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Whilst contractual creep has always featured, the impact of work taken on in a recession is likely to be felt differently this time round. Whether it be a company looking to diversify and enter a new sector or simply continue to operate in the same space, there will be difficult decisions to make in order to keep the business operating. For example it could be a case of pricing a project below your standard rate or equally having to agree more onerous terms than you would normally be comfortable with. The knock on effect of these decisions will most likely have some influence on your PII arrangements.

The challenge going forward is that we are seeing PII policies becoming more restrictive and therefore claims further down the line for projects undertaken now may well fall outside of your PII policy. Alternatively, if your PII policy does respond, you are likely to incur a larger self-insured excess in comparison to previous years. Prudent contractual risk management is therefore key when taking on new work or when deciding to make a commercial decision on a project.

Caytons Law have provided a seminar highlighting some of those challenges faced when navigating through a recession and the impact this will have when negotiating contractual terms. 

Click on the link below to view the recordng and download the presentation  on the right hand side.