Why constructors need to be protected by a broker

Consequences of Inflation on Construction Businesses

Inflation and the cost of living crisis has had a number of trickle-down consequences for the insurance landscape. At Romero Insurance Brokers, we’ve reported on how inflation has greatly increased the risk of underinsurance for big businesses and SMEs. Yet, inflation and the cost increase of materials has also affected the day-to-day workflow of construction workers and private contractors. Tradesmen must now be alive to price changes as they factor in the cost of materials into their quotations.

Indeed, many of us will not possess an abundance of spare funds post-pandemic. It’s caused work to dry up for tradespeople; a stark contrast to the home-improvement surge witnessed during lockdown one. And despite the genuine need, many contractors are claiming against the materials and equipment that are not being used.

Materials and tools are becoming scarcer and more expensive, putting them at a higher risk of theft. According to Direct Line Group, nearly half of all tradespeople have had their tools stolen, with the majority stolen overnight.

The spike in claims for tool theft has meant the value of claims has risen, resulting in increased scrutiny from insurers. Despite the spike, only a quarter of tradespeople have a specific insurance policy which protects their tools kept in their vehicle overnight. This means getting good insurance, without the assistance of a broker, will be much more difficult and more expensive.