The collapse of contractor ISG and its six subsidiaries on 19 September 2024 is the latest of significant companies in the industry falling into administration. Once operating as one of the UK’s top ten main contractors, this insolvency will have far reaching effects particularly for subcontractors and smaller firms within the supply chain.
The fall of ISG highlights that the construction industry in the UK has still not seen the reforms required, nor learnt its lessons from the administration of Carillion; paired with the aftereffects of the Covid pandemic and the war in Ukraine the road to recovery appears slow and not without significant future challenges.
Stalled projects cause numerous challenges particularly when it comes to insurances, which will in most cases lapse when the contractor fails, thus leaving schemes uninsured until new coverage can be sought. The Griffiths & Armour Construction team can advise on how best to mitigate any insurance challenges that may arise from a delayed project. Likewise, if you have projects that have been impacted by ISG’s administration please do not hesitate to contact us.
Griffiths & Armour are well versed in placing and advising on Employer Controlled Insurance Programmes and Latent Defect polices, which help mitigate the problems associated with contractor administration, as the intent is to cover the interests of and provide protection to the Employer.
In the event of insolvency, the project insurances remain safeguarded throughout all stages of construction, regardless of the outcome of the contractor, thus protecting the Employer.
The benefits of the Employer Controlled approach are:
- From the outset, the full scope of cover is known and approved with the Employer, Funder and all interested parties.
- Loss settlements are controlled and, unless specifically authorised, will be paid to the Employer.
- The insolvency of contractors does not affect the insurance programme, as cover will be provided to all relevant parties – regardless of an insured entity becoming insolvent. The insurance programme remains intact during any project site down time.
- One policy can cover numerous different interests – Employer, Funder, contractor, sub-contractors.
The Construction team at Griffiths & Armour would be happy to chat through any queries that you may have regarding the arrangement of an Employer Controlled Insurance Programme and the associated benefits.
For further information or support, please get in touch.
