For those who didn’t already know, there’s a hard market brewing. This means insurance cover will be notoriously difficult to secure, particularly at an affordable price.
A hard market happens for a number of reasons. When insurers start to lose money – for whatever reason – they start to look for ways to recoup it. This usually results in insurers boosting their premiums for policies, or restricting the cover they are able to offer.
Some insurers may even withdraw from the market altogether. The more competitive the market becomes, the more insurers are able to charge for a policy.
The impact on the construction industry
The COVID-19 pandemic, Grenfell tragedy and increased frequency and severity of claims in the industry has led to a widespread rise in Professional Indemnity premiums.
You may wonder why your premium has risen, when your risks haven’t changed. Unfortunately, risk is spread throughout an insurer’s business. So a rise in Business Interruption claims could impact Professional Indemnity or Public Liability policies too.
The best way to avoid premium increases is to prevent your risk in the best possible way. Insurers want a clear view of your business, and it’s up to you to prove you’re a safe bet. What is your claims history like, what risk management policies have you put in place and how seriously do you take health and safety? If you can prove you’re doing all you can to prevent accidents, incidents and subsequent claims then your insurer is more likely to look upon your business favourably.
Working with a broker is an effective way to insure your risk is presented in the best light. Brokers will get to know your business and help you to bolster your risk management strategy. They’ll analyse your claims history, assess your risk and help you to put mitigation measures in place to prevent incidents from occurring.
Brokers are not just experts at getting to know your businesses and its risk. Brokers also know the insurance market. They know the best insurers to approach for a quote (and when to approach them). Insurers are more likely to enter into negotiations with a reputable broker they trust.
Presenting your risk
What measures have you put in place to go above and beyond? Enhanced security or flood defences, for example, are a great way to show insurers you’ve assessed your risk and put mitigation measures in place. It almost goes without saying that you should have thorough and up to date Health and Safety policies and risk assessments.
You should also reduce your Estimated Maximum Loss by presenting a sound Business Continuity Plans. This shows you’ve thought about what you’ll do if your business suddenly has to temporarily stop trading, in order to minimise down time.
Another key consideration when presenting risk, is presenting who’s looking after your business. If you can show that the people who run your businesses are reliable and trustworthy, you can demonstrate that your business is in good hands.
Be prepared for the change
The position of power has altered. In a soft market, customers ask: which insurer should I choose to work with? Now, in a hard market, it’s all about trying to convince an underwriter to work with you. From presenting a sound risk management strategy through to working on your business’s corporate social responsibility, underwriters want to know every detail that could impact your risk.
Be prepared to present your business in the best light, with a broker on hand to help you.
Don’t accept an increased premium from a lazy broker. Speak to the award winning team at Romero and find out why the hard market doesn’t need to mean a raw deal for you.
Call 0113 281 8110 or visit romeroinsurance.co.uk.