Modern Methods – Impact on your insurances
June 15 2020 By Mitch Cookney
Growth in the use of Modern Methods of Construction (MMC) is happening at a time of market change, and although it is a fundamental driver behind the MMC revolution, Modern Methods of Construction is not just about offsite fabrication.
MMC will generate significant development in the culture, technology, commercial structure and funding criteria within the construction industry and it is important that your professional advisors evolve in line with these changes. Modern Methods are already challenging the way in which projects are structured and insurers are becoming much more austere as a result. Understanding the market changes can be extremely useful when it comes to creating your insurance and risk management strategy.
Working in conjunction with your insurance broker and insurers upfront can help address the concern of using modular construction. The use of MMC is an important feature which should be disclosed to insurers who may require additional precautions to be undertaken. If the use of MMC has not been disclosed to the insurer, they are within their rights to impose a rateable settlement in the event of a claim or, even worse, avoid the policy which could potentially leave Property Owners or Developers significantly out of pocket.
As experts in the construction sector, we appreciate the significant value which MMC can bring, but we are also aware of the potential increase in risk. As a result, we work with our clients to actively look to identify potential exposures, especially when it comes to MMC. For example, the risk of completed modules themselves being damaged in transit is much more crucial than standard materials being damaged, as it would ultimately result in longer delays to the programme. That is of course assuming that there would be cover within the Delay in Start Up (DSU) extension of the project insurance programme, as this may not be the case.
Having an expert broker on hand, who understands the sector, your needs and your programme is a fundamental factor to ensuring your site is protected comprehensively. At Reich, we work with you, acting as your agent, ensuring that we obtain a thorough understanding of your development and the way in which you intend to build. This allows us to paint a clear picture to underwriters, which in turn ensures that we are able to obtain the correct cover, at competitive rates.
Get in touch today to discuss your requirements:
T: 0161 830 7556