Despite feeling the strain from the uncertainty caused by Brexit, the UK construction industry is continuing to grow. However, with the impact of Brexit, we could see a speed towards offsite construction and robotics. We look at how this is this going to affect the insurance requirements of companies in this sector.

With uncertainty arising as a result of Brexit and a shortage of skilled workers in the construction industry, firms have begun to innovate, turning towards technological advances such as offsite construction and the use of drones onsite. CLA are well aware that with ever-changing and developing technology in this sector, the associated risks will also evolve alongside these advances. As construction industry insurance specialists, we are well placed to advise our clients on the implications this new technology will have on their insurance requirements.

Setting aside these new evolving risks, the construction industry continues to operate within high-risk environments. The risks are myriad: working onsite, working at height, working in different environments each day, working under different supervision and direction and injury can be easy to come about. In 2016 3% of workers sustained a work-related injury which contributed to 2.2 million days off that year (Health and Safety Executive report).

Furthermore, those in the industry are often working on third-party sites and in premises where they are exposed to third-parties and their property. Employers’ liability insurance is a legal requirement and most businesses will be aware of this, but they might not fully understand their potential exposure from injuring a third party or damaging their property when working on a private dwelling house or a shop. This is particularly common for smaller businesses.

The other area of risk, highlighted in our previous article, is the fact that your insurance will not cover the cost of an HSE investigation or subsequent fine. www.clarisksolutions.co.uk/2017/12/05/hauliers-and-construction-companies-ignore-health-and-safety-risks-at-their-peril

It’s a niche and complex area. You need specialist underwriters and specialist risk managers that are up to date with the industry and understand the pace and speed of change.

Drone_over_building_siteRobotics
Machine rather than man will be constructing the buildings of tomorrow, with robots taking on the manual tasks, driverless bulldozers and diggers supporting them and drones flying overhead to monitor progress and carry out site inspections.

It may sound a bit sci-fi but these forms of technology are already being used on many building sites. For instance, in its Global Construction Survey 2016, 42% of respondents said they used drones to monitor construction status.

Whilst the commercial benefits of drones are clear, there are still concerns around mid-air collisions or loss of control, plus the potential for refusal of third party claims involving drones operated by, or on behalf of an insured business. *

Adoption of these technologies in the construction sector has a number of advantages. As well as helping to address the skills shortage by removing the risk of human error, it will also reduce the number of worksite accidents.

Source: KPMG, Global Construction Survey 2016, Building a technology advantage 1

* CLA can provide drone insurance as part of our Aviation and Aerospace product suite.

We can also provide the following support for the construction industry to help keep you fully covered during this period of growth:
  • One-call access to expert advice: Delivered by specialist construction risk control surveyors and our provider’s in-house inspection engineers team.
  • Flexibility: Our experts in London, Manchester or Birmingham can offer 24 separate covers under one module policy.
  • Specialist construction claims service: Expert engineering, property and casualty claims teams and expert construction loss adjusters will oversee construction claims.
  • Legal services: Offering more ways to manage costs through legal risk and compliance solutions, with a specific focus on HSE legislation.