Getting the right cover requires a strong proposal form. Construction insurers are increasingly scrutinising insureds, due in large part to a rise of fire-safety and cladding-related claims, and a series of high-profile insolvencies. With rates softening, underwriters are also inundated with submissions – so poorly completed forms will be overlooked.
Below, we set out what a good proposal form looks like, and some tips for getting it right.
What makes a ‘good’ proposal form?
In short, a good submission will contain all the information a broker needs to speak to underwriters on your behalf – there’s no need for any additional questions. Getting this right from the outset gives brokers more time to speak with all the necessary underwriters. Information is required at least four weeks before renewal, but the earlier the better. If the terms are unfavourable, any less time means minimal opportunity to acquire any terms from alternative options.
A sufficient proposal form will have accurate, detailed information, including all necessary figures such as turnover rates, claims information, project details, and activity split, for example. A good proposal should also include an understanding of what the business does and its future plans, as well as a progress check.
Why it’s key to get your proposal form right
Completing your proposal form correctly and on time will help you to get the right cover to meet your needs. By making sure all the information is correct, you will ensure that there are no gaps in your coverage. A prompt, accurate proposal form also demonstrates competent risk management.
Alternatively, a poorly completed proposal form will go to the bottom of the pile as underwriters are bombarded with submissions. It can also lead to incorrect cover for businesses, leaving them vulnerable in the event of a claim. Insurers receiving a poor proposal may decline any renewal offer, or even withdraw their terms mid-cover if the work declared does not accurately reflect the business – for instance, claims coming in for undeclared, high-risk activities.
Above all else, it’s important to remember that a proposal form is supposed to paint a business in a positive light for insurers, securing the necessary cover to move forward. If an insurer feels they have all of the necessary information on time, it highlights why they should write a risk and why they should offer the best terms with the widest cover possible.
Recommendations for a good proposal form
In a time of added scrutiny within the construction industry, it’s more important than ever to leave no stone un-turned when building a proposal form. Remember perhaps the two most crucial factors:
Allow time for negotiation – as touched on already, submitting a proposal ahead of the 4-week notice period means a broker can get the right cover, price, and alternative insurance options.
Include all necessary information – a sufficient proposal form should declare everything a business wishes to cover, including any supplementary information which may assist the proposal. Otherwise, the policy may not cover them. If a claim arises, the business may need to fund and defend the claim themselves.
Review the information before sending – while the proposal may seem to cover all basis, it’s important to review the document. This ensures nothing is missed and subsequently not covered.
Duty of fair presentation – all proposals should be presented fairly, containing all of the necessary information, with full disclosure following the 2015 Insurance act (opens a new window).
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