Returning to work? Inform your insurer of contract changes to stay covered
Posted by: electime 12th August 2020
The construction industry is slowly getting get back to work, with many professionals in the sector returning to new and different types of contracts. ECIC, providers of specialist insurance to electrical and construction contractors and trade associations, is warning that failing to inform your insurer of any changes to the nature of work undertaken could render insurance invalid.
A recent survey showed that in May, the UK had the fastest decline in UK construction output in 23 years. The vast majority of survey respondents (86 per cent) reported a reduction in business activity since March, reflecting widespread site closures and shutdowns across the supply chain in response to the public health emergency. Housebuilding and commercial work were the hardest hit, so it is expected that many people in the industry will want to return to work as soon as possible.
The return to work, for many contractors, could mean taking on different types of contracts in order to maintain revenues. However, if the type of work has changed, this would need to be declared to the insurer to validate the cover and ensure pay out of future claims.
Richard Forrest Smith, ECIC’s CEO, said: “Getting back to work is the main focus for many contractors following the lockdown, whether they be electricians, plumbers or builders. In order to secure work, many may need to take on contracts outside the scope of their usual activity. Where this means a change in the nature of work, or how the activity is carried out, the contractor should check with their insurer to ensure they are still covered.”
Forrest Smith uses the example of a business that has historically been a commercial electrical contractor and is now diversifying into mechanical and interior fit-out projects. The organisation’s risk profile will almost definitely have changed so the insurer needs to be informed. ECIC recommends contractors review their policy documents to ensure any new activities are covered.
Richard Forrest Smith concludes: “If contractors are unsure about their cover, they should check with their broker or insurer. It’s better to know now before a claim is made and then denied on the basis that the nature of a project is materially different to what was disclosed to the insurer.”
For further details of the covers ECIC provides for electrical and other specialist building services contractors, contact your broker or ECIC by visiting https://uk.markel.com/insurance/business-insurance/sectors/electrical-contractor-insurance
