Growing costs of materials within the construction industry is having a knock-on effect with building insurance and the potential for underinsurance. Why is this, and what can you do to protect yourself?
The risk of being underinsured has increased as a result of growing costs in the construction industry, and it is anticipated that labour and material costs will continue to rise well into 2022, so ensuring your commercial building sums insured are at the right level is more important than ever.
What you need to know about rising construction costs
Covid-19 related lockdowns, Brexit, and an unanticipated surge in demand for renovation works have all played a role in creating supply chain issues and labour shortages. The main drivers of this increase of costs are:
- Escalating shipping prices and delays at British ports are causing shortages of crucial parts and materials.
- The Builders Merchants Federation (BMF) reports that timber prices had surged by 20% by the end of January, while some roofing parts are likely to be unavailable until August.
- Shortages of insulation, plaster, concrete products and even power tools have been experienced in recent months.
- Figures from the Construction Products Association show that the UK lost more than a quarter of its EU-born construction workforce between January 2020 and January 2021.
What steps can you take to protect yourself?
The simple solution is to insure for the up to date, correct amount. Normally, this would involve finding a trusted expert who would visit the property to complete a professional assessment. This can be both time-consuming and expensive.
At Turner Insurance Group, we work closely with Rebuild Cost Assessment, who offer a unique low-cost online service. They can provide you with a comprehensive report without ever having to visit.
With this service, you will receive a full report backed by RCIS, (The Royal Institution of Chartered Surveyors) of the bespoke rebuild sums insured, confidence that the policy covers you correctly, and peace of mind that in the event that the worse should happen, you will get the full support from your insurer.