Construction risk insurance audit: the right move for investment funds

A tense market: increased demands for investors

The construction insurance market is experiencing a structural hardening marked by several trends:

• Subscriptions much more demanding: insurers favor technically controlled risks. Any documentary weakness in subscription files becomes detrimental, even prohibitive.
• The increasing impact of climate risks: the frequency and severity of natural disasters degrade technical balances and reduce available capacities.
• A targeted increase in premiums and difficult negotiations on certain guarantees: more frequent exclusions and increased deductibles, insurers are tightening their stance both in terms of wording and claims management.
• A slowdown in new construction: we are seeing a decrease in volumes in Construction All Risks and the development of more selective framework agreements.
• A structuring jurisprudence: companies' liability is strengthened, especially on equipment and the choice of construction techniques used, accepted, or contested. The specific liability of builders is reinforced, even in the face of questionable choices by the owner.

Direct consequence: traditional guarantees are no longer sufficient

Simply holding a Decennial Classic Guarantee or a Damage-Works Framework Agreement or All Risks Site is not necessarily sufficient to best cover professional risk.

If the quality of the program put in place to ensure the overall activities is not sufficiently robust and well adapted, a significant latent liability can be generated, often invisible during the transaction.

For an investor, this means legal, financial, and sustainable reputational risk.