Huge rises in premiums put contracts in danger

4 September 2002
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05 September 2002 | David Arminas

Insurance hikes in the building and engineering sectors are set to put contracts at risk, according to the Construction Confederation.

The building trade body said increasing payouts by insurers in the past year meant that many insurers are either pulling out of the construction sector, as they believe it is too risky, or raising premiums so high that contractors will go to the wall.

"Supply chains face serious disruption if this continues," a confederation spokesperson said.

"If a contractor can renew its insurance at all, it is not uncommon to be 100 per cent up on last year.

"Some contractors are working without insurance and we don't condone this."

Mike Lowe, estimating director at civil engineering and building contractors Alpha Construction, said contractors in the Midlands are seeing subcontractors face big increases.

"Rises of between 80 and 300 per cent have been noted, but 80 per cent is the likely base rate," said Lowe.

Railtrack has said it is considering helping its smaller track-work contractors to meet big insurance rises.

SMsep2002

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