Public Sector Construction Facility

Construction insurance for governments

We specialise in owner-controlled solutions, with the Public Sector Construction Facility (PSCF providing cover for physical loss and liability protection of local government construction projects).

Cover can be arranged for many project types – including building works, park and recreational facilities, swimming pools, civil projects such as sewage and water treatment plants, bridge construction, road and footpath construction and flood remediation works.

The PSCF streamlines administration and management, with essential contract information entered online, and a quote or a referral produced within minutes. Once a quote is finalised and accepted by a council, the cover can bound by JLT. Policy documentation and certificates of currency are produced on the same day cover is bound. 

Key benefits of an owner-controlled insurance solution include:

• Insurance solution for specific projects and the duration of the works
• Optimising levels of cover
• Compliance with funding deeds and finance arrangements
• Elimination of on-costs usually incurred within traditional contractor controlled insurance arrangements
• Controlling cover and ownership of the policy
• Coverage certainty if a contractor becomes insolvent
• Reduced administration and improved due diligence on tender evaluations
• Potential for project cost savings
• Control of claims payments, ensuring money is directed to reinstating damaged works

How does the PSCF benefit councils?

Control of coverage

Council knows best what its risks are and how it wishes to manage them. Points of concern for Council may not rank so highly on a contractor's list of priorities, who may arrange cover simply to provide for their own contractual or technical risks. The programme must aim to take account of all parties' needs, but procurement of the insurances by Council allows the cover to be tailored to ensure the Council’s specific aims are satisfied.

Control of claims

The primary function of any insurance policy is the payment of claims, yet any claim has the potential for complexity. From first notification and loss adjuster site visits, through to production of supporting information, negotiation and eventual settlement of the claim, the Council will be keen to see that the process runs smoothly and promptly. Having a direct relationship with insurers and loss adjusters, established during the procurement process, can prove critical to successful conclusion of difficult claims.

Control of deductibles

Almost all insurance policies will require the insured parties to bear a deductible, the purpose of which includes incentivising the Project participants to manage risk and avoid losses. The Council-led procurement of insurances permits the ability to select a deductible level suitable for Council, balancing the need to incentivise contractors without being overly punitive.

Compliance with lending requirements

Financiers may seek certain securities over the insurance programme effected over a project. It is highly likely, in such a circumstance, that financiers will insist that the insurances are controlled by the Council, so that financiers can step-in to the rights of the Council in the event of default under the lending agreements.

Avoidance of cross-claims and disputes

A common panel of insurers across the project removes the potential for claims between parties and their respective insurers, as each seeks to protect its own interests.

Optimum levels of cover

The ability to arrange advance loss of profits insurance to cover lost rent or fixed costs including debt servicing and the potential tenant's alternative accommodation during the rebuild period following delay as a result of damage to the works.

Elimination of on-costs

With direct control of the procurement process, the Council can ensure that no additional 'handling costs' are passed on to the Project. Furthermore, even if the insurances were to be placed by others, the Project Team would still need to expend considerable time ensuring that the insurances had been effected to their satisfaction – effectively duplicating work.

Protection from Contractor default

In the event of a Contractor being unable to fulfil their contractual obligations due to breach of conditions, contractual disputes leading to termination or a contractor insolvency, Council retains ownership of the policy and remains protected whilst they re-bid the project and replace the contractor. This greatly reduces the risk exposure to council from a contractor default and avoids difficulties associated with a new contractor insuring the partially completed works.

Access the PSCF

By accessing the PSCF for your PCIP insurance quotes and completing the straightforward form, you can secure coverage for your project in just four easy steps.

Our methodology is to drive out unnecessary costs through drafting appropriate "Instructions to Tenderers" documents to ensure that contractors have clarity on insurance responsibility when they tender.

Key relationships with leading market insurers allows us to access competitive premiums whilst still obtaining robust coverage for Councils.

If the worst was to happen, our claims team will offer a seamless claims management system, including the co-ordination of insurers and loss adjusters, as well as access to a specialist team in the event of a major complex loss.