What insurance carriers can learn from construction catastrophes
When it comes to the liability and risk of construction projects, companies must consider not just the initial build quality but future-proofing actions to protect developments from natural catastrophes and project failures.
From managing premium increases to changing risk profiles, there are some learnings for insurance carriers to ensure they are not left in the lurch by a construction catastrophe.
- Compliance concerns cannot be swept under the rug
Your insureds must be well-versed in changing legislation, compliance requirements and government investigations into their profession. Take into consideration the level of regulatory engagement and compliance activities your insureds undertake to understand whether they are fully aware of the environment they operate in or flying blind.
- Don’t wait for the dust to settle
Insurance carriers must respond as soon as any compliance or safety faults have been identified. As soon as your insured notifies you of a pending issue, make sure your team knows to open the communication lines and keep all relevant team members in the loop on the issue. This will ensure you can begin resource planning for any potential claims and build out a risk profile that incorporates these new findings.
- Risk and reputation go together
Your insureds’ reputation can easily dovetail with your own. When assessing an insureds’ risk, consider the specificities of their residential or commercial development and what regulations, compliance codes and government scrutiny might apply. The blame game of who is responsible for major faults can take many reputations down before an answer is clear, so it’s critical you have a comprehensive understanding of the environment your insured operates in and what the potential outcomes could be.
- Claims must be treated with care
We all know claims managers must handle every claim with care – but especially when sensitive topics like homes, personal livelihoods and lives are at stake. We work with insurance carriers across construction, engineering, certifiers and building companies and have found the best way to mitigate reputational damage and claim costs is treating all clients with care. Whether it’s expediting emergency accommodation or cash payouts to ensure claimants feel supported and safe, to working with the various stakeholders in the claims process or regulatory bodies to facilitate effective claims outcome.
It’s become clear that the intense demand in the broader construction industry has led to, on occasion, poor building practices and governance, a lack of compliance and significant oversight – and shone a light on weaknesses within the construction and building supply chain. The risks insureds and insurance carriers face in this space will continue to remain a complex challenge.
To speak to our expert team on handling construction risk and liability, reach out to us here.
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