As a result of the Covid pandemic, there were extensive project delays in 2020 and 2021, and sizeable associated additional costs. However, these have not created a significant uplift in PI claims or notifications.

Delay disputes have increased, although not necessarily through the courts, and negligence claims as a result of inadequate supervision and remote inspections saw a modest uptick in the first half of 2022. It is likely that these types of claims will continue through the second half of 2022 as errors materialise, with issues around defective cladding, insulation and fire safety also persisting.

Looking ahead, the war in Ukraine is likely to have consequences, although unquantified at present. New legislation, and the review and regulation of the construction industry generally, are likely to create added claims pressure, as will:

  • Raw materials shortages
  • Economic pressures - increasing costs and insolvencies
  • Supply chain difficulties and labour shortages
  • Increased project delays
  • Building Safety Act: increased obligations on duty holders and increased regulation
  • Ambitious climate change targets
  • Cyber security
  • Contractual disputes - considering alternative / project delays

The current operating environment means that key decisions are more closely scrutinised, therefore, the importance of clear appointment terms has never been greater. As has the need for early engagement with your broker at the first sign of any possible dispute in order to mitigate a situation and provide timely notification to insurers.