How to get a more competitive quote when insuring construction work

Securing the right insurance cover is crucial when it comes to protecting construction projects. Such projects often operate within tight budgets, so it is essential to find competitively priced insurance that provides comprehensive coverage for all the construction risks involved.

Fidentia Insurance is an insurance broker with many years of experience supporting business owners and contractors in the construction industry. In this article, our specialists share the key ingredients that help secure a competitive quote for construction insurance.

 

Common insurance products for the construction industry

Before diving into how to secure a competitive quote, it’s good to understand the most common insurance products required by the construction sector. These are:

• Public and Product Liability Insurance: covers injury or property damage claims from third parties.


• Employers Liability Insurance: covers damages and compensation costs employees are entitled to, due to illness or injury caused whilst working for a business.


• Plant and Machinery Insurance: protects the equipment used on-site.


• Non-Negligence Insurance: protects property owners and contractors from damage to neighbouring properties that can't be attributed to negligence.


• Professional Indemnity Insurance: covers errors or omissions in professional services supplied as part of the project, such as design work.


• Contract Works Insurance: covers the works for the cost of repairing or redoing the work you have completed so far on a project. For example, it can include the tools, materials and labour needed to get the project back to where it was before the insured event occurred.


• Directors & Officers Insurance: offers directors and senior employees of a company protection in respect of claims made for breach of duty.

Understanding which products your business and projects need will help streamline discussions with your broker.

 

 

Key information to provide for a competitive quote

When seeking an insurance quote, preparation is key. Providing accurate and detailed information to your broker allows them to assess the most tailored and cost-effective coverage for you. Be prepared to provide the following information.

 

1_What does the insurance need to cover?

While this sounds like an obvious question it's important to know that, even though insurers offer general insurance products to the construction industry, tailored cover can often save money by excluding unnecessary protections.

It's therefore sensible to clarify your business/project's specific risks and elements. For example, does a project involve high-risk groundwork or complex structural work? Tailoring your policy to reflect the true nature of your projects avoids overpaying for irrelevant cover.

 

2_Breakdown of the contract value

Similarly, providing an accurate breakdown of a contract’s value helps insurers assess risk and determine the premium. Common construction elements include:

• Site enabling and preparation


• Groundworks and foundation


• Structural works


• Fit-out works

Discuss the components of any specific projects with your broker and guide them on the subsequent financial value in the contract.

 

3_Workforce details

The type of workforce on-site can influence insurance premiums significantly. Insurers will ask about the ratio of:

• Labour-Only Subcontractors (LOSC): These are workers under your direct employment (ie employees) and typically covered under your insurance policy.


• Bona-Fide Subcontractors (BFSC): These contractors operate independently and should have their own insurance.

A higher percentage of LOSCs typically increases premiums, so providing an accurate workforce split is vital.

 

 

Additional considerations

There are a couple of other considerations to be aware of when it comes to construction insurance.

Cover for theft or damage to plant and machinery equipment on-site can often be included in your policy. Discuss this with your broker.

Contracts often have specific requirements relating to insurance coverage. Some contracts, especially public sector projects (for government bodies or local authorities), may require specific insurance products and levels of cover to be in place. These requirements are often listed in tender documents, so review them carefully and advise your insurance broker accordingly.

 

 

Allow enough time for a quote

A well-prepared insurance quote takes time. Ideally, provide your broker with a minimum of 3-4 weeks’ notice as this lead time allows your broker to:

• Gather the necessary details of the business/project(s).


• Approach different insurers to find the best rates and coverage options.


• Answer any questions from those insurers.


• Tailor a policy that meets your risk requirements.

Partner with our experts

At Fidentia Insurance, our construction industry specialists regularly source tailored insurance solutions for projects of all sizes. We have a strong track record in helping our clients protect their construction projects with confidence. Whether you’re working on small developments or major public sector projects, we’re here to help you get the right cover at a competitive price.

To explore your options and speak to one of our experts, call us at +44 (0) 20 3150 0080 or email info@fidentiains.com to request a callback.