Mark Herbert, MD at Construction Insure, says the use of price comparison websites by contractors such as independent builders, roofers, plumbers and electricians has led to a huge insurance shortfall in Britain’s construction industry.
He warns that around half of all UK contracting firms, including builders, plumbers, roofers and electricians, do not have adequate insurance in place to cover their works leading to massive risks for the property developers, homeowners and councils who employ them.
He is now calling for Housing Minister Dominic Raab MP to introduce legislation preventing price comparison sites from offering their service to contractors.
A change in the law is necessary to prevent independent contractors from being enticed into cheap insurance deals which fail to cover the work they undertake for clients.
Many are seduced by cheap prices as they can input what they want and are not given any professional guidance, as a result this will not be covering works adequately.
Mark has written to Housing Minister Dominic Raab calling for the use of a commercial insurance broker to be compulsory for all independent tradesmen and women.
He warns the use of price comparison websites is highly dangerous as contractors are left with an insurance policy which isn’t worth the paper it’s written on as it’s so full of endorsements.
He said: “Insurance is a serious business and if a contractor doesn’t have adequate cover it could be hugely dangerous to all parties involved in a build.
“Many contractors operate as sole traders rather than limited companies so if they were sued for inadequate work and found themselves uninsured they could lose their home and all their assets as well as their business.
“It really is that serious, yet many tradesmen and women underestimate how vital insurance is.
Many visit comparison sites, tap in the minimal amount of information needed for the cheapest quote and then they’re given an insurance document that looks the part when presented to customers.
“But these policies are cheap for a reason. The small print is filled with caveats and usually they only provide a minimal level of cover, often not adequate for the work the contractor does every day.
“A commercial broker on the other hand really gets under the skin of his or her clients. They find out exactly the nature of the work undertaken and are able to offer a policy which genuinely protects the contractor.
“With a broker, it isn’t possible to get an instant quote because each case is different. They take the time to speak to clients and find out the full information to make sure they are fully aware of the insurances they need.
“The use of price comparison websites may seem to be convenient but nothing is more inconvenient than having a crisis and discovering your insurance policy isn’t fit for purpose.
“From our enquiries, we estimate around 50% of all UK contractors do not have adequate insurance in place and this is largely due to the reliance on price comparison websites.
“I am calling on Dominic Raab and the Government to take action to prevent price comparison sites from offering cheap policies to contractors in the construction sector.
“Britain’s contractors carry out extremely technical works from piling and underpinning, to roofing works and loft conversations. There are knock on effects to themselves, the companies employing them and their own employees if they are not covered properly.
“This is a very serious issue and it is high time something was done to close this insurance shortfall.”
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