Professional Indemnity Insurance in Construction

By Cliff

Recently, the number of professional indemnity (PI) insurance providers for the construction industry has decreased, and those that remain have reduced their offering while raising their fees. However, all is not lost if you have an experienced broker.

What’s shaken the construction industry’s insurance providers?

Worldwide, national disasters have affected the major international reinsurers that underpin our insurance markets. Issues specific to the UK’s construction industry have also taken their toll. For example, underachieving technology in sustainable waste and energy management along with a loss of confidence in certain building fabrics, underlined by the Grenfell disaster.

Why are construction and maintenance industry PI insurance rates rising?

In July 2019 Lloyd’s estimated that around 62% of those writing non-US PI insurance at Lloyd’s were losing money – a lot of money. They estimated a loss of £435 million over the past six years.

In response, Lloyd’s would only consider signing off business plans that would help turn PI into a profit-making class of insurance. Inevitably, this has increased the cost of PI insurance.

Underperforming insurance carriers could not get their PI plans signed off so they left the market, which has hit construction and engineering PI particularly hard.

The calculations and rules behind underwriting PI for these markets have tightened, which has reduced the appetite for renewals and new business. This shrinking market is why construction and maintenance companies are seeing far fewer PI insurance quotes and greater fees compared to previous years.

We can help you

Although we can’t do anything about the aforementioned market forces, our extensive experience in insuring construction and maintenance companies 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 and ask for help.

 

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