Methods of design and construction are evolving quickly in a sector that builds everything from skyscrapers and airport terminals to underground rail links and housing. But these projects come with significant risks that need specialist insurance.
Construction still relies on manual labour but is increasingly supported by sophisticated technologies embedded into every operational stage. To navigate today’s evolving exposures, businesses require insurance that is designed specifically for their unique needs.
Design and construction
Disputes over the specifications of a project and whether the design, build and/or materials used differ from what was initially agreed upon can escalate quickly. Perhaps the wrong materials were used or the physical construction does not have the same dimensions as those stipulated in the plans.
Errors and omissions (E&O)
E&O insurance provides cover for the costs associated with defending claims for losses arising from such mistakes. Insurance can also cover withheld fees during these disputes.
If a construction company is held responsible for injuring somebody or damaging their property, even if it was accidental or unintentional, it may face a civil claim.
Technology
Computer-aided design, building information modelling and AI-powered generative design are now part of everyday operations for design and construction companies of all sizes. So too are project management systems and procurement platforms.
If platforms fail or generate incomplete, inaccurate or inappropriate designs and/or models, it can stall projects and lead to losses. Insurance protects construction businesses from such losses and provides the support to manage any associated reputational fallout.
Cyber
Cyber attacks can freeze supply chains and put projects on hold. What’s more, they come in many different forms, from ransomware to phishing scams known to con construction companies into making payments against fake invoices or even deceiving account departments into changing account details to false ones, operated by the criminals.
Since construction businesses make regular payments to a wide variety of suppliers, they are an attractive target for fraudsters.
When cyber events hit, responding fast will limit impact and losses. Cyber insurance enables this response, providing access to the required expertise to act quickly and effectively, as well as the financial support to cover the associated losses.
Intellectual property
Intellectual property sits at the heart of many construction businesses, from the project plans they create to the products they develop or use under license.
New companies might try to piggyback on an established business’s brand, by using a similar name, slogan or logo. It’s easy to get too close and infringe on a competitor’s intellectual property.
Insurance helps to provide the expertise and financial support to pursue infringement claims against others and also to defend claims if construction businesses find themselves accused of infringement. The right cover also provides financial support for legal fees and settlements.
Source: www.cfcunderwriting.com
