With Professional Indemnity (PI) premiums increasing in the construction industry due to a hardening market, getting adequate cover at an agreeable cost can be challenging. Here’s how Gallagher helped GRM Development Solutions navigate these challenges at renewal to achieve a favourable outcome.
As our company headed into 2020 we were already expecting to face higher premiums for Professional Indemnity insurance due to the rate rises we had seen in the previous two years. Following the Grenfell Tower tragedy in the summer of 2017, the construction industry has also seen a reduced offering from the insurance market, as the issue of combustible cladding became a catalyst for caution for insurers.
We were aware that PI premiums had already begun edging up after many years of being relatively competitive. But now, the combination of rising rates and restricted cover would almost certainly bring challenges for our business in getting sufficient cover at a competitive price. On reading the Lloyds Performance Review 20181, we saw that further rate increases were expected in 2019, and sure enough, when it came to our 2019 Professional Indemnity insurance renewal, our costs doubled to 2.4% of our turnover.
With the date for our 2020 PI insurance renewal on the horizon, we decided to talk with a number of insurance brokers to discuss how we could achieve the desired outcome. We selected Gallagher to help us through the process because they seemed to have more direct contact with the underwriters who price the policies.
Right from the word go, the team at Gallagher acted quickly and professionally, putting forward a plan that helped us start the renewal process early. This began with Gallagher conducting preliminary talks with insurers and compiling the necessary information. The team then arranged calls for me with two underwriters which meant I could discuss the real risks associated with our services, rather than ones they perceived from an insurance proposal form.
Of the companies we met, Gallagher seemed to have more direct contact with underwriters that price the policies.
Because insurers are asking more questions now, I wanted to be sure that from an underwriting perspective we had a broker on our side with the necessary experience and knowledge to achieve cover that was able to meet our requirements. Gallagher was able to do this for us and the overall result was a slight reduction in our insurance costs which, in the current climate, is a massive win.
Dr Bill Peacock
Managing Director - GRM Development Solutions
