PI – Time is of the Essence

By Cliff

Capacity restrictions on construction PI (professional indemnity) insurance placements have raised prices, putting them on an unsustainable growth curve. News stories featured in the media about the crippling effect these rises have had on architects, surveyors and a host of building contractors means that the run-up to renewal dates is daunting for all.

Lloyd’s has capped its underwriting of design and construct PI insurance, which has shrunk the market’s capacity and led to insurance price hikes. The impact has been so severe that insurers have been leaving the market, meaning that some brokers have just one provider while others can no longer service construction businesses.

In addition, an increasing number of policies are moving from an any one claim limit to instead, impose an annual aggregate limit, thereby reducing cover.

These recent price rises as a result of so few PI insurance options might lead to a risk of the market running completely dry. In this scenario, agreeing to renew your policy at the last minute might mean you risk being unable to get insurance due to a supply shortage rather than the price of premiums.

Although the Grenfell disaster is often cited by industry commentators, Willis Towers Watson, a global advising and solutions company, stated:

“There has been a noticeable increase in construction PI claims activity in the UK and globally over recent years, particularly relating to large infrastructure projects and renewable technologies (especially in the ‘Waste to Energy’ sector).  The scope for costly disputes continues to g as major construction projects become ever more expensive and complex, and an increasingly globalised landscape often adds further complexity to projects and any ensuing claims.”

We might be able to help you

Although we can’t do anything about market forces, our extensive experience in insuring construction companies and those in the construction profession enables us to identify some of the best, and most practical, PI insurance options available. Call us on 01525 719955 or email info@homecountiesinsurance.com for help.

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