as published in South East Business Magazine</a>