Focus on avoiding costly project losses
Andy Slater- 3 months ago
BISHTA has teamed up with Nsure Insurance to highlight that wet leisure project specialists conducting contract work need to dig into appropriate insurance cover to avoid financial loss from theft or damage.
The association is sharing advice from Nsure Insurance Account Manager Michael Bickers, who has reported that theft is the main cause of claims for construction equipment. He has also revealed that theft of hot tubs is another reason for submitting an insurance claim.
During a long involvement of arranging insurance for companies in the wet leisure industry, including providing the Nsure Spasure and Nsure Poolsure specialist policies, Nsure have handled many claims for damage to contract works over the years and have seen losses from a number of causes. Along with water damage, these also include bleaching or reactions from chemicals, and mechanical, lifting or handling malfunctions.
“We have always felt that it is not without a certain irony that water is a frequent cause of claim,” divulged Michael; “Prior to completion many sites will have a susceptibility to water damage either directly by storm/rain or the subsequent flooding or saturation of the ground and we have dealt with claims where a pool has lifted or ‘popped out’ of the ground.
“Most will appreciate the risk posed from the likes of fire or storm if building a house or industrial unit, particularly as a project nears completion, but with other construction sites, external swimming pools being an example, some may underestimate the vulnerability of partially complete works to the elements or alternatively, simply decide to take a chance.
“To some extent that is understandable, contracts can be of relatively short duration and the values, of at least the part of the contract perceived to be at risk, may not seem significant, however, unexpected events can and do occur and are sometimes from unanticipated causes.”
While the majority of installations run smoothly for spectacular results like the BISHTA 2024 Gold Award-winning example from Hot Tub Suppliers, pictured, Michael has revealed that when claims occur, they can often be expensive and complicated, especially when the extent or cause of damage is not visible straight away; which can often result from a large section of the work being covered up.
“Multiple contractors on larger contracts can also be a complication,” explains Michael; “and the greater the complexity, the greater the cost of rectifying any damage, hence Contract Works (also known as Contractors All Risks) insurance is usually a contractual requirement for larger projects but is, for the reasons already outlined, also recommended for all contractors.
“There can be a misapprehension that damage to the Contract Works will be covered by a Public Liability policy however the vast majority of Public Liability policies do not provide any cover for contract works, they are designed to cover damage to third party property or injury to third party persons.
“Where any cover is provided, and the Nsure Poolsure and Spasure specialist policies for the industry come into this category, it tends to be for losses arising from defective design or workmanship, although the Public Liability cover extensions compliment rather than replace the need for Contract Works insurance.
“Contract Works policies usually provide some cover for losses arising from defective design or workmanship but only for the consequences of the defects, not rectifying the actual defect itself. This is another area where cover and any claims can be complicated, and as our experience is that these issues tend to manifest themselves after construction has been completed, there is the difficulty in establishing under which type of policy a claim will be covered.
“It is one of the reasons we always recommend that contractors have Liability, Contract Works and Professional Indemnity insurances to provide cover for all the eventualities that are generally insurable at realistic premiums.
“One last important point relating to the Contract Works is that the insurance cover will be subject to the insured party being responsible for the damage under any contract conditions that apply, which with some conditions such as JCT contracts, will stipulate who is responsible for arranging insurance on the project.”
Michael has also highlighted that an additional benefit of these policies is the capability to gain cover for tools, plant and equipment whether these are owned by employees or the company or hired in.
“Unsurprisingly theft is the main cause of claims for construction equipment and most insurers will impose security restrictions for items either left on site and particularly items left in vehicles overnight,” divulged Michael.
“Excesses are also normally set at a level to exclude smaller losses. It can be a valuable cover but make sure you are aware of any security conditions or exclusions and the level of excess before deciding whether it is worth insuring.
“With hired plant, whilst cover is available under a Contract Works policy, it may be worth taking the cover that is often offered by the hire companies, simply to keep any claims that occur off your policy and avoid being penalised with the higher premiums that can result.”
