By the end of 2022 rebuilding cost inflation will be over 9.6%. Construction material costs reached the highest levels in November 2021. Materials index and labour costs will also rise.
These increases are also because of Brexit and Covid19. These, in turn, led to supply chain disruption and labour shortages.
Furthermore, the rising demand for building materials together with the war in Ukraine and rising energy costs continue to drive inflationary pressure.
Impact on construction business insurance?
Buildings Insurance policies are often based on declared sums insured. These reflect the rebuilding cost of a property in the event of a total loss. Given the inflation situation, it is essential that rebuilding values are reviewed. They must ensure they remain adequate to avoid the potential risk of underinsurance.
With supply chain and material shortages interruption to a business following a substantial claim can last substantially longer than before. Obtaining planning permission and the lead times on materials could mean it takes a considerable amount of time to have your property reconstructed following a significant damage claim.
Similar to material shortages and delays, this development has resulted in a significant operational change that has altered the risk profile of those in the industry. Failing to disclose such changes or insurance policies that have not kept speed or have been subject to the introduction of inappropriate new exclusions, may cause insurance to fail to respond in the event of a claim.
How to proceed?
As these rapid market changes and uncertainties may be overwhelming, our team is here you answer any questions you may have and help you with your insurance policy.
On the other hand, the value of a policyholder’s insured asset itself may have risen as a consequence of inflation, meaning current coverage limits may in fact, no longer meet your requirements.
Get insured today
Usually, the perception about insurance, or any other finance-related service, is that it is complicated. There are too many technical words to understand and the terms and conditions are difficult to follow. That is one of the many reasons our team is here for you.
The G.A.P Vassilopoulos Group Group acts as Brokers through their well-established relationships with international ‘A’ Rated insurers’ as well as the local Cyprus market can cater for a wide range of insurance products.
Drop us an email through our website or feel free to contact us at 77 77 77 75 to compare and select the most appropriate insurance policy with our specialized G.A.P. Insurance Agency team will respond promptly to your needs.