Congratulations to all winners at the 2022 ASUC Awards!
Defects Insurance Guarantee (Small) Winner – Anvil Foundations
Defects Insurance Guarantee (Medium) Highly Commended – Purkelly Brothers Ltd
Defects Insurance Guarantee (Medium) Winner – U&M Group
Defects Insurance Guarantee (Large) Winner – Falcon Structural Repairs Ltd
Basement Insurance Guarantee (Up to £300k) Winner – Basement Force
Basement Insurance Guarantee (Over £300k) Winner – Noble Structures
Project of the year (Less than 100K) Winner – Franki Foundations
Project of the year (£100k – £1M) Winner – MJ Rooney
Project of the year (In excess of £1M) Winner – Knowles Construction
Contractor Assessment Scheme Award – Highly Commended – KnightBuild
Contractor Assessment Scheme Award – Highly Commended – Toureen Group
Contractor Assessment Scheme Award – Winner – Abbey Pynford
Special Achievement Award – Abbey Pynford
The ASUC Awards 2022 was a fantastic event held at the beautiful Painters Hall in London. Members joined together after the Annual General Meeting in the gorgeous Court room for a prosecco reception and then headed to the Livery Hall for a Beautiful three course Lunch.
Members where then greeted by our guest Speaker, Comedian Jo Caulfield who shared her hilarious thoughts on member’s websites and her view on underpinning and the industry.
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“COVID-19 and more recently the war in Ukraine has put the supply chain under real pressure. Most of our members’ work is in the ground and prices for reinforcement and concrete, as well as labour to an extent, are difficult to fix for anything other than a very short period of time due to the current inflationary pressures. Collaborative working with our clients on these issues is essential, otherwise we will see good businesses fail as a result of influences completely outside of their control.”
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UKRAINE and other RISING COST PRESSURES:
A Conversation with……..
In a recent conversation between Mark Richardson ( CLEARmpw ) our Associate member, Executive board member and ASUC’s insurance broker and Rob Withers ( ASUC Executive Director ) a discussion took place regarding upwards pressure on contract values as a result of material, labour and other shortages, many of which are exacerbated by the Russian Invasion of Ukraine and consequent Sanctions imposed on Russia.
The question of increased values of contracts by reason of fluctuations arose as many members are adopting both short acceptance periods for their contracts or insisting on a contract that allows for fluctuations in labour, plant and material costs. Either just material costs or all three. The question of Contractor’s All Risks policies arose whereby many policies have an escalation clause whereby the contract value is automatically increased by up to 125% of the contract sum. The question to Mark was – is this sufficient in the current market with increases of 135% being nearer the norm for some contracts?
Mark’s response to Rob was as follows :
“ So put simplistically, if a £5,000,000 contract at inception was over a 12-month period, it would automatically be increased by a further 25% to £6,250,000 a year later – these clauses being deliberately structured to allow for Contract Price fluctuations, Variation Orders and general increases during the contract.
Furthermore, many insurers will in addition to the above have an ‘Inflation Clause’ – these can vary in content somewhat, but it would be fair to say that generally, they intend to allow for the reasonable effects of inflation during the policy term.
However, given the current inflationary climate, it is worth noting that, unlike a Property or Buildings policy, Contract Works policies do not generally have an ‘Average Clause’ which can often lead to underinsurance, but if it is deemed that the Contract Limit (and we must not forget to allow for Plant Values which some underwriters include within the Contract Limit) is/was inadequate at the outset, then insurers will address any claim as if ‘average’ were to have applied.
I would simply recommend that members allow for a more than adequate Contract Limit at the outset (note – not all insurers actually charge for an increased Contract Limit) and to regularly review this throughout the year – so not just at renewal and if they are successful in winning a larger than usual project, or one that has the content of a high material, then I recommend this is carefully reviewed individually and the Contract Limit set at a suitable limit. “
The conversation moved on to Red Diesel which will become illegal to use, despite industry protests, from the 1st April 2022. . No it’s not an April fool!
Mark commented :
“With the likely loss of the duty on red diesel for construction plant as of 1st April, the knock-on effect of this with already inflated fuel costs is bound to be an increase in the theft of fuel from site, fuel bowsers, plant and vehicles – so we’re warning clients to take every reasonable measure to make fuel more secure, vehicles either left empty at night or stored and parked securely, wherever possible
As fuel is often described as ‘consumables’ under a Plant All Risks, Property or Works policy, it is also worth ensuring that due allowance is made for the sharply rising cost of this as well, when reviewing the adequacy of policy limits.”
It is testing times for construction and our specialist sector is certainly affected no one wishes their business to fail as a result of lack of information. The upwards pressure on materials prices in particular as western sanctions against Russia bite is unprecedented and standard fixed-price contracts with a long acceptance period are a thing of the past in ASUC’s opinion.
Clearly, each member is responsible for their own commercial decisions but we would not recommend fixed price contracts for any other than very short duration projects and those would benefit from a very short acceptance period . Further members should check their CAR policies with their brokers and be comfortable that their insured limits and any warranties around security on site are suitable for their needs.
Clearly, each member is responsible for their own commercial decisions but we would not recommend fixed price contracts for any other than very short duration projects and those would benefit from a very short acceptance period . Further members should check their CAR policies with their brokers and be comfortable that their insured limits and any warranties around security on site are suitable for their needs.
Mark (and colleagues) contacts details are ;
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