The government’s latest planning announcement points to a faster pipeline for major developments, but the construction insurance market is moving in the opposite direction.
Around 24 August 2026, the government announced that mayors across 13 combined authority areas in England will receive new powers to call in and override local councils on major planning decisions. The aim is to help deliver 1.5 million new homes by the end of the decade and unblock developments that have stalled at local level.
For contractors and developers in Essex, Kent and London, this matters even when a project is not directly inside one of the newly affected combined authorities. London’s mayor already has similar powers, and Essex and Kent provide a significant amount of the construction capacity, subcontracting expertise and professional support behind the capital’s development pipeline.
The opportunity is clear: more approvals, larger schemes and potentially more work. The insurance question is less straightforward. A faster planning process does not automatically create more skilled labour, better inspections or stronger quality control. If construction volume rises while those underlying pressures remain, insurers may respond with tighter terms, larger deductibles and greater selectivity.
What the new mayoral powers change
The new call-in powers are intended to apply to major developments, including:
- Developments of more than 150 homes
- Commercial schemes exceeding 15,000 square metres
- Buildings taller than 30 metres
Areas named in the announcement include Greater Manchester, Liverpool City Region, the West Midlands and the West of England. London is being used as an existing example of how mayoral planning powers can help unblock strategic sites, with housing minister Matthew Pennycook pointing to the capital’s current system.
The policy is not without controversy. The Conservatives, Liberal Democrats and Greens have argued that transferring more decision-making from local councils to mayors could reduce local democratic accountability. Other political leaders have welcomed the change, particularly where they believe stalled schemes can now be approved more quickly.
For the construction industry, however, the immediate issue is not simply who grants permission. It is what happens when more large and technically complex projects enter the market at the same time.
The insurance market is already cautious
Several insurers have already stopped writing certain construction risks, while others have increased deductibles to levels as high as £150,000. The reasons include rising defective workmanship claims, tight project margins and increasingly aggressive contractor behaviour in a competitive market.
This is a concern for businesses arranging Construction Contractor Insurance because the availability of cover is only one part of the issue. The policy may still be available, but the deductible could be much higher, exclusions may be broader and insurers may require more information before offering terms.
For example, a Contractors All Risks policy may contain specialist defect provisions with a substantial deductible. A recent dispute involving the application of a £150,000 deductible demonstrated how a number of defects and resulting losses may, depending on the wording and the facts, be treated as one event. That can leave a contractor or developer carrying a significant first share of the loss.
The practical point is simple: do not look only at the premium. Review the deductible, the definition of an event, the defects exclusion and the amount that your business could realistically fund following a serious claim.
More planning speed does not remove construction risk
Approving a project more quickly does not shorten the construction process. It does not remove the need for properly qualified trades, competent supervision, tested materials, accurate records or independent inspection.
In fact, accelerated delivery can create pressure at every stage:
- Contractors may take on projects outside their usual capacity.
- Subcontractors may be appointed quickly because programmes are compressed.
- Materials may be substituted to control costs or avoid delays.
- Inspection and sign-off processes may become less consistent.
- Design changes may not be recorded clearly enough.
- Businesses may accept contractual responsibilities that their insurance does not fully support.
These are familiar problems, but they become more serious when the number of major schemes increases. A defect may not become visible until years after practical completion, by which point the original contractor may have changed ownership, ceased trading or moved into a different area of work.
That is why the insurance market is particularly sensitive to structural warranty and latent defects exposure. The claim may arrive long after the original underwriting decision.
The 15-year liability tail
The Building Safety Act 2022 extended the limitation period for future claims under the Defective Premises Act from six years to 15 years from practical completion. This change took effect on 28 June 2022.
The Act also requires developers to provide a new-build home warranty of at least 15 years, compared with the older 10-year Buildmark NHBC norm that many businesses have historically used as a reference point.
For developers and contractors, the consequence is that older 10-year assumptions may no longer be sufficient. Structural warranty and latent defects cover should be checked carefully to confirm that the period of protection matches the legal and contractual exposure.
The issue is not just the headline duration. Businesses should also consider:
- When cover starts and ends
- Whether the policy responds to defects discovered late in the period
- The scope of structural damage covered
- Any exclusions for design, workmanship, materials or compliance
- The role of third-party inspectors
- Whether cover can be transferred to future owners or funders
- What evidence must be retained to support a claim
The dispute involving AmTrust Europe and MD Insurance Services is a useful reminder that third-party inspection quality can be central to latent defects underwriting. Where serious structural problems emerge years later, questions may arise about what was inspected, how it was recorded and whether the original risk was assessed properly.
A warranty is not a substitute for good construction management. Equally, good construction management does not remove the need to understand the warranty wording.
Professional indemnity and planning challenges
The planning changes may also increase pressure on professional indemnity insurance.
Where a mayor calls in a scheme and overrides a local planning decision, affected parties may challenge the process through judicial review or other legal routes. Not every challenge will succeed, but a more centralised and contested planning environment could create additional work and potential allegations against architects, planning consultants, surveyors and other professionals.
Professional indemnity policies should therefore be reviewed for:
- The description of professional services
- Planning and development consultancy activities
- Limits of indemnity and aggregate limits
- Retroactive dates
- Contractual liability exclusions
- Legal costs and defence arrangements
- Any exclusions relating to planning, building control or regulatory decisions
Local authorities and planning officers also need to understand the scope of their own arrangements. The more responsibility that sits around strategic decisions, the more important it becomes to document the advice, information and process behind those decisions.
What this means for Essex, Kent and London contractors
For a contractor arranging General Contractor Liability Insurance, the basic foundation remains public liability and employers’ liability where staff are employed. But major development work often requires a wider programme, including:
- Contractors All Risks or contract works cover
- Owned and hired-in plant insurance
- Tools and equipment cover
- Professional indemnity where design or advice is provided
- Environmental or pollution liability for relevant trades
- Contractual legal expenses
- Directors’ and officers’ liability where appropriate
- Business interruption and delay-related protection
The exact combination depends on the work, the contract and the role your business is taking. A contractor acting as a principal contractor may carry different responsibilities from a specialist subcontractor, even when both are working on the same site.
Businesses searching for Business Insurance Essex or Business Insurance London should avoid treating construction insurance as a standard package that can be renewed without discussion. A change in turnover, project size, building height, subcontracting arrangements or contract wording can materially change the risk.
Practical steps before accepting more work
Before entering an accelerated project pipeline, contractors and developers should:
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Check the warranty period. Confirm that structural warranty and latent defects cover reflects the 15-year requirement and liability window.
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Review defect exclusions. Understand whether the policy covers damage caused by defective work, or only the resulting damage, and identify any improvement or rectification exclusions.
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Calculate the deductible. Ask how a deductible applies to one event, multiple locations, design defects or repeated workmanship issues.
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Review PI wording. Architects, consultants and contractors providing design input should check that their professional services and planning responsibilities are accurately described.
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Improve project records. Keep inspection reports, photographs, material certificates, design changes, subcontractor checks and completion documents in an organised format.
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Check contractual insurance requirements. A contract may require limits or extensions that are not included in the existing policy.
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Plan for the long tail. Keep insurance records and project evidence beyond completion, particularly where statutory or contractual claims may arise many years later.
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Use specialist advice. Work with a broker who can approach the relevant construction markets and explain the difference between available cover, restricted cover and cover that looks suitable but leaves a significant gap.
Moyak Insurance Services works with businesses across Essex, Kent and London to review commercial insurance arrangements around the needs of the individual business. You can contact Moyak Insurance Services for a discussion about your contractor insurance requirements, or visit our useful information and resources.
The next stage is not simply faster building
The government wants more homes and faster approvals. That may create valuable opportunities for contractors, developers and construction professionals in the South East, particularly if similar powers extend further across the region.
But insurance markets are responding to the quality and claims experience they are seeing today. More projects will not automatically mean more capacity. If speed is prioritised without investment in skills, supervision, inspection and documentation, the resulting claims will eventually appear in public liability, professional indemnity, structural warranty and latent defects portfolios.
My view is that contractors should welcome the potential pipeline but approach it with discipline. Before accepting a larger or faster-moving project, make sure your Construction Contractor Insurance reflects the work you will actually undertake, your General Contractor Liability Insurance limits are adequate, and your long-term defect exposure has been properly considered.
The planning decision may be made quickly. The insurance consequences could remain for 15 years or more.
Frequently asked questions
Do the new mayoral powers apply to every construction project?
No. The announced thresholds focus on major developments, including schemes of more than 150 homes, commercial developments over 15,000 square metres and buildings taller than 30 metres. The precise operation of the powers will depend on the relevant authority and final arrangements.
Does faster planning mean construction insurance will become cheaper?
Not necessarily. Insurers are already responding to defective workmanship claims, tight margins and difficult construction risks by withdrawing from some areas, increasing deductibles and applying greater underwriting scrutiny. Increased project volume could place further pressure on capacity.
Is a 10-year structural warranty still enough?
Developers should not assume that a traditional 10-year term is sufficient. The Building Safety Act 2022 introduced a 15-year limitation period for future Defective Premises Act claims and requires a new-build home warranty of at least 15 years. The policy wording and contractual requirements should be checked for each project.
What does General Contractor Liability Insurance cover?
In the UK, this term commonly refers to public liability insurance for injury to third parties or damage to third-party property caused by the contractor’s work. It is usually considered alongside employers’ liability, Contractors All Risks, plant cover and, where relevant, professional indemnity insurance.
Should Essex and Kent contractors review their insurance now?
Yes. Contractors in Essex and Kent are closely connected to London’s development market, and new regional planning powers could increase demand for construction capacity over time. Reviewing policy limits, exclusions, deductibles, project descriptions and warranty arrangements before taking on new work can help prevent avoidable gaps.