Diversifying into project co-ordination or project management can be a fantastic way to boost your sourcing businesses’ income and offer a more comprehensive service to clients.
However, as these activities come with increased responsibilities, they also pose a heightened risk from an insurer’s perspective. It’s crucial to ensure you’re adequately covered – otherwise, you may find yourself exposed to potential claims that could jeopardise not only your finances but also your business.
Our expert insurance partner, Insurance-Desk have provided this helpful guide for any property sourcers or deal packagers looking to understand project management insurance.
The Importance of Declaring All Activities to Your Insurer
There is a wide range of strategies in the property sector, which helps to generate business from multiple revenue streams. Whilst a business can freely diversify, it’s crucial to declare all activities to your insurer.
This month at Insurance-Desk we are focusing on Project Co-ordination and Project Management for Property Sourcing agents. These activities can be excellent tools for increasing income and providing a more extensive service to your clients. However, they also increase the risk from an insurer’s perspective, making it vital to ensure all activities are properly covered.
Your Professional Indemnity coverage is protecting against errors & omission during the professional services you have declared. If you do not declare all your activities, you may find yourself uninsured for certain activities.
Worse, these activities might not be acceptable for the current insurer meaning your other trades declared will also not be covered as the insurer wouldn’t underwrite that risk from inception.
The Increased Risk of Project Management for Property Sourcing Agents
As a project co-ordinator or project manager, your responsibilities increase, and claims frequency tends to be higher in the construction sector. The rise in risk does lead to higher premiums, and some insurers may not cover these activities, leaving you potentially uninsured.
Speak to the Insurance Desk team today to arrange your Project Management or Project Co-ordination insurance complete the form here 👉 https://www.napsa.org.uk/insurance-desk/
Understanding Policy Limits – Any One Claim vs. Aggregate Cover
When adding Project Management Insurance to your policy, it’s vital to check the coverage terms. Specifically, insurers can provide cover on an Any One Claim or an Aggregate basis.
What’s the Difference?
Any One Claim
This provides the full indemnity limit for each and every claim within the policy term. For example, if your policy limit is £500,000, you’ll have access to £500,000 for every single claim during the term.
Aggregate
This reduces the indemnity limit by the value of any claims paid during the policy term. If you have £500,000 aggregate cover and one claim pays out £200,000, only £300,000 remains for additional claims that year.
Tip: If your insurer provides aggregate coverage, consider opting for a higher limit to protect against the risk of insufficient cover after a claimable event.
Key Responsibilities in Construction Projects
Managing a construction project can be complex and may add responsibilities you are unaware of. It’s vital to clarify who is responsible for site safety, and other risks on a construction site, including:
CDM (Construction Design and Management):
Ensuring compliance with CDM regulations regarding health, safety, and welfare on construction sites.
Site Safety:
Maintaining a safe environment on-site to reduce the risk of accidents.
Role Allocation:
Identifying which parties are responsible for various elements of the project, such as a contractors, clients, and subcontractors.
Keeping the site safe is critical, but it’s equally important to clarify the responsibilities of all parties involved. By understanding these responsibilities, you can better assess the risks involved and ensure your policy adequately covers them.
Directors’ Liability Insurance – Do You Need It?
If you’re managing projects or running a property sourcing business, consider adding Directors Liability Insurance. This type of insurance protects directors personally against legal actions arising from wrongdoing during their duties as a director.
Why is this important?
Small, Medium Enterprises are just as vulnerable as large companies and with a heightening risk in the construction sector, the risk of wrongdoing increases.
Directors’ personal assets are at risk. If a director has been accused of breaching their duties, they are liable to defend the claim. This means their personal assets are potentially at risk if they do not have adequate cover.
Defending legal action can be costly. Legal costs for defending allegations against the company can run into tens of thousands of pounds. It can also take valuable time away from running your business.
Protection in case of bankruptcy or insolvency. When faced with bankruptcy or insolvency, creditors may pursue legal action against directors. Particularly where company directors have not acted in their best interests.
Emerging threats from Regulatory Investigations and Data Protection breaches. Failure to protect client information could lead to an investigation by regulatory authorities and claims from impacted third parties. In recent high profile cases regulators have handed out significant, business altering, fines.
Chat to Insurance-Desk for Peace of Mind
We understand that the complexities of Project Management Insurance can seem daunting at first, however they don’t have to be. Insurance-Desk have over 15 years of experience working with property sourcing professionals, they provide tailored solutions that ensure you and your business is protected.
Specialised Expertise: they uniquely understand the property sourcing industry and the risks involved
Comprehensive Coverage Options: From Professional Indemnity to Directors’ liability, they help you secure the right cover for your business
Professional Partnership with NAPSA: We are proud to share Insurance Desk’s experience and knowledge of the sourcing sector to our members and the wider property sourcing community. Many of our agents have chosen Insurance-Desk to purchase their insurance policies through and continue to do so each year.
If you are a NAPSA Member, don’t forget you can get up to 20% off your insurance policies. Please make sure you’re logged in and complete the form here.
Not a Member? No problem you can get in touch with Insurance-Desk by completing the short form below. The team will be in touch with you very quickly to confirm next steps and provide guidance on any questions you may have.
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Speak to the Insurance Desk team today to arrange your Project Management or Project Co-ordination insurance complete the form here👇
