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Insurance for Construction Companies.
Developing property is peppered with risks and uncertainty, including those associated with planning permission and building regulations compliance, funding and finance, site accidents, design risk and warranty protection, the availability of and changing prices of raw materials, costly site discoveries (including pollution and archeology), and insolvency of suppliers and consultants to name a few.
All of these risks and more need to be identified, understood and managed out or transferred to the insurance market to ensure that a project is delivered on time and according to the project plan and budget. However, if something unfortunate does happen there needs to be a pot of insurance money available to compensate and limit the financial damage, and preferably eliminate it.
Working with an insurance broker which understands the risks faced by developers and the insurance options that are available significantly improves the prospects of continued success if things don't go according to plan.
And as you'll read in the page on Construction Project Insurance, there are several reasons why an insurance programme procured and controlled by a developer (as opposed to a lead contractor) may make a lot more sense to all parties, from a risk management perspective.
Construction contractors manage the construction of new buildings or the refurbishment or reconfiguration of existing buildings. They are typically responsible a construction project from site clearance and excavation of the ground, through to erection of the building and practical completion. They are also often made contractually responsible for insuring the project until practical completion so it is important that risks are understood and properly insured.
The management of a building site is a complex and challenging task, particularly from a risk control perspective. This is partly because many of the workers on site will not be direct employees of the contractor, but instead bona fide sub-contractors and labour only sub-contractors. Despite this, the lead contractor is responsible for the safety of everyone on the site and ensuring that everyone complies with the prevailing regulations to protect health & safety.
And as with any building, but more so for those undergoing construction work, risks that result in property damage are ever present. Fire is a common cause of damage and causes range from poorly installed electrical equipment to hot works protocols not being adhered to. And fire can severely affect a project and in some cases put practical completion back many months.
As a tradesman you belong to a large group of highly skilled and specialised workers.
However, due to the diversity of activity and risk manifested, insurers tend to view each Tradesman differently from a risk perspective and consequently provide different levels of cover and at differing prices.
Ensure that you engage a good broker who can work with you to identify and insure the key risks faced by you and your businesses activities.