PI Insurance Feels the Effects of Rising Construction Claims

Recent records show that the number of claims made in the construction industry is on the rise, but the reasons for this are possibly not as honest as they could be.

In the cautious world that we live in, the greater the chance of a claim, and because of this the more important the need for insurance becomes. Professional Indemnity Insurance is what is necessary in this situation, protecting a potential contractor from mistakes made by negligence or professional error.

Disagreements and disputes over contracts are causing those in the construction industry, whether they are builders, surveyors or even architects a great amount of trouble when it comes to receiving full payment or even proper contracts for jobs that they have fulfilled. The reasons for this have been hinted heavily that it may be because companies are attempting to swindle the contractors out of complete payments, deeming jobs ‘unsatisfactory’ or claiming that they were massively behind an agreed schedule.

Whether these claims made against the construction contractors are ever proved successful or not however, unfortunately for the contractor, the costs and fees still apply concerning PI insurance. Lynn Hearsey, an established broker commented on the rising number of claims made in this field. "We have had a marked increase in claims against both our professional indemnity insurance and contractors all risks.”

Increasing claims in any profession results in underwriters and brokers having to study the PI insurance premiums in order to fit a changing profession. ‘High risk’ sectors of business are deemed as such in comparison to the amount of claims made and the potential of negligence cases being carried out. This rise of claims in construction may well lead to noticeable changes to the professional indemnity insurance policies agreed with such an area of business.


By:Seb Maley

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