It’s been well documented that the construction industry is synonymous with feast and famine and the current hunger for materials at a workable cost highlights where we are in this cycle.

For businesses that work strictly on private works, a rise in quotations to match these parameters may be met with disdain from the customer, but in a world governed by the schedule of rates, the solution is not quite that simple.

This is a headache felt up and down the supply chain. When material costs rise, the premiums on policies do not. Everyone is squeezed tighter and the party left to source the materials to facilitate the repair are reduced to filling unproductive hours calling around merchants to see if there is any stock available, let alone at the right price.

Recently a well-known building merchant announced that they would be limiting each trade account to 5 bags of concrete per day. This is possibly workable for a smaller job, but when you have contracts with multiple insurance providers to satisfy it becomes near impossible.

There’s no doubt that the trifecta of the pandemic, Brexit and the government’s full steam ahead approach to completing HS2 have played their part. Coronavirus has had adverse effects in every part of the chain, from manufacturing to logistics. Worker absence has hit some of the major manufacturing companies hard and most are still catching up on the sheer backlog from when production ceased completely at the start of the pandemic. Brexit has added cost to materials as commodity code changes and import charges have driven pricing up, passed on of course to the end user. With available materials offered on a first refusal basis to the companies constructing phase 1 of the high-speed rail link to satisfy government contracts, its left as a free-for-all to fight out what’s left and at what price.

Supply and demand has long dictated the flow of the construction world and when reinstatement work is a crucial part of the insurance claims cycle, building repair networks, insurance providers and contractors feel the full wrath of the consequences. In a pre-pandemic world, risk aversion may have been possible due to Brexit forecasting and the foresight to properly prepare for potential shortages but the uncertainty of the world we’re now working in means that covid has pushed all other issues away. How businesses factored Brexit into their contingencies is quite frankly irrelevant and whilst we knew there would be issues pertaining to the UK decision to leave the European Union, nothing could have prepared us for what the construction industry has seen over the last 18 months.

Up and down the chain, we’ve all got to give a little more. Time that was once focused on proper planning and the drive to exceed SLAs is now being compromised by the frantic search for competitively priced materials to ensure that what we’re doing is sustainable and profitable. If the reactive part of the industry cannot survive with financial buoyancy other parties in the chain with invariably take the hit. No trades teams equates to no works completed and no works completed means breach of policy.

The insurance sphere needs to come together on this issue to find a reasonable resolution that keeps the wheels of insurance spinning and ensures the longevity of supplier and contractor relationships through these trying times.