Information Contractors Really Need to Know
With new regulations and the onset of the Insurance Act many contractors that work in the construction industry may be in for some nasty surprises when renewing their insurance. However, it's not all bad news and for those who are underinsured will now find their cover protects them correctly.
So without further ado let's take a look at some of the things you ought to know, what the changes mean to you and how it may affect you and your business.
The Insurance Act 2015 and What it Means.
In basic terms, the Insurance Act puts the onus on brokers and insurers to ensure they do everything in their power to collect every vital piece of information about your business including researching and investigating when the need arises. You may be asking why and to put it, in a nutshell, it is to ensure you are fully and correctly covered. It may, of course, mean that your insurance premiums will go up as many contractors may have purchased liability cover in the past that was insufficient. The upside, of course, is if you now need to make a claim it will more likely be honoured and your business and livelihood are less likely to be adversely affected should you need to fall back on your policy. You can find out more about the insurance act here.
Labour Only Sub-Contractors or Bona Fide What is the Difference?
Do you hire labour-only sub-contractors or are you using Bonafide sub-contractors? In case you didn't know the difference labour-only sub-contractors are defined as individuals or limited companies that are fully under the direction and control of yourself and are treated as direct employees where insurance is concerned. Bonafide sub-contractors on the other hand (Supply, fit & invoice) are deemed not to be under your direct control even when working on your contracts. Where your insurance is concerned, it means that your premiums will be lower. However, there are conditions in the policy that you must ensure these contractors carry their own liability insurance that has cover limits equal to your own and that you keep a register of the insurances.
Your broker may assist you in collating this information by way of an excel sheet in which you must include full copies of the contractor's insurance schedules. The contingent charge is made to cover situations when the sub-contractors insurers are not dealing with a claim or incident or in rare occasions it may be proven that bona fide sub-contractors may be deemed to be treated as employees if there is full direction & control of their activities while on the contract site.
Contractors Working With Heat Have New Conditions.
A condition of working with heat may affect the way you carry out your work. Primarily this will affect roofers and roofing contractors in that for every person using heat in their work must have a trained fire marshall working alongside them ensuring nothing goes wrong. You can read an earlier article we wrote this year just follow this link to find out more about working with heat conditions.
Scaffolders and Height Restrictions
With all the new contracts and the urgency in completing work on UK highrises after Grenfell, many scaffolding firms are finding their current insurance may be lacking or restrictive. If you are a scaffolding contractor and have been approached concerning high rise work, please pay particular attention to your existing policy and any restrictions concerning the limit on heights your liability cover allows.
If you have any concerns or unsure whether you have sufficient cover, please speak to your broker or contact us for a review of your liability insurance. Should you need to renew your policy; please take a look at what we can provide when arranging your scaffolders insurance.
Adjusting Your Level of Cover After a Claim
If you've had previous claims choosing the right level of cover could, in the long run, afford you better premiums, let us explain. If, for instance, you had a recent claim due to damage to a third party for which you were found liable how quickly could that claim have exceeded your current level of liability? Could someone have been injured? Could there have been disruption to your business?
Let's say for example you currently have £1 million liability and a recent claim for argument's sake was £300,000 was there a chance it could have been higher? If this was the case perhaps asking for £2 million liability when you renew would not only be a good idea but would also indicate to insurers that you take your insurance seriously, and you are a responsible business owner. While the higher level of cover would cost a little more, it would also reduce the chance of an insurer or broker refusing to quote. In the long run, you would find your premiums to be better than a business owner that only wants the cheapest premium and the lowest cover they can obtain.
There is Good News for Contractors
Yesterday's budget looks promising for housing projects with Philip Hammond putting aside £44 Billion for housing. How that will equate to spades in the dirt is yet to be determined, but it could be promising for the construction industry especially after all the raises in IPT over the past few years which affected contractors more than most.
We shall keep an eye on the developments in this area and keep you informed of any changes that come to light.