Construction insurance is a complex business, not least because of the number of parties involved. Each construction project is based on teamwork between architects, engineering firms, contractors, subcontractors etc., all with the same objective in mind: the successful completion of the construction project as soon as possible. Yet conflicting interests sometimes get in the way of constructive cooperation. It is important, therefore, to clearly define each party’s responsibilities in advance, because not all parties are required to take out insurance cover. For example, an architect must insure their professional liability, but an contractor is not obliged to do so.
As a broker, we have an insight into all aspects of the construction process and corresponding insurance cover, which means that we can provide optimum support to each construction partner throughout the entire project. It also enables us to look after common interests and avoid unnecessary duplication in insurance cover.
Based on our expertise, we would recommend that a single common insurance policy be taken out to protect all parties involved in a construction project. This approach not only secures maximum peace of mind, it also promotes speed and transparency when a claim is processed. The client could take the initiative in this respect.
The construction industry is innovating rapidly. The introduction of new materials and techniques, the development of new legislation to establish the responsibilities of each construction partner (e.g. Peeters-Borsus Act), new partnerships that are being established, etc.
Moreover, construction projects are becoming increasingly complex and more technical, e.g. public tenders for major infrastructure works. This generates many new opportunities but also entails new risks for which the insurance industry needs to develop appropriate solutions.
Some current challenges:
- Evolution towards renewable energy
There has been a distinct trend in recent years focused on circular construction and renewable energy. A typical example are the onshore and offshore wind farms being built further and further out to sea. Battery storage is also becoming more significant, i.e. building batteries to store energy when excess energy is being generated. These relatively new trends require alternative expertise, resulting in the war for talent also being perceptible in the construction industry.
- Impact of price fluctuations
The construction industry is particularly sensitive to price fluctuations in energy, water and raw materials, which also has an impact on insurance. There is always a risk that you could be over or underinsured as a result. We have noted that underinsurance currently affects promoters in particular. They are faced with both rising building material costs and the value of the building rising sharply.
As a construction partner it is often difficult to determine the value you need to insure for a specific project. Especially when it comes to liability, one of the most important insurance cover aspects. We would recommend that you contact the client or Vanbreda for advice on the capitals that need to be insured.
Companies in the construction industry are all having to deal with ever-increasing risks, larger insured capitals and more extensive claims. As the technical complexity of risks increases, so does the need for expertise. Would you like to receive no-obligation insurance advice pertaining to your business? Use our contactform below
