Contractor insolvency remains one of the biggest risks that project owners, developers and investors face during works. Miller’s Construction team offer risk mitigation and tailored insurance solutions to protect your project from insolvency risks, as well as easy replacement insurance should the worst happen.
The effects of ISG going into administration is going to send ripples through the construction industry far and wide, and we’re yet to see the real, mid to long term effects on not only the landscape of the market as a whole, but also on other contractors and developers in the market. Construction continues to experience the highest number of insolvencies of all UK industries and shows continued growth in insolvency rates. The industry now accounts for almost one in every five UK insolvencies.
Contractors often assume responsibility for arranging the construction insurances for the duration of a project. But what happens if the contractor becomes insolvent mid-project? The contractor’s insurance contract will immediately be terminated, meaning your multimillion-pound assets on site are now significantly exposed to losses including theft, vandalism, arson, escape of water, collapse, storm damage, and others. In ISG’s case, up to £2.5 billion worth of projects that have been started on site across the UK are now exposed.
Finding a replacement contractor isn’t always easy, resulting in assets being exposed for a significant period of time. You’ll also discover that the insurances of your replacement contractor will often exclude works completed by the previous contractor.
We recently produced a white paper article to provide a multi-dimensional perspective for managing a contractor’s insolvency during the works. Please take a look at it here.
If you have any questions, please reach out to our construction expert Jason Baston Jason.baston@miller-insurance.com