Five ways to rein in your construction insurance premium
It’s reasonable to assume that increased competition among insurers would help lower premiums all round – but this is often only true during the first year of your premium, regardless of industry. As a policyholder, you might frequently find that, after a year, insurers return their premium to a financially viable rate, creating more expense for you.
There is no room for cutting corners in any area of construction, and the same goes for essential insurance. With these five tips, you can help bring your premium within budget, without taking a punt on an ineffective policy.
1. Risk management
It starts with pre-emptive measures, which can include a review of current health and safety policies, regular training, security investment, and best practice for onsite hazard prevention. Treat minor incidents or “near misses” as a golden opportunity to update your policy, and remind staff how important it is to be vigilant on site.
While insurance can support you in a difficult situation, it’s always better to be in a position where you don’t need it.
2. Choose the right insurer
It may seem counter-intuitive, but shopping around on aggregate sites is not always the best way of ensuring a good price long term. An insurer who truly understands your industry is going to have a better perception of your risks.
Some insurers have very onerous policy conditions, which, if breached, could leave you without cover in the event of a claim.
Once you’ve found your preferred provider, try and secure a longer contract with them, perhaps with a low claims bonus or profit share incentives.
3. Increase your excess
The more you’re willing to pay in the event of a claim, the more likely you’ll secure a cheaper premium. Just be sure that if you did need to make a claim, you would be able to afford the excess you’ve set.
4. Bundle or separate?
If you’re taking out all your cover through one insurer, it’s sometimes more cost-effective to have it pooled together in one policy, and is also a good way to manage all your protection at once. All-encompassing Construction Insurance can feature the cover options you need it to, including legal, liability, plant and delay in start-up.
On the other hand arranging separate policies can also have its plus points, as you can gain favourable policy features from different specialist insurers.
Don’t assume that because you’re taking out a package, there’s no room for manoeuvre. Often areas such as liability can be altered to fit your project, and other features can be taken away or added on, depending on what you need. An insurance broker can help you with this, which brings us to our next tip.
5. Look for an independent insurance broker
Ideally, one who has sound knowledge in the construction industry and connections to insurers who are renowned in this field. An intermediary who understands how insurance relates to your line of work specifically will be able to ask the right questions and negotiate an appropriate policy on your behalf, whether a “bundle” or separately arranged insurance covers are better suited to your circumstances.
They will also be up to speed on industry requirements, such as mandatory professional indemnity, collateral warranties and bonds, and have experience in handling claims.
At MCM we use our expertise to help you obtain a financially viable, efficient insurance package, at no extra cost to you.
By Steve Whetham, Director of MCM insurance
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