At Jak’s Chelsea we heard from Antoni Kaminski from Bridge Insurance on …
Introduction to Bridge Insurance
Antoni Kaminski works for a general insurance broker that specialises in property and construction, particularly property development. The company manages two billion in construction projects and insures over 150,000 residential units. They spend nearly 100 million in premiums each year and have over 300 real estate and construction clients. As an insurance professional, he enjoys delving into technical details and policy wordings.
Leaving insurance late
Antoni emphasises that time is a valuable resource, especially for busy business owners and developers, and a key theme is the problems and pitfalls associated with delaying insurance decisions. He presents a list of various types of insurance that developers and contractors often encounter, some of which are commonly known and others less so. These include legal indemnities, and various liabilities such as employers, public, property owners, land, environmental impairment, and non-negligent liabilities. He stresses the importance of consulting with experts to determine which of these insurances are necessary.
Catching Problems Early
Antoni explains that geographical issues, such as being in a flood zone, can be identified early because systems used by the insurer’s team and insurance underwriters can flag these problems when quoting new projects. These systems use mapping to identify risks like flood zones or high burglary areas. Catching these issues early can prevent deals from falling through or allow a developer to decide against a project with too many risks.
Choosing the right Building Warranty
Antoni emphasises that a good building warranty provider can offer more flexible exit options, enabling a quicker sale. This flexibility is particularly important in changing markets, allowing a developer to choose between renting or selling a property. Having this in mind early in the process helps to build in the necessary flexibility.
Don’t assume the contractors insurance covers you
Developers sometimes rely on a contractor’s insurance, but this may not always be sufficient or appropriate. Contractor’s insurance primarily covers the contractor, meaning they control the claims process and receive payments. If a disagreement arises or the contractor leaves the site or goes out of business, their insurance coverage may also be lost. Additionally, making last-minute insurance decisions can prevent a thorough market review and proper evaluation of terms and conditions. Cheaper insurance options might be less expensive for a reason, and it’s up to the developer to assess if they are comfortable with the coverage offered.
Misrepresentation
Antoni discusses “misrepresentation” and “non-disclosure” in insurance, which refers to providing incorrect information, whether deliberate or accidental. An example of deliberate misrepresentation is providing false information, such as undervaluing a car’s worth or understating mileage for car insurance. If a claim is made and the insurer discovers false information was provided, they can “repudiate the claim,” meaning they will not pay it, or they may offer different terms.
Why you should keep records
Antoni highlights the importance of thorough documentation and record-keeping throughout a project. If an insurer misses inspection stages or a surveyor changes, good documentation can confirm that critical checks, such as those for damp proof courses or wall ties, were completed, even if the property is already built. This can help to expedite processes at the project’s conclusion. Additionally, in cases of claim disputes, particularly with professional indemnity (PI) insurance, a lack of documentation for agreed-upon changes or conversations can weaken a case. If an insurer cannot clearly demonstrate that conversations and changes were documented, they might decide to settle the claim, which negatively impacts the claims history.
Building Warranties
Delaying the placement of building warranties can lead to several problems, including higher premiums, missed works, and potential exclusions. It can also cause funding and work delays. If a project begins without insurance, there’s a gap in coverage, leaving the developer exposed to liabilities if something goes wrong. If a lender is involved, the absence of insurance can halt funding, preventing the project from starting.
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