The Construction Confederation has called for contractors to ensure that providers of employers' liability cover stick to the guidelines set by insurance bodies.
Best practice guidelines drawn up recently by the Association of British Insurers and British Insurance Brokers' Association recommend that insurers should give at least 21 days' notice of renewal terms.

The confederation had been lobbying for a realistic timeframe in which policy renewals should be sent to firms.

Construction Confederation chief executive Stephen Ratcliffe welcomed the good practice initiative but warned that enforcement of the guidelines should be carefully monitored.

Ratcliffe said: "If we find this initiative is not working, we will press government for statutory rules to make sure that minimum notice periods become standard industry practice."

The insurance associations have also recommended that insurers notify brokers of renewal terms not less than 21 days before renewal, with brokers urged to pass the terms to the policy holder as soon as possible.

The move follows an insurance crisis that has gripped the construction industry for months, with many specialist contractors facing premium rises of up to 300%.

Specialist contractors have been suprised by short-notice premium increases and many have been forced to operate illegally, unable to afford cover.