In the modern world construction companies face a unique range of challenges, from the protection of property and people, to the maintenance and development of governance and legislation obligations. And as their broker, you need to understand and empathise with these challenges.

This risk insight, aims to help increase awareness and demonstrate how some of the more common risks faced within the construction industry can be mitigated.

The construction industry in numbers

  • Each year in the construction sector around 3% of workers sustain a work-related injury
  • In 2014-15 there were 69, 000 cases of self-reported work-related illnesses
  • In 2014-15 there were 1.2 million working days lost due to work-related ill health and 0.5 million days lost due to workplace injury

Changes in construction methods

The way buildings are designed has come a long way in recent years. Driven by influences in architecture and pressure from the government to increase the supply, houses need be built quickly whilst also being more carbon neutral. Construction methods today focus on producing cost-effective and energy-efficient buildings, by using a wide range of innovative designs and materials.

Modern methods can be split into the following categories:

  • Volumetric/modular buildings – site assembly from modules and pods made off-site. A typical house may contain four modules, plus a roof module and floor cassettes
  • Pod – a smaller fabricated unit, for example, a bathroom or plant room that arrives on site fully fitted or plumbed etc.
  • Panellised – flat panel units ranging from framed panels in either timber or steel, to concrete and composite panels such as Structured Insulated Panels (SIPs)
  • Hybrids (aka semi-volumetric) – a combination of the above
  • Site-based methods of construction – systems that do not fall into the above

It’s important to note that due to less time being spent on site by contractors, off-site manufacturers can offer better workmanship at lower cost as ‘modular pods’, for example, are often far quicker and cheaper to manufacture off-site. However, these risks need special consideration as the nature of materials used can increase the risk of fire, water damage and subsequent costs.

Site Safety

According to HSE statistics, 10% of fatal injuries and 2% of reported non-fatal injuries are ‘persons on construction sites that were struck by a moving vehicle’.

Mobile plant includes any moving vehicle or equipment on site including excavators, telescopic handlers, mobile elevating work platforms (MEWPs) and dumper trucks. Some of the common hazards of mobile plant include:

  • People or plant sharing the same site or route
  • Where there is uncontrolled entry to and from the site
  • People using mobile plant inappropriately

With todays regulations being more far reaching than ever before contractors need to be up to date with the modern demands of their business. Miles Smith can assist in this area, from systems to ensure compliance to providing financial assistance if the worst should happen and the HSE intervene.

Site security

The valuable materials and components of modern construction sites, such as the plant and machinery, can attract thieves keen on making a quick profit. In 2015 around 70% of property claims were for losses relating to theft. Arson and malicious damage incidents can also be very costly, often disrupting and delaying contract completion.

It’s crucial to make sure that adequate precautions are put in place at the right time, including the security of the site perimeter, CCTV, and the guarding and physical security of the plant and machinery. Making sure that plant and machinery is identifiable can often deter theft and, in addition, it helps the police determine proof of ownership and aid its recovery in the event of loss.

Professional Indemnity (PI)

New or innovative types of design can also lead to new PI claims if the design proves to be defective. Modular buildings and fabricated unit designs can leave very little room for errors.   Firms involved in any part of the design process, or in an “overseeing” capacity (project management or co-ordination), should carry PI insurance. This includes providing a full Design and Build service, the construction and installation where the firm has subcontracted the design but retains overall responsibility, the pure design or technical services with no construction, and the construction and installation only, where the client has provided their own designs. As PI is arranged on a “claims made” basis, insurance will need to be continuously maintained for several years after the project has been completed.

As well as having access to all of the London PI Market, Miles Smith operates two in-house PI facilities which are able to cater for the vast majority of enquiries received. Not only are these facilities very flexible, but the extremely competitive rating helps to ensure that the business is won and retained.

Miles Smith and the construction industry

Miles Smith is very experienced in the placement of risks within the construction industry. Our long standing relationships with both Lloyd’s and company insurers allow us to support large capacity requirements, plus we have the ability to design bespoke placements that ensure the unique needs of each insured are met. We provide a comprehensive solution to cover employers’ liability, public/products liability, contractors’ “all risks”, contractors’ plant and equipment, professional indemnity, and commercial fleets often written on unique and exclusive wordings.


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