Preventing Process invalidating your Construction Risk requirements

Construction site managers continue to suffer pressures from two main areas in early 2021 – the requirement to keep their risk management in order, despite an ever-changing pandemic picture and the ongoing issue of obtaining relevant insurance cover at an affordable price. 

COVID-19 site safety and the management of employees, sub-contractors and other workers in on-site situations, continues to be taxing. Those site managers who believed they could rely on site access cameras to take temperatures and check for COVID-19, have instead had to just use these to restrict entry to site and check face mask wearing on arrival, following strict Government warnings about the use of devices that have no medical validity.20 

Given the age profile of the majority of construction workers and contractors, vaccination rollout will not be removing employee sickness and absence challenges for some time. Despite the need to progress with projects falling behind schedule, where potential financial losses under contractual terms could be experienced, construction managers should be very aware that the law does not allow pressure to attend work to be exerted on staff – no matter how open the site may be – if they have COVID-19 symptoms or a requirement to self-isolate. Fines can result, if an employer forces workers to attend the workplace.21

With the pandemic having governed daily life for nearly a year, construction firms have to have put their COVID-19 risk management process into practice. Social distancing, the staggering of site arrivals and departures, the establishment of work ‘teams’ and the operation of one-way entry and exit routes, plus strict controls on the numbers of staff in toilets, rest rooms, canteen areas, shower blocks and other communal facilities at any one time and the regular cleaning of shared tools and equipment, should all be second nature by now. 

Enhanced washing facilities should have been increased or developed as part of site planning; face masks should be worn by anyone working in enclosed spaces or with others they do not normally meet, if Respiratory Protective Equipment is not worn for the tasks undertaken. The number of workers in shared company vehicles should be restricted.22 

Whilst operating best practice in such risk management scenarios would typically assist with keeping insurance premiums in check and even lowering them, during times of a softer insurance market, the rewards are not to be found at present. The insurance market hardened considerably, even pre-pandemic, with this reflected in higher premiums and more exclusions – or ‘deductibles’ within cover. 

Insurers have not only become nervous about cladding and fire-related risks, but also about the possibility of water damage within projects. Policy terms and conditions are regularly changing and premiums for some liability covers have increased by 100% or more. Quotes are often honoured for just 30 days, before the premium is reconsidered. Often, insurers are nervous about being first to quote, with a reluctance to provide other insurers with a baseline from which to provide their own offers.23 

Obtaining broad-based coverage is undoubtedly very difficult to do at present but it is not impossible. What we are finding is that insurers will respond far more favourably to those clients who have a broker presenting their risk in as good a light as possible. Thorough, well-researched presentations to insurers are proving their worth. 

Whilst this has been true previously, insurers are asking for extremely indepth information now, which requires tenacity and a willingness for hard work on the broker’s part. Insurers are also taking considerably longer to review risks and reach decisions. Whilst less senior underwriters had an autonomy and authority to offer terms in the past, they are now often having to refer their suggested offer to the highest tier of the underwriting department, so as to gain the necessary permission to quote. The whole process can require several months, so leaving things until the last minute can result in a construction company having nowhere to go in the short-term, other than perhaps towards acceptance of an extraordinarily high quote or a policy with crippling restrictions. 

Despite other pressures imposed by the pandemic, it is vital for construction sector companies to get expert insurance brokers on board swiftly, as premium rises are likely to continue for both single project placements and annual construction programme insurances. 

To sum up, without such dedicated and in-depth support, construction firms may find that their insurer refuses to quote. Without insurance in place, no construction work can continue and no tender pitches, to secure future projects for the order book, will be possible.

22 https://www.chubb.com/uk-en/business/health-safety-elearning.html
23 https://www.willistowerswatson.com/en-GB/Insights/2020/06/construction-insurance-market-update-the-reaction-to-covid-19