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payments can be, in some cases, by multiples. This is out of step with the rest of the UK and also with the Republic of Ireland. Awards for the same injury here would be significantly higher than in any other region. Insurers are going to have to look at taking account of that in their premium calculations for liability insurance.” The third issue to be aware of refers to property, particularly, with relevance to contractors, ‘Contractors All Risks’ insurance. This has been impacted by the hardening market both in terms of rate increase, but also in the more granular level of information required by insurers. Timberframe construction also makes many insurers very nervous and some will not write this area of business. Finally, in common with all business, Contractors are not being spared by cybercriminals. We have seen an increase in both the frequency and severity of ransomware attacks recently and Insurers are looking for a high level of cyber security maturity within a business before offering Cyber Liability terms. SOLUTIONS So how does a construction company best prepare for these insurance challenges? “It’s all about taking a professional approach to an insurance renewal,” said Trevor. “One of the key things is the importance of acting early. The renewal process should ideally allow for at least 90 days before a renewal date. “Also, it’s very much dependent upon quality information, and that’s where ABL, as an expert insurance, brokerage risk advisory agency, comes into our own. It’s really all about presenting the client’s risk profile. Our job is to sell that to an insurer and to convince them. We do this by delivering a quality presentation that will attract the attention of an underwriter. ABL, having the skill and the professional ability to do that, coupled with our large scale and muscle in the market, enables us to secure the best possible deals.”
“ABL, having the skill and the professional ability … coupled with our large scale andmuscle in themarket, enables us to secure the best possible deals.”
professional indemnity insurance. The market became difficult due to several insurers suffering losses, therefore, exiting from the market. That created a reduction
challenge is the impact of the interim Ogden Rate and its possible further impact on liability insurance. “The Ogden Rate is used by the courts when calculating compensation and personal injury cases. It was designed to ensure that claimants were not under- or over- compensated. This adjusts the personal injury damage award to take into account the return expected over time when a compensation sum is invested. “The dilemma has arisen here, because, in March 2021, the Northern Ireland Department of Justice announced that it will change the personal injury discount rate on an interim basis, from plus 2.5% to minus 1.75%. “This will significantly increase settlement payments made in personal injury claims, which incorporates loss of earnings and or care. The effect on the settlement
in capacity and soaring rates. “Another consequence was the
commonly requested ‘Any One Claim’ basis of cover, which became almost impossible to acquire. Now, the market standard would be an ‘Aggregate’ limit indemnity. “Restrictions in the scope of cover have exacerbated that hardening market,” added Trevor. “A typical example, which stemmed from the Grenfell Tower tragedy, is fire safety limitations becoming standard. In the worst situations, some insurers have been unable – at any price – to obtain the level of cover that they once carried.” A second, uniquely Northern Ireland
T: +44 (0)28 9344 6347 E: trevor.mcclintock@ablinsurance.co.uk www.ablinsurance.co.uk
www.northernbuilder.co.uk
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