Let’s face it, the insurance industry is hardly the “sexiest”! In fact it ranks right up there with VAT!
Nevertheless, if you don’t get it right it can cost you dearly.
At CECA Wales we’ve noticed more than the usual challenges being faced by contractors and, whether they know it or not, by clients too.
- Distribution of risk. Over the past few years there has been a reluctance or refusal from major global consultancies to accept associated risks and this can impact, particularly, upon smaller contractors and the client. For example, a client requiring a Design and Build project could pay twice for the insurance cover because both the consultant and contractor will have their own separate policies.
- Reduced contractor understanding of insurance issues. Over the years, there has been an eroding of the expertise required to seek the most appropriate insurance, which has resulted in monies wasted through poorly specified insurance policies. Clients often do not receive the cover anticipated, but this is rarely realised as most policies are never activated. But this means that in the worst case scenario, insurance claims have become much bigger.
- Challenging insurance market: The provision of insurance has become less lucrative. The market is shrinking and is likely to continue doing so in order to maintain profitability. To mitigate the changing circumstances, insurance companies are increasingly working to a one-size fits all policy. This type of model fits all risks, making it cheaper, but also far less bespoke.
- Variable levels of client understanding : Clients are also specifying insurance cover levels far higher than is needed, often due to a lack of understanding of the subject, and as a result, construction companies are finding it harder to find affordable, competitive quotes. This means that the supply chain will struggle to win work if they cannot find appropriate cover and this can impact disproportionately on smaller, locally based contractors.
To surface some of these issues and offer potential solutions, CECA Wales has teamed up with the Moorhouse Group, based in Caerphilly. This morning seminar will allow clients and contractors to better understand the complexities of the sector and become far more savvy in future. This should lead to a “win win” situation for all.