Wednesday, September 23, 2009

Third of firms entering new sectors don't have adequate insurance

Over a third of all construction firms are working without sufficient insurance cover, after switching to new sectors in a bid to ride out the recession.

That's the warning to come out of research commissioned by insurance firm Quinn Insurance.

The research highlighted that of all the businesses that had diversified into new areas of business in order to survive, only three quarters knew if they will be covered by their existing insurance cover.

London (38%) and East Anglia (37%) have the greatest number of construction businesses claiming to have move into new business areas.

Meanwhile Northern Ireland (85%), the West Midlands (81%) and the North East (80%) are most at risk when working beyond their stated remit, as they have the highest number of businesses operating without knowing if the trade description on their policy covers new areas of business. 


Third of firms entering new sectors dont have adequate insurance


The survey also found that trades most frequently diversifying into other areas of business are scaffolding contractors (48%), roofing contractors (44%) and commercial builders (42%).   

Richard Stafford, Commercial Director of Quinn Insurance, said:

“The recession is forcing many in construction to seek extra streams of revenue wherever they can.  However, the number of businesses which start a job without ensuring that they are insured for this new trade is worrying, and even more concerning that so many businesses are not even aware of the risks involved of working outside of your stated trade description on insurance documents.

“We would advise any client to check their policy cover small print carefully before seeking to undertake a job outside of the business’ typical area of expertise.  Equally, concerned construction companies should seek assistance from their insurance broker if they are unsure.”

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