Information is key to arranging adequate insuranceon
It is not uncommon for people to be reluctant to talk for hours at length around their insurance requirements. We as brokers are equally unamused when we’re arranging our own personal insurances, so we understand the drain of insurance questions. For development site risks, we arguably ask for more information than any other sector out there in the UK, but sometimes it’s important to understand just why we request so much information.
The following points help to identify why the level of detail is required for development-related risks:
1) To ensure any activities being undertaken are not excluded - No contractor is the same, no developer is the same, no project is the same and likewise no policy is the same. All insurance policies come with exclusions and many of them can be removed (for a price). Classic examples are timber framed properties, where the restrictions vary considerably and could be completely unreasonable. By understanding the project, we can look to work with Insurers to remove the restrictions.
2) To reduce the premium - Where there are more hazardous risks involved, whether it be materials, heat, height, depth or similar exposures, we will often look to explore the level of risk these elements truly impose. If the hazardous risk is only 10% of the entire exposure, then the higher premium will be only associated to that element, meaning the premium is cheaper overall. Where there is a considerable amount of risk, we will look to review the risk management and security on-site, as the better the risk management, the better the premium.
3) To guarantee the capacity - Insurers will have agreements which will allow them to take on a maximum exposure. This is known as the probable maximum loss and the estimated maximum loss. Although these differ in their calculations, the basis is that the Insurer will calculate what their true exposure is. For example, when constructing a new build property, it is unlikely you will have a 100% loss, as the majority of the time on site the property isn’t built yet. Where your project has multiple units on multiple platforms, then the maximum loss could be a single building or an area covering a small number of buildings close by, then the maximum loss could be one of these areas. This can be key, as Insurers who offer the better terms, rates or conditions may be more likely to quote when they feel comfortable over their true exposure.
4) To understand your additional exposures - Often brokers are asked for a quote and provide terms based solely on what they are asked for. We choose to review what we believe is your overall exposure and will advise of other covers we feel prudent to your needs, to ensure you are adequately covered. We are a multi-layered construction broker and can (where possible) look to package and offer discounts, but the main reason is to ensure you are fully aware of what your exposures are.
For an honest review of your upcoming projects, contact us today:
T: 0161 830 7556