Educate How Construction Companies Can Secure Cover in a Challenging Insurance Market A more challenging insurance market has led to a rise in premiums and, in some instances, a reduction in the level of cover for construction companies and contractors of all sizes. A gap in cover could be costly in the event of a claim and potentially threaten the future of the business – so how can you secure cover that suits your requirements - and budget - when faced with these market challenges? Insurance and risk management specialist Gallagher explains… What is happening in the construction insurance market? Even before COVID-19, the insurance market had been hardening due to a range of environmental, economic and political events, as well as ongoing regulatory updates. Similar to other industries, the construction sector has been impacted by these changes. Insurers and insurance markets respond to a tougher commercial environment by becoming more selective on the types of risks they choose to write. For construction companies, this has led to higher premiums, changes to the scope of policy wordings, and increases in the deductibles (or excesses) applied to insurance, at time of renewal. Given the sector has always been particularly susceptible to market fluctuations, looking at insurance from a balance sheet perspective helps to identify and determine whether your current insurance arrangements will continue to meet your needs now, and in the future.
Securing appropriate levels of insurance cover Scrutinising your insurance programme starts with developing a robust understanding of the key areas requiring cover. Think about your company’s current activities and consider all relevant structures of a project and the involved parties. Look closely at the levels of cover required by your business now – as they may differ to when you last reviewed your insurance programme. A specialist insurance broker can help to identify gaps in cover as well as changes to your operations, this may change the way your insurance responds in the event of a claim. Scheduling time to speak with your broker is one way to confirm that your insurance policy offers adequate protection, and identify where exclusions and changes to the policy wording may apply. If COVID-19 has led you to make adjustments to the way you do business, we strongly recommend speaking with your broker to review your current insurance arrangements to confirm that your cover remains fit for purpose. During renewal preparations, please pay extra attention on the policy wording and the terms put forward by the insurer, to identify restrictions and/or exclusions that may be added.
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