What are the main uncertainties facing the construction industry?

As the economy begins to slowly normalize, the number of construction projects in Canada is beginning to pick up – but this surge in construction activity also comes with emerging uncertainties and challenges that contractors must address.

Some of these uncertainties that construction businesses must tackle include:

• Changes in the economy: The spike in gas prices has had a knock-on effect on daily life, from commuting to grocery shopping. The same could be said of the construction industry, which has seen a surge in the cost of building materials such as lumber. Construction businesses should expect their costs to surpass their budgets.
• Natural disasters and calamities: Recent storms have led to insurers restricting capacity and raising their deductibles, dashing hopes of relaxing the current hard market.
• Geographic developments and other variables: As more land is developed, both brokers and insureds must keep in mind when rating a potential property, a plot’s fire protection factor is crucial. The further away a plot is from the major cities, the less likely it is to be protected.

Outlining the above risks, managing general agent CHES Special Risk highlighted how it can help construction businesses weather these challenges and more.

“Construction projects vary from big to small, an extension to an existing home to a multi-millionaire dollar course of construction,” said CHES Special Risk senior underwriter Joyce Rajadurai. “We at CHES Special Risk like to consider us a one-stop shop for both.”

Rajadurai noted that when reviewing a large course of construction projects, it is best for construction groups and their brokers to analyze the exposure by phase. This way, the overall exposure is reduced, and the individual phases can be presented as more appealing to insurance markets.

“As a 5 Star Construction Insurance provider and expert in underwriting Construction, CHES Special Risk aim to provide solutions to insurance offerings, especially in a time where added effort goes a long way,” the senior underwriter added. “We have substantial in-house capacity for both none combustible and frame and are always available to discuss the risk on your desk!”