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In the UK, we now appear to be emerging out of the worst of the pandemic and industry is slowly returning to normal for the majority of sectors. As far as the insurance market is concerned, professional indemnity insurers still have various concerns around their insureds and how they may be dealing with a number of issues brought about by the pandemic. This is particularly relevant to the construction sector as insurers shift the spotlight onto matters such as liquidity, project delays, staffing levels and quality assurances.

There are a large number of insurers who have produced their own COVID-19 specific questions and they do vary between them. The below is a short summary for the questions that you can most likely expect at your next PII renewal.

Projects

Are all current projects running on time and to budget?

How is information needed, such as files in relation to present or past work, whether electronic or paper, remaining easily accessible to all?

Does the firm anticipate a significant reduction in annual income as a result of COVID-19?

Is the firm aware of any of its current sub-consultants or sub-contractors going into liquidation as a result of the pandemic?

Contracts

Has the firm traditionally include a Force Majeure clause in all contracts?

Are there any contracts where their contractual obligations have either been breached or are under threat of breach as a result of COVID-19?

If the firm is back on site, are all necessary procedures being adhered to in terms of social distancing, relevant working practices etc?

Staff

Does the firm have the ability to work remotely in way similar to being in the office? i.e. remote access to all core systems

What contingency plans do you have in place to cope with increased staff absence as a result of the pandemic

Has the firm furloughed any staff or otherwise reduced staff numbers?

How is the supervision of staff and auditing of projects being maintained during lengthy periods of remote working?

Depending upon your insurer, there may well be other questions but the best advice is to be prepared for these and expect them to be asked. As ever, submitting a renewal presentation in good time is by far the best strategy as these questions will inevitably take extra time to answer.

It is also possible that your insurers will impose some sort of COVID-19 restriction or exclusion on your policy from renewal. Be sure to have your broker clarify this and any subsequent effect that it may have.

Please contact your Account Executive or constructionpii@uk.lockton.com for more information.