Insurance
Significant cost increases and the introduction of new restrictions on professional indemnity (PI) insurance and gaps in Construction All Risk are preventing companies taking on projects and could delay essential work on building safety.
FIS are aware of the growing issues within our supply chain regarding requirement, availability, and escalating cost of insurance (particularly professional indemnity), but also overall concern regarding support for our sector from the insurance industry.
Our remit from the Board is challenge and, if necessary, disrupt and we are considering a number of potentially radical options to address this challenge to our members.
As part of this work FIS has been working through the Construction Leadership Council Insurance Group and was instrumental behind the statement below linking better behaviour to better insurance outcomes. FIS is also working with insurance providers to bring new products to market.
Below is a summary of key updates on this growing insurance crisis. If you are interested in finding out more or getting involved in this work email davinderjhamat@thefis.org.
It is the view of the CLC, that standard form building and engineering contracts and professional services contracts issued by contract-producing bodies, should be used by clients with no amendments, except where necessary in the context of project-specific risks and relationships.
The CLC believes that onerous amendments make contracts unviable, reduce competition, increase risk and lead to unnecessary legal costs required to review legal liabilities created by the amendments.
The CLC’s Professional Indemnity Insurance Working Group has identified that too often standard form contract terms are being amended, to include liabilities and obligations that are disproportionately onerous for the nature of the work ….
This means that if a client seeks to claim for loss or damage, it cannot be relied upon that it will be settled by the PII insurers, and the consultant/contractor potentially faces financial ruin, and the client left with a claim that cannot be recovered. This is not in the best interest of any party.
Insurance impact in the wake of the Grenfell Tower fire
In the wake of the Grenfell Tower fire, anecdotal evidence emerged of fire insurance companies...