Commercial contract works projects don’t always involve renovating existing buildings. One recent development we worked on was the construction of a 66-room care home in Lancashire, built from the ground up after the demolition of a pre-existing property. The underwriting of this specialist policy raises valuable insights into the complexities of insuring timber frame builds, which often pose unique challenges in the insurance market.
Timber Frame Challenges
The policy request came to us through a new broker partner who was struggling to place insurance due to the risks associated with timber frames. Timber construction is typically seen as higher risk, which can make securing adequate insurance more difficult. However, after gathering detailed information about the project, we successfully arranged comprehensive cover through Allianz. While the overall premium was under £20,000, the timber frame aspect and mid-project involvement made the process much more intricate.
The broker on this occasion was incredibly supportive in advising the client, and in obtaining the right information. Both around the project to date (what works had been undertaken, what remained, reasons no insurances in force), and also around the timber specifications in respect of the materials being used alongside the contractors experience. It was this exceptional cross project communication and highly detailed insight that enabled us to consider and review the risk fully.
Commercial Contract Works: Not Just Renovations
A common misconception is that commercial property projects always involve renovations. In this case, the project was a complete demolition followed by a new build, meaning we had to focus on insuring the construction works from scratch. This involved putting in place the right coverage for all the stages of the build, ensuring the project was fully protected from the moment we took over the policy.
Uninsured Period and Mid-Project Takeover
When we were brought into the project, construction had already progressed significantly. Around £2.4 million worth of work had been completed, including building the foundations and two floors of the timber frame. The project was already 7 months into its 15-month timeline when the contractors left the site leaving the client uninsured.
During our initial scoping we discovered that the project had been without insurance for seven months, posing a significant risk. Our Renovation Asset policy was instrumental here, offering coverage for the ongoing work while excluding any pre-existing damage unless specifically agreed upon with the insurer.
Lessons Learned
This project serves as a crucial reminder of the importance of regularly reviewing insurance coverage throughout a project’s lifecycle. Particularly with complex builds like this one, ensuring the right policies are in place from the start is essential to avoid dangerous and costly gaps in coverage.
By working with specialists and securing products like our Renovation Asset policy, clients can ensure their projects are fully covered, no matter the complexity or stage of the build.
Our in-house specialist underwriters work closely with commercial and private client brokers to ensure property renovators are fully protected throughout their projects. Brokers holding a TOBA with Renovation Underwriting can log their contract works policy enquiries in our dedicated Broker Hub, in order to gain a contract ready quotation.
Stay tuned for more behind-the-scenes case studies, where we showcase unique projects and the tailored insurance solutions we provide to protect them.
