Surging premiums are jeopardising businesses across the sector, from surveyors to scaffolders. Professional indemnity insurance rates are up 350% and rising for some surveyors – the RIBA Insurance Agency says hikes of 25% for architects are not uncommon. QSs are bracing themselves for premiums to treble this year, and lawyers say consultants' excess could rise from tens of thousands of pounds to more than £100,000.
According to the Association of British Insurers, employers' liability premiums have doubled in five years. The insurance crisis will become so severe this year that it may bring sites to a halt by Easter, according to leading roofing subcontractor Ray Webber – his profession has been overwhelmed by insurance increases of 500% or more.
The Engineering Employer's Federation has been at the forefront of employers' campaigns for an investigation into insurers' charges and its lobbying effort seems to be paying off. The construction industry's insurance woes have finally attracted the government's attention. At the National Specialist Contractors Council's annual lunch last month, construction minister Brian Wilson said he was aware of the problem, and warned: "Part of the problem comes back to the industry's poor health and safety record. I know it is particularly galling for good employers to be tarred with the same brush as unscrupulous and unsafe competitors, but it happens."
And there's more good news. Chancellor Gordon Brown announced a review of employer liability insurance in his pre-Budget report. And in December, the Office of Fair Trading launched an investigation into the liability insurance market and other forms of insurance.
In the meantime, the industry is trying to find its own methods of tackling the crisis. One idea is to create single project insurance that could cover each member of the project team for the first 35 years of a building's life. The Movement for Innovation is researching this and other forms of project insurance, and BAA's use of single project insurance will be eagerly watched for signs of success.
The year ahead
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