The Construction industry is a complex area to insure and it can easy not to realise that you have gaps in cover until it is to late and you need to make a claim.
There is a large range of insurance covers that contractors need to consider and many nuances within those that you need to be aware of.
- Public and Employers’ Liability
Most people know about Public and Employers’ Liability, and it could be considered the obvious cover, but even within these covers there is so much that you need to consider. Firstly, business description. It needs to be correct and accurately cover all of the activities of your business. For example, a business carrying out basement works may think that it is okay to have a business description of a builder. But actually, the majority of basement works will be excluded within the policy wording in this instance. This is where it becomes really important to have an insurance broker expert who can advise on this and ensure that business descriptions accurately reflect what you’re carrying out. Likewise, working at height, depth, hazardous locations, working with heat or working abroad, all need to be declared to insurers for liability insurance.
2. Contract Works
Contract works is really important for many contracting businesses, as it covers accidental damage and loss to ongoing works on site. It also covers the cost of materials and labour to put a project back into the position it was in prior to the loss.
3. Plant Insurance
Usually defined by owned plant, or plant that you hire in from a company. Plant insurance is important as theft of plant is very common. Again, a broker is needed to help you source an adequate policy and make sure that the cover in terms of security requirements are correct and that you can adhere to any stipulations in the policy.
4. Professional Indemnity
Professional Indemnity insurance is often overlooked by construction firms, when actually it is becoming increasingly important in a litigious society. It covers against allegations of negligence in relation to any professional work carried out, and so any construction firm carrying out design, supervision, specification or technical supervision should hold this policy, as they are all at risk of having legal action taken against them for negligence in carrying out professional services.
Other important covers to consider include Directors and Officers, Legal Expenses, Fleet Insurance and Building Warranties.
Why use a broker?
There will be specific clauses relevant to either liability or contract works, for example, joint names contracts, non-negligent liability etc. It is important as a construction firm that you work with an insurance broker who understands these clauses, and who can ensure that when they provide the insurance these policies can be extended easily or provide specialised policies that can be sourced to allow for the contractor to adhere to the terms of the contract.
What should I do now?
Sit down with a professional insurance broker to review your current policies and make sure that the cover that you have currently is correct and fit for purpose. Use this time to look at where your gaps in cover are and make sure that you are covering against these risks.
At RK Henshall, we can provide a free business insurance audit, to review your current cover and provide commentary on your situation and recommendations. To chat to our commercial team about this, contact us on 01270 758070.