Every scaffolder needs insurance, but the market for this cover is limited and stakeholders report no signs of the softening impacting other lines. For underwriter David Jones (pictured right) that’s good news but he realises this can create challenges for brokers with clients in the scaffolding business.
“Premiums and deductibles remain adequate,” said Jones, managing director of Edge Underwriting. “Those with poor claims histories, or who can’t demonstrate excellent risk management, may continue to struggle to find support.”
Further evidence of the limited cover: the Perth-based underwriter says if you search for scaffolding on the Underwriting Agencies Council (UAC) website, his firm is the only market that shows up.
“For those working above 30 metres or at high hazard locations - such as oil and gas plants - the market is extremely limited,” said Jones.
From the perspective of brokers and their customers, he said, premiums can seem high. “That isn’t completely untrue,” Jones said. “But given the risk is also high, I would suggest they are around where they should be for long-term stability.”
He said brokers interested in finding cover for clients with a scaffolding firm need to have a good understanding of both the business and the needs of the underwriters.
The underwriting criteria used by Jones’s firm breaks up scaffolding work into four height levels, not the standard two levels used by other insurers. “We also focus more on how they go about their business, in other words their own risk management, as well as what they do,” he said.
Despite the high risks and limited market capacity, Jones said this risk management approach can reap good insurance results. “Where a broker gets this and can educate their client accordingly, they have enjoyed excellent results,” he said.
However, there are significant insurance challenges to deal with, for both underwriters and brokers. “Like a lot of blue collar industries, a lot of the workforce is contracted out, meaning the liability insurer often becomes the quasi workers’ comp insurer via w2w [worker to worker] recovery claims,” said Jones.
“There’s the obvious risks of working at height, both in terms of people falling or items being dropped,” said Jones. “Take-up of best practice safety measures, such as safety nets, CCTV, and IoT sensors or software is notoriously low.”
Another issue can arise, he said, when one scaffolding company erects the structure to code but another firm makes alterations, leading to an injury.
The limited number of markets offering cover for scaffolding is an opportunity for underwriting firms. Jones said before launching his cover last year he saw gaps in the market. “We saw opportuneness around a limited number of markets providing this cover, especially when working in excess of 30 metres,” said Jones.
His firm’s division of work into four height levels rather than two, he said, is “a more sophisticated pricing approach.” The two heights division used by other insurers only divides work into under and over 10 metres.
Jones’s firm also combines a standard public liability policy with incidental professional indemnity (PI) and contractual liability extensions.
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