Category: Blog

The Building Safety Regulator’s Gateway 2 workload has jumped by more than 100 live cases in a single month, taking the total to 1,654 applications.

That is the immediate headline from the latest Building Safety Regulator figures reported by Construction Enquirer. The increase is being linked to the Building Safety Levy taking effect on 1 October 2026, with developers apparently bringing applications forward before the new charge applies.

For contractors, developers and design teams working on higher-risk buildings in Essex, Kent and London, this is a mixed picture.

The good news is that BSR performance is improving. The less comfortable point is that a fresh wave of applications is arriving just as the regulator is beginning to clear the old bottleneck. That could create a new pressure point for project programmes, finance, labour and insurance.

A backlog that is finally beginning to move

For much of the higher-risk building regime, Gateway 2 has been associated with uncertainty. Projects could be designed, tendered and financed, but still be unable to start because the necessary approval had not been received.

That created obvious problems for developers and lenders, but it also placed contractors in difficult positions. Start dates became provisional, procurement decisions had to be made before certainty existed, and contract terms sometimes attempted to transfer approval-related delay risk to the contractor.

The latest figures are more encouraging.

In the 12 weeks to the end of August, BSR made 340 decisions across all higher-risk building categories. Of these, 287 were approved, representing an approval rate of 84% and covering more than 18,000 homes.

New-build performance has improved particularly strongly. The approval rate has risen to 92%, while the median determination time has fallen to 22 weeks. A year earlier, the approval rate was reported at 39%, with a median determination time of 43 weeks.

That is a meaningful improvement. It does not make a 22-week approval period short, particularly for projects with land, finance and procurement costs running in the background, but it gives the industry a more realistic basis for planning.

BSR has also increased its resources. Its internal regulatory team has grown by 25 people in three months to 177, supported by 508 external technical specialists. Further recruitment is planned over the next six to 12 months. Acting chief executive Charlie Pugsley has attributed the improvement to the expanded technical workforce and closer collaboration with applicants.

In practical terms, better applications and better communication with BSR appear to be producing better results.

Why the 1 October levy is changing application timing

The increase in live applications does not appear to be happening by accident.

BSR believes the approaching Building Safety Levy may be encouraging developers to submit applications early. The levy is due to apply from 1 October 2026, and bringing a project into the system before that date may have important financial implications for developers, depending on the project and the applicable rules.

There were 34 new-build applications submitted during August, and BSR expects that number to rise further during September as the deadline approaches.

This front-loading matters because a Gateway 2 application is not the same as an approved project ready to start. Applications still need to be reviewed, technical queries may need to be answered, and design teams may have to provide additional evidence before a decision is reached.

That means the industry could see:

• More projects entering the Gateway 2 pipeline in late 2026.
• A concentration of approvals and procurement activity during 2027.
• Increased competition for specialist labour, compliant materials and technical advisers.
• Greater pressure on contractors to hold prices and capacity for projects that cannot yet start.
• More difficult discussions around finance, bonds, advance orders and delay responsibility.

For businesses tendering in Essex, Kent and London, this is the point at which opportunity needs to be matched with discipline. A larger pipeline is welcome, but accepting too much work with uncertain approval dates can create a cash-flow and resource problem.

Refurbishment remains the quieter concern

The new-build figures are attracting most attention, but the refurbishment and internal works backlog deserves equal focus.

Over the latest 12-week period, BSR received 457 applications for internal works in higher-risk buildings, against just 143 decisions. The live caseload for that category has reached 1,082.

This will affect contractors involved in cladding remediation, compartmentation, fire-safety upgrades, structural changes and other work on occupied higher-risk buildings.

These projects are often more complicated than new-build work. Contractors may need to work around residents, existing services, incomplete records and restricted access. The programme can already be difficult before Gateway 2 approval, tenant communication and building management are added to the picture.

A refurbishment contractor should therefore be cautious about treating a proposed start date as firm simply because a contract has been signed. The programme should identify the approval stage clearly, explain what cannot proceed before approval, and allow for the possibility that technical queries will change the scope or sequence of works.

Golden-thread information is also important. Design decisions, product information, inspection records and changes made during the project need to be captured properly. This is not just a regulatory administration issue. Poor records can make it harder to demonstrate competence, defend a claim or establish what work was completed and when.

What contractors should review in their insurance and contracts

Gateway 2 delays sit at the intersection of regulation, construction contracts, finance and insurance. A standard annual policy may not automatically respond to every delay or change in project circumstances.

Contractors should review the following areas before committing to a higher-risk building project.

Contract works and delayed starts

Check when contract works cover begins, particularly where materials are purchased or stored before physical work starts. If equipment or materials are ordered in advance, confirm whether the policy provides suitable protection while they are in transit, stored off-site or held on-site pending approval.

Advance-purchase protection may be available in some circumstances, but it is not something to assume. The insurer should understand the proposed arrangement and the relevant values.

Delay, finance and LAD exposure

A Gateway 2 delay may affect funding drawdowns, completion dates, sectional completion and liquidated damages. Insurance does not usually replace a contractor’s contractual liability simply because a regulatory approval has taken longer than expected.

Tender reviews should therefore identify:

• Whether commencement is expressly conditional on Gateway 2 approval.
• Who carries the risk if approval is delayed.
• Whether the contractor can recover demonstrable prolongation costs.
• How liquidated damages are treated if the delay is outside the contractor’s control.
• What happens to bonds, warranties and guarantees during an extended pre-start period.

Our General Contractor Liability Insurance guidance explains why the liability limit and policy scope need to reflect the real work being undertaken, rather than simply relying on a historic figure.

Remediation and work on occupied buildings

For internal works and remediation, contractors should consider professional indemnity, public liability and employers’ liability arrangements alongside the contract itself.

Work on occupied buildings can increase the risk of:

• Damage to existing property.
• Interruption to residents or commercial occupants.
• Fire, water or security incidents during phased works.
• Allegations that design, inspection or installation work was inadequate.
• Disputes over pre-existing defects and responsibility for the building’s condition.

Policy wording matters, particularly where the contractor is providing design input, selecting products or certifying parts of the work. Notification requirements should also be understood before a potential defect develops into a claim.

A practical checklist for the September rush

With the levy deadline approaching, contractors and development teams should consider taking the following steps now:

1. Submit complete applications. BSR has linked improved performance with stronger technical capacity and closer collaboration with applicants. Incomplete information can still create avoidable delay.

2. Prepare golden-thread records early. Do not leave product data, design changes and evidence of competence until the end of the process.

3. Use 22 weeks as a planning reference, not a guarantee. The reported median for new-build determinations is encouraging, but individual projects can take longer.

4. Clarify Gateway 2 responsibility in the contract. Confirm who submits the application, responds to queries and carries the consequences of delay.

5. Review bonds and LAD provisions. Approval-related delay should not be left to assumption.

6. Check insurance before tender acceptance. Construction Contractor Insurance and General Contractor Liability Insurance should reflect the actual scope, height, occupancy, design responsibility and building safety obligations.

7. Test supply-chain capacity. If approvals accelerate, several projects may reach procurement at the same time. Confirm lead times, labour availability and compliant product supply before promising a start date.

8. Treat refurbishment programmes differently. For occupied higher-risk buildings, allow for access restrictions, resident liaison, surveys, approval timing and unexpected conditions.

The improved Gateway 2 figures are genuinely positive. A 92% new-build approval rate and a 22-week median determination time show that the system is moving in the right direction. But the 1,654 live applications also show that demand is arriving quickly, and the internal works backlog remains substantial.

For contractors in Essex, Kent and London, the immediate priority is not simply finding work. It is taking on the right work with a realistic programme, properly allocated delay risk and insurance that reflects the building safety environment.

Moyak Insurance Services provides individual guidance for businesses arranging Business Insurance in Essex and London. We can help contractors review their requirements before they commit to a higher-risk building project, rather than discovering a gap after the programme has already started.

This article provides general information only. It is not legal, regulatory, contractual or financial advice. Contractors, developers and design teams should obtain advice specific to their project and review policy terms with their broker and insurer.

Frequently asked questions

What is the latest Gateway 2 caseload?

The Building Safety Regulator reported 1,654 live Gateway 2 applications at the end of August 2026, an increase of more than 100 in one month.

Why are Gateway 2 applications increasing?

The rise appears to be connected to the Building Safety Levy taking effect on 1 October 2026. BSR believes some developers may be submitting applications early, and expects new-build applications to increase further during September.

How long is a Gateway 2 approval currently taking?

For new-build higher-risk buildings, the reported median determination time has fallen to 22 weeks, compared with 43 weeks a year earlier. This is a median, not a guaranteed timescale for every project.

Are refurbishment and internal works also affected?

Yes. BSR received 457 higher-risk building internal works applications in the latest 12-week period but made 143 decisions. The live internal works caseload has reached 1,082 applications.

What insurance should contractors review?

Contractors should review contract works, public liability, employers’ liability and, where relevant, professional indemnity insurance. They should also check protection for advance-purchased materials, delayed starts, work on occupied buildings and design responsibilities.

Who carries the risk of a Gateway 2 delay?

That depends on the contract. Tenderers should check whether commencement is conditional on approval, how extensions of time and prolongation costs are handled, and whether liquidated damages or bond obligations continue during approval delays.

The Ardmore story has moved into its next stage. Creditors have backed rescue proposals designed to protect seven Byrne-controlled group companies from following the main contracting businesses into administration, while chairman Cormac Byrne prepares to pursue an appeal against the landmark Building Liability Order ruling.

The proposals, overseen by business recovery specialist BTG, cover Ardmore Group Holdings, Ardmore Group, Byrne Properties, Celebration Homes, Paddington Construction, Systemhaven and Byrne Estates (Kensal Green). The companies can continue trading while repaying creditors under agreed terms, following the collapse of Ardmore’s main contracting operations in June 2026.

Crest Nicholson and major bonding providers are understood to have supported the proposals, helping carry the creditors’ vote. The immediate objective is to preserve value in the wider Byrne-controlled property group rather than allow those assets and businesses to follow the contracting arm into administration.

For subcontractors, developers and construction business owners across Essex, Kent and London, there are two separate but connected lessons here. The first concerns how a Company Voluntary Arrangement affects the people and businesses owed money. The second is much wider: the company that signed the original construction contract may not be the only company exposed when historic building-safety liabilities arise.

What the Ardmore CVA means for creditors

A Company Voluntary Arrangement, or CVA, is a formal agreement between a company and its creditors. It allows the company to continue trading while repaying some or all of its debts over an agreed period.

That makes a CVA different from administration. In an administration, control passes to administrators and the business may be sold, wound down or restructured. A CVA leaves the directors managing the company, although the arrangement is supervised and creditors must be treated according to its terms.

For an unpaid subcontractor, however, continued trading does not mean the debt is paid in full or paid quickly. Unsecured creditors will usually receive less than the total amount owed, often through staged payments over several years. The precise outcome depends on the proposal, the company’s assets, the level of creditor support and the terms agreed in the vote.

Cashflow is therefore the immediate concern. A subcontractor may have already paid wages, materials, plant hire, VAT and other project costs while waiting for a main contractor’s payment. If that receivable is then placed into a CVA, the subcontractor is effectively financing someone else’s rescue.

Retention money also needs careful attention. Whether retention is held on trust, ring-fenced, subject to a particular contract mechanism or treated as an unsecured debt will depend on the contract and the facts. A CVA does not automatically turn every amount described as retention into money that can be recovered immediately.

The same applies to bonds. A subcontractor or developer may have rights under a performance bond, advance payment bond or parent company guarantee, but those rights must be reviewed separately from the CVA. The bond provider may have its own conditions, notice requirements and arguments about whether a call is valid.

This is why the earlier Moyak post on the Ardmore £5m subcontractor lesson is relevant beyond the usual liability covers. Insurance and credit management should be considered together, particularly where a business is dependent on one or two large customers.

Why this matters to subcontractors

Subcontractors should not wait for a formal insolvency notice before reviewing their exposure. Warning signs can include:

• Slower payment of applications or certified sums.
• Repeated requests to extend payment terms.
• Unusual pressure to continue work without an agreed payment plan.
• Delays in returning retention.
• Requests to accept a new group company as the contracting party.
• Changes to purchase orders, guarantees or payment instructions.
• A sudden increase in the value of work being carried out for one customer.

Good relationships matter in construction, but goodwill is not a credit-control system. Set sensible credit limits, monitor overdue balances and consider whether trade credit insurance is appropriate for your business. Keep a clear record of applications, payment notices, pay-less notices, variations, instructions and correspondence.

If a customer enters a CVA, establish quickly whether you are a secured, preferential or unsecured creditor, what payments are proposed, whether ongoing work is covered by new terms and whether you have rights to suspend or terminate. Take legal advice before stopping work or removing materials, as the consequences can be different depending on the contract and site circumstances.

The Building Liability Order appeal

The CVAs also create a platform for Ardmore to challenge the High Court’s approach to Building Liability Orders, or BLOs.

The underlying dispute began with a £14.9 million adjudication award secured by Crest Nicholson against Ardmore Construction, now in administration. The claim concerns fire-safety defects at Admiralty Quarter in Portsmouth, constructed between 2007 and 2009 under a JCT 1998 design-and-build contract.

In April 2026, the Technology and Construction Court held that seven associated Ardmore companies could be made jointly and severally liable. The court also confirmed that:

• A BLO can be made before the original liability has been finally determined.
• An adjudicator’s decision can amount to a relevant liability for BLO purposes.
• The “just and equitable” test is broad and is not limited to cases involving abusive special purpose vehicles.
• The relative wealth of sophisticated parties carries little weight in the circumstances of the case.
• The claimant’s insurance position should receive little or no weight when deciding whether a BLO is appropriate.

That April 2026 TCC ruling has been widely discussed because it confirmed a broad approach to Building Liability Orders in the Ardmore context. Ardmore is now preparing an appeal, and the industry is watching closely because the outcome could shape how far historic building-safety liabilities can extend across a corporate group.

If the appeal succeeds, the reach of BLOs could be narrowed. If it fails, the present direction of travel will remain highly significant for holding companies, sister companies, property-owning entities and overseas parents.

Reported potential exposure for associated Ardmore companies has been put as high as £300 million, although the ultimate outcome of any claims will depend on the facts, liability, causation, limitation and quantum in each case.

The risk to group companies

The practical point for directors is straightforward: separate legal personality remains important, but it is not an absolute shield against building-safety liabilities.

The court’s approach means that a group cannot assume its exposure stops with the entity that signed the building contract. Depending on the facts, the associated companies may include a parent, sister company, property company or overseas entity.

The recent decision discussed by Osborne Clarke on HB (WM) Ltd v STO Ltd is another indication that the courts may allow building-safety claims involving foreign associated companies to proceed where English law governs the underlying liability.

That matters to groups operating from London, Essex and Kent, including those that use separate companies for development, contracting, property ownership and investment. Directors should understand where historic residential work sits, which entity employed the relevant subcontractors, where project records are held and how insurance was arranged at the time.

The Building Safety Act also extended limitation periods for certain claims, in some cases reaching back up to 30 years. A project completed many years ago should not automatically be treated as irrelevant.

Where Construction Contractor Insurance may become complicated

Traditional professional indemnity and liability programmes are often arranged entity by entity, or project company by project company. That may create uncertainty where a court imposes liability on an associated company that did not carry out the physical work and was not the named insured under the original policy.

A group should review:

• Whether every relevant trading and holding entity is insured or named appropriately.
• Whether historic work is covered under a suitable run-off or continuation arrangement.
• The retroactive date and territorial scope of professional indemnity cover.
• Whether policy notification requirements were followed when historic defects first became known.
• How exclusions for known circumstances, rectification work and contractual liabilities operate.
• Whether cover responds to claims made against an associated company under a statutory order.
• The position where an insurer has merged, withdrawn from the market or no longer writes the relevant class of business.

A standard public liability policy is not a substitute for professional indemnity cover where design responsibility or technical advice is involved. Equally, professional indemnity cover should not be assumed to respond to every BLO-related cost. Policy wording, the identity of the insured, the trigger for the claim and the nature of the alleged liability all matter.

Directors and officers should also discuss D&O insurance with their broker and legal advisers. D&O policies may respond to certain allegations of wrongful acts, investigations or defence costs, but they will not automatically pay a company’s building-remediation liability. The insurance position of a claimant also does not, by itself, prevent a BLO from being made.

Our earlier Moyak post, Courts Can Now Reach Your Whole Company Group, explains why construction cover needs to reflect the actual structure and activities of the business rather than simply provide a certificate for a tender file.

A practical review for construction businesses

I recommend that contractors and group-company directors take the following steps:

1. Map the group. Identify parent companies, subsidiaries, sister companies, property companies, dormant entities and overseas owners.
2. List historic residential projects. Record completion dates, contract parties, designers, subcontractors, materials and current ownership.
3. Locate the records. Preserve drawings, specifications, inspection reports, warranties, fire assessments, completion documents and correspondence.
4. Review limitation exposure. Ask legal advisers which historic projects could fall within extended Building Safety Act or Defective Premises Act periods.
5. Audit insurance by entity. Check named insureds, policy periods, retroactive dates, run-off arrangements and notification obligations.
6. Review group guarantees and bonds. Understand what could be demanded if a contracting entity becomes insolvent.
7. Monitor customer credit. Use credit limits, staged payments and appropriate security rather than relying on informal assurances.
8. Get advice before restructuring. Moving assets, contracts or operations within a group may have legal, tax, insurance and creditor consequences.

The wider lesson

The Ardmore CVA may preserve businesses, property interests and employment, but it does not remove the pressure on creditors or resolve the wider BLO debate. Subcontractors still need to understand their recovery position, while group companies need to examine historic liabilities that may previously have appeared confined to one trading entity.

For businesses looking for Construction Contractor Insurance, General Contractor Liability Insurance or wider Business Insurance in Essex and Business Insurance London, the sensible approach is to review the whole risk picture. That includes the company structure, the contracts, the customer ledger, the bond programme and the historic insurance arrangements. Our related Moyak posts on the Ardmore £5m subcontractor lesson, Courts Can Now Reach Your Whole Company Group and the Mulalley v Sto overseas-parent ruling give useful background on how these issues are developing.

The market is moving towards greater scrutiny of corporate groups and long-tail building safety risk. Contractors who map their exposure now will be in a stronger position to negotiate with insurers, lenders, developers and trading partners later.

This article is for general information only and does not constitute legal, financial or insurance advice. A CVA, Building Liability Order, construction contract or insurance policy should be reviewed by appropriately qualified professional advisers.

Sources and further reading

• Construction Enquirer: Creditors back Ardmore CVA rescue plan
• Mills & Reeve: analysis of Crest Nicholson v Ardmore and Building Liability Orders
• Osborne Clarke: Building Liability Orders and foreign companies
• Building Safety Act 2022, section 149

The UK data centre boom is no longer a future possibility. It is already creating major opportunities for contractors, sub-contractors and specialist trades across Essex, Kent, London and the wider South East.

Some commentators have described the expansion as the biggest UK construction boom since the post-war rebuild. That may sound dramatic, but the numbers explain the excitement. Global spending on data centre infrastructure is expected to exceed $1 trillion by 2030, while London remains one of Europe’s five major data centre hubs alongside Amsterdam, Dublin, Frankfurt and Paris.

During 2025, more than 60 separate planning applications were made for new data centres in England and Wales alone, and the pace is increasing. Government-backed AI Growth Zones are also supporting new development, with qualifying sites expected to provide at least 100 acres of developable land, together with a credible remediation plan where land needs enabling works.

For contractors, this is an important commercial opportunity. It is also a warning. A data centre package should not automatically be treated like a conventional warehouse, office or industrial unit. The construction risks are different, the interfaces are more complicated and the financial consequences of delay can be much greater.

Why data centres are different

The UK is land-scarce compared with the United States. Instead of building only large, single-storey campuses, developers are increasingly looking upwards, creating multi-storey facilities with dense electrical, cooling and mechanical systems.

There is also greater use of modular and prefabricated units. Power rooms, cooling systems and data hall components may be manufactured away from the main site, transported across the country and installed in carefully sequenced phases.

That approach can improve consistency and speed, but it creates more points at which something can go wrong:

• Components can be damaged during manufacture, storage or transport.
• A defect in one repeated module may affect many parts of the project.
• Responsibility can become unclear between the designer, manufacturer, installer and main contractor.
• A late discovery may require extensive strip-out and replacement work.
• A specialist supplier becoming insolvent can be difficult to replace.

This is one reason why AXA XL’s analysis of the UK data centre boom describes data centres as a growing specialist construction class rather than simply another form of commercial building.

Power, cooling and construction-phase risks

Power is central to every data centre project. Large developments need enormous capacity, but grid connections can be delayed or constrained. Some schemes will also use on-site generation, such as combustion turbines, fuel cells and diesel generators, while more experimental projects may be linked to nuclear generation or other first-of-kind power systems.

New technology can solve one problem while creating another. Unfamiliar equipment and complex integration increase the likelihood of installation faults, commissioning problems and delays. Those risks become more serious where parts of the site are energised while other areas are still under construction.

Cooling is another major exposure. Rising server density, particularly from artificial intelligence workloads, is driving increased use of liquid cooling. This introduces risks involving corrosion, material incompatibility, condensation and installation defects.

Open-loop cooling systems may require very large volumes of water. Thames Water has estimated that one data centre could require up to 19 million litres a day. Closed-loop systems reduce some of that demand but can be highly bespoke, which means the quality of design, installation and testing becomes especially important.

The construction environment itself also needs careful control. Dust, water ingress and airborne contamination can damage highly sensitive GPU and server equipment. Hot works, fire suppression, temporary power, housekeeping and access routes all need to be planned around the equipment being installed.

A small event can create a large claim. A water leak in an ordinary commercial building may damage finishes and stock. In a data centre, it could contaminate critical equipment, interrupt testing and delay the opening of an entire facility.

Zurich has made the sensible point that limited historical losses should not be mistaken for low risk. The sector is changing faster than the claims data. Insurers therefore need to assess how the project is designed and managed, rather than relying only on what happened in older buildings.

Delay may matter more than physical damage

The scale of these developments is increasing quickly. Individual designs may range from around $1 billion to $20 billion, while hyperscale campuses globally are now routinely valued at $30 billion to $40 billion.

At that scale, the largest financial loss may not be the cost of repairing physical damage. It may be the delay that follows.

Data centres have strict operational commitments, long commissioning programmes and substantial contractual dependencies. A damaged transformer, cooling unit, switchgear component or prefabricated module may not be available immediately. Expediting a replacement can be extremely expensive, particularly where semiconductors, specialist materials and imported equipment are involved.

This creates significant exposure under Business Interruption and Delay in Start-Up arrangements. It also explains why the Aon 2026 Global Construction Insurance and Surety Market Report identifies digital infrastructure as one of the defining drivers of construction insurance.

For contractors, delay and disruption clauses need to be understood before a price is submitted. Liquidated damages, milestone obligations and responsibility for late handovers can materially change the profitability of a package.

What this means for contractors in the South East

This opportunity is not limited to Tier 1 contractors. Data centre projects need a broad range of businesses, including:

• Groundworks and civil engineering contractors
• Concrete frame and structural steel specialists
• Cladding and building envelope contractors
• Mechanical, electrical and HVAC contractors
• Fire suppression and detection specialists
• Security, access control and communications installers
• Fit-out, logistics and specialist handling contractors

Many of these businesses are based in Essex, Kent and London, particularly around the M25 corridor and established industrial areas. New AI Growth Zone sites may also create opportunities outside the traditional London cluster.

However, contractors need to review their insurance before accepting this type of work.

Construction Contractor Insurance

Contract works or Contractors All Risks cover must reflect the actual project scope. This is particularly important where equipment is stored on site, where works are phased, or where modules are manufactured elsewhere and later delivered for installation.

Questions to consider include:

• When does cover attach to equipment stored away from the main site?
• Who is responsible for damage during transport and unloading?
• Are testing and commissioning phases included?
• Are temporary works, temporary power and specialist plant adequately insured?
• Would the policy respond to the cost of accessing, stripping out or reinstating defective work?

A standard wording may not deal properly with the full construction and installation process.

General Contractor Liability Insurance

The number of contractors operating on one site creates substantial interface risk. A mistake by one specialist may damage another contractor’s work, injure someone else’s employee or affect high-value equipment belonging to the developer.

Main contractors and developers may also require higher limits, strict contractual indemnities and additional insured arrangements. These requirements should be checked against the policy rather than accepted without discussion.

Our general contractor insurance service is designed around the fact that contractors often need several covers working together, including employers’ liability, public liability, products liability, contract works, hired-in plant and goods in transit.

Professional indemnity

Professional indemnity becomes relevant when a contractor takes on design, coordination, specification, commissioning advice or certification. This is common in mechanical and electrical packages, modular installation and specialist systems integration.

The distinction between “design” and “installation” is not always clear in a data centre contract. Before signing, contractors should check whether they are warranting performance, approving someone else’s design or accepting responsibility for the final system.

Our earlier guidance on building safety, contractor liability and the changing boundary between liability and PI is also relevant here.

Practical steps before tendering

Before pricing a data centre package, I recommend that contractors:

1. Read the exact scope and insurance conditions. Do not rely on a generic trade description.
2. Identify where responsibility changes hands. This includes manufacture, storage, transit, installation, testing and handover.
3. Check the treatment of sensitive equipment. Confirm who is responsible for protection, security and environmental conditions.
4. Review hot-works and fire-control arrangements. These should be practical for the actual construction sequence.
5. Agree handover and interface protocols. Written records can be crucial when several contractors work in confined areas.
6. Understand delay and liquidated damages provisions. A profitable package can become loss-making if delay responsibility is open-ended.
7. Disclose the work accurately at renewal. Describe the project, your scope and any design responsibility clearly.
8. Use an advice-led broker review. Generic online cover may not respond to a specialist data centre package.

A growing market with changing insurance capacity

Insurers are treating data centres as an attractive but fast-evolving class. AXA XL has established a Special Interest Group focused on data centres, while Aon has supported Factory Mutual in sourcing an additional US$5 billion of cover for data centre risks.

That does not mean capacity will always be simple to obtain. The concentration of values is a concern because data centres tend to cluster where power, land and incentives exist. Aon has warned that several physically separated and individually fire-protected sites may be preferable to one enormous campus.

Public resistance is another issue. Planning refusals, judicial reviews and moratoria can create delay or abandonment exposure before construction is complete. The proposed hyperscale development at Iver in Buckinghamshire is a useful reminder: the government accepted a “serious logical error” in the approval process after environmental concerns involving power, water and sustainability.

Proposed changes to the National Planning Policy Framework, following a consultation that closed on 10 March 2026, aim to streamline consent for data centres and their power generation. That may support development, but it will not remove local planning, environmental or supply-chain risks.

The opportunity is real, but preparation matters

The data centre boom is likely to remain a major source of construction work for the next five to ten years. Contractors in Essex, Kent, London and the wider South East are well placed to benefit, but the successful businesses will be those that understand the risk before accepting the work.

A data centre package may involve unusual storage arrangements, demanding handovers, modular components, specialist design duties and severe delay consequences. Your Construction Contractor Insurance and General Contractor Liability Insurance should be built around those facts.

If you are considering a data centre tender, speak to Moyak before signing the contract or confirming your price. We can review the scope and help you arrange suitable Business Insurance Essex or Business Insurance London based on your actual work, turnover and responsibilities.

General information disclaimer: This article provides general information only and does not constitute insurance, legal, planning or engineering advice. Policy cover, exclusions, conditions and limits vary between insurers. Contractors should obtain advice on their specific contract and insurance programme before starting work.

Frequently asked questions

Is data centre work covered by standard construction insurance?

Not necessarily. Standard construction policies may not fully address off-site manufacturing, modular components, sensitive equipment, phased commissioning, testing or extended delay exposure. The policy should be reviewed against the actual package and contract.

Do specialist trades need General Contractor Liability Insurance for data centre work?

They may need public liability, employers’ liability, products liability and, depending on their responsibilities, professional indemnity. Main contractors and developers may also impose specific limits and contractual requirements.

Why is cooling such a significant data centre insurance risk?

Modern data centres generate substantial heat, particularly where high-density AI servers are installed. Liquid cooling systems can introduce risks including leaks, condensation, corrosion, material incompatibility and installation defects, all of which may damage equipment or delay completion.

Does a data centre contractor need professional indemnity insurance?

Professional indemnity may be appropriate where the contractor provides design, design coordination, system specification, certification, commissioning advice or performance warranties. The contract and the policy wording should be checked together.

When should a contractor review insurance for a data centre package?

Ideally before tendering. Reviewing the insurance after the contract is signed may leave little room to negotiate unsuitable conditions, limits or exclusions.

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Suggested publication: Thursday, 3 September 2026 at 6:00 PM Europe/London

The UK’s cladding remediation programme is moving into a second, much larger phase.

The latest figures from the Ministry of Housing, Communities and Local Government (MHCLG), covering progress to the end of July 2026, show that 2,146 of 4,697 monitored buildings have not yet started remediation. That is 46% of the identified programme still waiting to become live construction work.

The opportunity for contractors is significant, particularly across London, Essex, Kent and the wider South East. But the projects coming through this pipeline will not be straightforward recladding packages. They are likely to involve external wall systems, fire safety defects, non-cladding work, complex approvals, occupied buildings, strict deadlines and demanding insurance requirements.

In practical terms, the next few years could produce one of the largest specialist remediation workstreams the construction sector has seen. Contractors who prepare early will be better placed to win the work and deliver it without taking on liabilities they cannot properly insure.

The backlog is concentrated in the newer programmes

The government’s data shows a clear difference between the original remediation programmes and the newer routes.

The high-profile ACM programme is close to completion, with 478 of 516 buildings completed. The Building Safety Fund is also further advanced, with 487 of 639 buildings completed, 75 under way and 77 yet to begin. Social landlords self-funding remediation have reported 474 of 742 buildings complete, with a further 100 on site.

The larger backlog sits elsewhere.

Under the Cladding Safety Scheme (CSS), just 127 of 1,438 eligible buildings have completed works, equivalent to 9%. A further 269 buildings are on site, leaving 1,042 buildings, or nearly three-quarters of the eligible CSS programme, still waiting to start.

The workload is also growing. A further 2,253 buildings are at pre-eligibility stages, including 1,352 live applications and 901 pre-applications. Those buildings may not all proceed to construction, but the direction of travel is clear: the CSS pipeline is still converting assessments and applications into future projects.

The developer remediation route shows a similar pattern. Of 1,833 buildings identified with unsafe cladding, 566 are complete and 296 are under way. That leaves 971 buildings, or 53%, where work has not started.

Across the wider developer remediation contract, which includes other life-critical fire safety defects, the estimated remediation bill is now around £4.3 billion.

This is a construction opportunity, but not a simple one

It is tempting to view these numbers as thousands of standard cladding replacement contracts. That would be a mistake.

A remediation project may include:

• Removal and replacement of cladding and insulation
• Fire barriers, cavity barriers and compartmentation work
• Repairs to external wall systems
• Non-cladding fire safety defects
• Temporary protection and resident safety measures
• Scaffolding and traffic management in constrained locations
• Design development and technical assessments
• Building control approval and final sign-off

Many projects will also involve occupied residential buildings. That means contractors must manage resident communication, access, noise, dust, temporary weather protection and the possibility of discovering further defects once the external wall is opened up.

Gateway 2 is another important practical issue for higher-risk buildings. A contractor may be ready to mobilise, but the project cannot simply proceed if the design information, building control submission or approval process is incomplete. The Building Safety Regulator has created a necessary control point, although the approval process remains a source of delay for many schemes.

Contractors should therefore assess whether they are genuinely equipped for remediation work before committing to a tender. That includes technical competence, document control, experienced subcontractors, financial resources and insurance capacity.

Insurance needs to be reviewed before tendering

Remediation work can expose a contractor to a wider range of risks than ordinary construction.

A standard liability policy may respond to some third-party injury or property damage claims, but it does not automatically cover defective design, professional advice, contractual guarantees or the cost of putting defective work right. The wording and exclusions matter.

For contractors, the insurance review should usually include:

Construction Contractor Insurance

A suitable Construction Contractor Insurance programme should reflect the actual work being undertaken, not simply the contractor’s historic trade description.

The insurer may need to understand whether the business is:

• Removing or installing cladding
• Carrying out design-and-build work
• Acting as principal contractor
• Undertaking fire safety or compartmentation work
• Working on higher-risk or occupied buildings
• Using specialist subcontractors
• Accepting responsibility for surveys, specifications or certification

Contract works cover should also be checked for recladding projects, especially where materials are stored on site, buildings remain occupied or the contract requires temporary works and protection.

General Contractor Liability Insurance

General Contractor Liability Insurance should be reviewed against the contract’s indemnity requirements, the height and use of the building, the presence of residents and the potential severity of a fire safety-related claim.

Higher limits, different excesses or project-specific arrangements may be needed. Contractors should not assume that a certificate showing a familiar limit proves that every remediation liability is covered.

Professional indemnity

Professional indemnity exposure can arise where a contractor undertakes design, design coordination, FRAEW-related work, technical assessments, specification or certification.

The professional indemnity market remains cautious around cladding and fire safety. Some policies include exclusions, sub-limits or specific conditions. A contractor should check that the proposed scope is consistent with the cover available before signing a design-and-build appointment.

Our article on the PI exposure hiding in construction contracts explains why design responsibility can expand quietly through contract wording.

Historic work is another concern. If an existing defect relates to a previous project, notification obligations may arise under claims-made professional indemnity policies. Contractors should review their records rather than waiting for a formal claim. Our earlier article on transfer slabs and construction liability looks at the wider problem of legacy structural exposure.

Contract terms may be as important as the insurance

Remediation contracts are likely to contain fixed deadlines, liquidated or liquidated and ascertained damages (LADs), collateral warranties, performance security and extensive reporting requirements.

Contractors should take particular care with:

• Long-stop completion dates
• LAD rates and caps
• Obligations linked to funding deadlines
• Fitness-for-purpose wording
• Design responsibility and certification
• Indemnities for historic defects
• Requirements to obtain Gateway 2 approval
• Performance bonds and parent company guarantees
• Rights to suspend or terminate if information is delayed

The recent discussion around the Durkan v Wallace decision is relevant here. The case demonstrates that terminating a remediation contract is not risk-free. The threshold for establishing repudiatory breach is high, and a contractor or employer may find that delays, approval problems and poor records do not automatically justify termination.

The practical lesson is straightforward: keep a careful record of design submissions, information requests, approval delays, change instructions, access restrictions and extensions of time. If the project becomes difficult, contemporaneous evidence will be more useful than retrospective explanations.

Surety capacity is also under pressure. Funders and building owners may require performance bonds, advance payment bonds or other security, while contractors are already facing more detailed underwriting and tighter aggregate limits. Read our article on the surety squeeze and what it means for contractors before assuming that a bond can be arranged at short notice.

What developers and building owners should do now

Developers, landlords and housing associations also need to prepare for the next stage.

The available funding routes may include the CSS, developer remediation commitments and the new Under-11-Metre Cladding Fund, which opened on 17 August 2026 and closes on 9 October 2026.

Responsible entities should:

1. Map every building, its height, tenure, external wall system and current assessment status.
2. Prioritise buildings requiring a PAS 9980-based Fire Risk Appraisal of External Walls.
3. Check eligibility under each relevant funding and redress route.
4. Review developer commitments, warranties and historic insurance policies.
5. Record all communication with residents, contractors, assessors and regulators.
6. Review the Remediation Contribution Order (RCO) and building liability order (BLO) risks with legal advisers.
7. Avoid signing remediation contracts before the scope, funding route and approval process are understood.

MHCLG estimates that dealing with unsafe external wall systems on buildings over 11 metres could cost between £11.8 billion and £22.7 billion, with a central estimate of £15.1 billion. Government programmes are expected to fund around £8.9 billion, while developers, housing associations and other non-government bodies may meet approximately £6.1 billion.

The department also estimates that between 5,800 and 7,300 buildings may ultimately require remediation or mitigation. With 4,697 buildings currently monitored, another 1,100 to 2,600 could still enter the programme.

That is why the current backlog should not be treated as the full market opportunity.

A practical checklist for contractors

Contractors in Essex, Kent and London should consider the following before pursuing remediation work:

• Identify the CSS, developer-led and privately funded projects likely to reach tender.
• Build relationships with competent fire safety designers, assessors and specialist subcontractors.
• Prepare Gateway 2-ready document and change-control processes.
• Review LADs, completion deadlines and extension-of-time provisions.
• Secure performance bond and surety capacity early.
• Check that PI cover responds to design, FRAEW-related and certification responsibilities.
• Review contract works, public liability and employers’ liability arrangements.
• Confirm how historic notifications and previous work will be handled.
• Make sure turnover, project values, building heights and trade descriptions are accurate at renewal.

For businesses arranging Business Insurance Essex or Business Insurance London, the key issue is not simply finding the lowest premium. It is making sure the insurance programme reflects the work the business is now being asked to undertake.

The next phase will reward preparation

The cladding clean-up is no longer just an urgent regulatory problem. It is becoming a substantial, multi-year construction workstream.

The figures show that the early ACM and high-rise Building Safety Fund programmes are close to completion, while the larger CSS and developer pipelines are still waiting to convert identified risk into live projects. That conversion will bring valuable work for capable contractors, but it will also expose gaps in contract management, technical evidence, professional indemnity and surety arrangements.

My view is that the contractors best placed to benefit will be those who prepare before the tender arrives. Review the insurance now, understand the design responsibilities, check the approval pathway and negotiate contract terms that the business can realistically perform.

If you are a contractor, developer, housing association or building owner in Essex, Kent or London, contact Moyak Insurance Services to discuss your construction insurance, liability, professional indemnity and wider business insurance requirements.

This article is for general information only and does not provide legal, fire safety, funding or insurance coverage advice. Policy response depends on the wording, facts and circumstances of each case. Obtain specialist advice before tendering for or entering into a remediation contract.

Frequently asked questions

How many buildings are still waiting to start cladding remediation?

MHCLG data to the end of July 2026 shows that 2,146 of 4,697 monitored buildings, or 46%, had not yet started remediation.

How far has the Cladding Safety Scheme progressed?

Of 1,438 eligible CSS buildings, 127 had completed works and 269 were on site. A total of 1,042 buildings, or 72%, had not started work.

Is the cladding remediation pipeline still growing?

Yes. A further 2,253 buildings were at pre-eligibility stages under the CSS, including 1,352 live applications and 901 pre-applications.

What insurance might a contractor need for remediation work?

Depending on the scope, a contractor may need Construction Contractor Insurance, General Contractor Liability Insurance, contract works cover, employers’ liability insurance, professional indemnity and project-specific or latent defects arrangements.

Why does Gateway 2 matter to remediation contractors?

Gateway 2 approval can be required before work starts on higher-risk buildings. Delays or incomplete design information can affect mobilisation, programme dates, LAD exposure and the contractor’s ability to perform its contract.

Should contractors arrange surety before winning a project?

They should begin discussions early. Remediation contracts may require performance bonds or other security, and surety providers may need detailed financial, contract and project information before offering capacity.

Transfer slabs are quickly becoming one of the most important emerging building-safety and professional indemnity issues for the construction sector.

They are not new. In fact, they have been used widely in UK residential and mixed-use developments, particularly from the early 2000s onwards. What has changed is the level of scrutiny being applied to their design, construction and assessment, and the consequences for those involved in historic projects.

The concern is not that every building containing a transfer slab is unsafe. It is that some historic design methods may not have properly assessed the way concentrated column loads pass through the slab. If a weakness exists, the resulting claims could resemble the cladding disputes that have already affected contractors, developers, consultants and insurers across Essex, Kent, London and the wider UK.

What is a transfer slab?

A transfer slab is a heavily reinforced concrete structural element that redistributes building loads where the columns above do not line up with the columns or walls below.

This arrangement is common where a building changes use or layout between floors. For example, a development may have a wide column grid for retail units, a car park or an open podium at lower levels, with a tighter column grid supporting apartments above.

The transfer slab effectively carries the loads from the upper columns and transfers them sideways or across the slab to the supporting structure below. This creates valuable design flexibility, but it also creates a more complicated structural load path.

Transfer slabs are often found in:

• Mixed-use residential developments
• High-rise and medium-rise apartment buildings
• Buildings with retail or commercial space below residential floors
• Podium developments over underground car parks
• Hotels and buildings with changing column layouts
• Some buildings with setbacks, roof gardens or stepped façades

The Institution of Structural Engineers has noted that transfer slabs became increasingly common during the last two decades, helped by design-and-build procurement, flat formwork and the availability of advanced finite element modelling software.

Why is punching shear the main concern?

The central concern is punching shear.

This is a localised failure mechanism where a concentrated load from a column causes a section of concrete to punch through the slab. It is different from a straightforward bending failure and can be brittle, sudden and difficult to detect in advance.

The risk is especially important where columns above and below are closely spaced or significantly misaligned. Standard punching shear calculations may not always reflect the concentrated and uneven flow of forces through a transfer slab.

The potential consequences are serious. A local failure may affect the surrounding structure and, in a severe case, contribute to partial or progressive collapse. The Building Safety Regulator has confirmed that it is not aware of a UK building collapse caused by transfer slab failure, but it has warned that the potential risk needs to be identified and managed proportionately.

That distinction matters. The presence of a transfer slab is not, by itself, evidence of a defect. The practical question is whether the slab was properly designed, detailed, constructed, maintained and subsequently assessed.

The regulatory and technical warning signs

The Building Safety Regulator issued a warning to building owners and principal accountable persons in December 2025. It highlighted a potential structural safety issue affecting reinforced concrete buildings constructed with transfer slabs, with particular concern around punching shear.

The warning encouraged owners to establish whether their buildings contain transfer slabs and to seek professional advice where there are visible signs of distress or specific concerns about the building’s condition or design. It also stressed that the presence of a transfer slab does not automatically mean residents should be evacuated.

RICS subsequently issued advice and a Practice Alert, followed by further communications in March 2026. Its guidance is aimed at helping surveyors and other professionals recognise when a transfer slab may be present and understand when a specialist structural engineer should be appointed.

In July 2026, IStructE published its Q&A and guidance, Design and Assessment of Reinforced Concrete Transfer Slabs. This is an important development because the earlier November 2024 guidance focused mainly on new-build design. The July update recognises the urgent need to identify and assess slabs that are already in service.

The current position is interim. IStructE is developing dedicated assessment guidance for existing transfer slabs, expected in 2027. In the meantime, the existing design guidance can be used carefully as a benchmark for assessments, with appropriate consideration of the age, construction quality, available records and limitations of applying modern criteria to older buildings.

Wotton Court shows how quickly the issue can become a legal problem

The issue has already reached the First-tier Tribunal.

In December 2025, the Tribunal made a remediation order concerning Block P, Wotton Court, a 12-storey residential building at the Virginia Quay development in Poplar, London. Residents had been required to vacate part of the building after cracking was identified around supporting pillars and the first-floor slab.

Engineering evidence indicated that punching shear failure was highly likely, although further investigation was needed to establish the precise cause and extent of the defects. The Tribunal ordered the relevant landlord to carry out a full building-wide structural investigation and remedy the defects, including any underlying causes.

The decision is significant because the order was not limited to a temporary fix. It required the relevant defects to be fully remedied, while leaving the precise engineering solution to be determined through competent investigation and design.

For building owners and managers, this demonstrates that structural defects can fall within the Building Safety Act 2022 remediation regime, not just cladding and fire-safety issues. For contractors and consultants, it shows how historic work can be revisited many years after completion.

The Building Safety Act increases the potential reach of claims

The Building Safety Act creates several routes through which remediation costs and liabilities may be pursued.

Remediation orders can require a relevant landlord to carry out works. Remediation contribution orders can then potentially require developers and associated companies to contribute to the cost. Building Liability Orders may also extend liabilities across a corporate group in appropriate circumstances.

The courts and tribunals have shown a robust approach. In Edgewater v Grey GR, the Upper Tribunal confirmed that remediation contribution orders can impose joint and several liability and that the “just and equitable” test does not necessarily require direct participation in the development or financial gain from it.

In Secretary of State v EDR Builders, the Tribunal also rejected the idea that a remediation award must automatically be reduced simply because a cheaper scheme could have been used. If the works fell within the band of reasonable responses based on the information available at the time, the existence of a cheaper alternative was not, by itself, enough to reduce the award.

These decisions sit alongside the wider lessons from cases such as Mulalley v Sto and our article on Building Liability Orders and the whole company group.

The message for construction businesses is straightforward: a dormant project company or a complicated corporate structure may not prevent historic liabilities from being pursued.

What does this mean for professional indemnity insurance?

Transfer slab claims may involve several categories of insured professional activity, including:

• Structural design and engineering
• Architectural coordination
• Specification and detailing
• Design checking and verification
• Construction and reinforcement placement
• Site inspection and certification
• Building surveying and later assessment
• Warranty and technical review

Potential losses may include investigation costs, temporary propping, access arrangements, remedial design, construction works, alternative accommodation, diminution in value and claims arising from structural failure.

Construction professional indemnity insurers are likely to scrutinise the quality of risk management and quality assurance on historic projects. They may also face complex disputes about who was responsible for the design, whether the design was properly checked, what information was available, whether the construction matched the drawings and when the insured first became aware of a potential issue.

The recent decision in Durkan v Wallace is also a reminder that building-safety disputes can become fact-heavy and protracted. Delay, regulatory approval, contractual responsibility and the parties’ conduct may all need to be examined before liability or recovery prospects are clear.

This is why notification obligations matter. If a contractor, engineer, surveyor or consultant becomes aware of a circumstance that may give rise to a claim, it should review the policy wording and seek advice promptly. Waiting until a formal claim or remediation demand arrives can create avoidable problems.

Our guide to professional indemnity cover for contractors explains why contractual and historic design exposure should not be overlooked.

Practical steps for contractors and professionals

If your business designed, specified, built, inspected or certified residential or mixed-use buildings with transfer slabs from around 2000 onwards, I think a proportionate historic review is sensible.

Start by identifying projects where transfer slabs may have been used. Review project drawings, structural calculations, reinforcement details, inspection records, completion information and any later reports. Pay particular attention to higher-risk buildings and developments where the column layout changes substantially between floors.

You should also:

1. Establish what your business’s precise role was on each project.
2. Check whether design responsibility was retained, transferred or shared.
3. Review quality assurance, reinforcement inspection and concrete-pour records.
4. Preserve project records and maintain a clear audit trail.
5. Identify circumstances that may need to be notified to PI insurers.
6. Ensure all new transfer slab work follows current IStructE guidance.
7. Obtain specialist structural advice rather than relying on a general inspection.
8. Record assumptions and limitations where historic information is incomplete.

For new work, the IStructE guidance should be treated as an important part of the design and verification process. For existing buildings, the assessment should be carried out by a suitably experienced structural engineer and should consider actual geometry, reinforcement, materials, construction quality, loads, cracking, deflection and the wider consequences of failure.

What should building owners and managers do?

Owners and managers should first establish whether a transfer slab exists. This may require a review of original drawings, building information models, structural calculations and as-built records.

Signs such as cracking, deflection, sloping floors, distorted finishes or misaligned doors and windows should not be dismissed where they occur near a suspected transfer slab. They do not prove a structural defect, but they may justify further investigation.

For a higher-risk building, the presence or absence of transfer slabs should be addressed in the safety case and risk register. Existing safety case reports may need updating as better information becomes available.

The appropriate response will depend on the building. It may be no further action, monitoring, targeted investigation, detailed analysis, strengthening or urgent temporary measures. A blanket response is not appropriate, but neither is ignoring the issue.

Insurance support for contractors in Essex, Kent and London

Transfer slabs are a structural issue, but the financial consequences will often be managed through construction insurance, professional indemnity policies and wider business risk controls.

Whether you are looking for Construction Contractor Insurance, General Contractor Liability Insurance or a broader review of your Business Insurance Essex or Business Insurance London arrangements, the important point is to discuss the actual work your business undertakes and the historic exposure it carries.

At Moyak Insurance Services, we take an individual approach because no two contractors have the same contracts, responsibilities or claims history. The right cover depends on whether you design, build, certify, inspect or manage work, and how your policy responds to historic projects and professional services.

Transfer slabs may prove to be the next major legacy construction risk to move from technical guidance into widespread remediation disputes. Contractors, developers, structural engineers and property owners should not wait for the first formal claim before reviewing their records, responsibilities and insurance position.

This article is for general information only and does not constitute structural, legal or insurance advice. Building owners and construction professionals should obtain advice from suitably qualified structural engineers, solicitors and insurance advisers based on their individual circumstances.

Frequently asked questions

What is a transfer slab?

A transfer slab is a heavily reinforced concrete slab that carries and redistributes loads where columns above do not align with the columns or walls supporting the structure below.

Are all buildings with transfer slabs unsafe?

No. The presence of a transfer slab does not, by itself, mean that a building is unsafe or needs to be evacuated. The design, construction, condition, loading, detailing and consequences of failure must be assessed on a building-specific basis.

What is punching shear?

Punching shear is a localised failure mechanism where a concentrated column load causes a section of concrete to punch through a slab. It can be brittle and sudden, which is why it is a key concern in transfer slab assessments.

Could transfer slab defects lead to an insurance claim?

Potentially. Deficiencies in design, specification, construction, inspection or later assessment may lead to professional negligence, construction liability or remediation claims. Policy response will depend on the wording, the insured’s role, the date of the work and notification requirements.

What should a contractor do if it worked on a building with transfer slabs?

The contractor should identify the project, establish its precise contractual and professional role, preserve relevant records and review whether notification to its professional indemnity insurer is required. It should also obtain specialist advice before making technical or legal conclusions.

Cash retention has been part of UK construction contracting for decades. Employers and main contractors have used it as security against defective work, incomplete works and the cost of putting problems right. Contractors and subcontractors, meanwhile, have often treated it as money they may eventually receive, but cannot use while the project is running.

That arrangement is now facing its most significant challenge yet.

The Commercial Payments Bill, introduced in the House of Lords on 19 May 2026, proposes to prohibit contractual provisions allowing retention sums to be deducted and withheld under construction contracts. The Bill completed Committee stage on 21 July, with Report stage due to begin when Parliament returns on Tuesday 1 September. Royal Assent is currently targeted during 2027, although the Bill may still be amended.

This is not an immediate overnight ban. There is intended to be a two-year transition period from commencement, followed by a run-off period for existing arrangements. But contractors, developers and subcontractors in Essex, Kent and London should start preparing now because the change will affect cash flow, contract security, tender pricing and the surety market.

Why the retention ban matters

The Bill is designed to address the wider problem of late commercial payments. Government figures indicate that late payments:

• Cost the UK economy approximately £11 billion each year
• Contribute to the closure of 38 UK businesses every day
• Lead to around 14,000 business closures each year
• Affect approximately 44% of SME invoices
• Require businesses to spend an average of 86 hours each year chasing payment

Construction has long experienced particular pressure because the supply chain can involve several layers of contractors, delayed valuations, disputed applications and retentions that remain unpaid until months after practical completion.

For a smaller subcontractor, the retained amount may represent wages, supplier payments or working capital. For a developer or main contractor, it provides a familiar form of protection if defects emerge. Removing it improves cash flow for the supply chain, but it also removes a security mechanism that employers have relied on for a long time.

The industry therefore needs to replace the function of cash retention, not simply remove the deduction.

What the proposed timetable means

The Bill proposes a phased approach.

During the first two years after commencement, existing retention clauses would remain lawful. This is the main transition period and should give businesses time to revise standard forms, tender assumptions and security arrangements.

From the start of year three, parties would not be able to agree or vary new retention clauses. Existing transitional clauses may continue to operate only for the permitted run-off period. At the end of year three, referred to as the last retention day, all retention clauses would become void, together with terms dealing with the treatment of retained sums.

Any transitional retained sum would then have to be paid within 30 days of the last retention day. The final date for payment would be a further 30 days for public-sector payers and 60 days for private-sector payers.

The Bill also proposes a penalty where a payer unlawfully deducts or retains money. The payee would be entitled to the retention debt itself, statutory interest and a fixed sum equal to the higher of £40 or 50% of the retention debt. Contracting out of that protection would be void.

The exact operation will depend on the final legislation and commencement regulations. The important point is that existing contracts cannot simply be ignored. Their retention provisions need to be mapped against the transition and run-off periods.

The wider payment changes

The retention ban is part of a broader set of payment reforms.

For relevant private-sector business-to-business contracts, the Bill proposes a statutory maximum payment term of 60 days. Public contracts would generally remain subject to 30-day payment requirements. There are limited exemptions, including some contracts between two large undertakings and certain arrangements where the purchaser is the smaller party.

Statutory interest would also be entrenched at 8% above the Bank of England base rate. Contract terms could no longer avoid that right by providing a different “substantial remedy”.

The Bill would also require invoice disputes to be raised within eight days before the payment due date, or by the due date where payment is due within 14 days of performance. A payer that raises a late dispute could face compensation of the higher of £40 or 1% of the contract price, or 1% of the disputed contract price.

Construction contracts would have additional requirements, including earlier pay less notices, limits on extensions to final payment dates and the removal of bank holidays as a reason for extending payment periods.

These measures may improve payment discipline, but they are also likely to create more arguments about valuation, notices, milestones, defects and entitlement. We should expect an increase in payment disputes and adjudications while the industry adjusts.

The Bill also proposes stronger powers for the Small Business Commissioner, including investigations into larger businesses, binding interim decisions in certain disputes, enforcement and publication directions, and fines of up to 1% of annual UK turnover.

What replaces cash retention?

Several alternatives are being discussed, but none is a perfect replacement.

Retention bonds

A retention bond can provide security to an employer without withholding cash from the contractor. The surety agrees to pay within the terms of the bond if the contractor defaults on specified obligations.

The difficulty is cost and availability. Retention bonds may be expensive for smaller contractors and subcontractors, and a surety may not offer them where the applicant’s financial strength is weak. Employers may also request an on-demand bond, while the UK market generally provides bonds on a default basis.

That distinction matters. A default bond normally requires the beneficiary to establish that the contractor has defaulted and that the relevant conditions of the bond have been met. It is not the same as being able to demand payment simply because a defect or disagreement has arisen.

Performance bonds

Performance bonds are already familiar, but they have generally been used alongside cash retentions rather than instead of them. Demand is likely to increase as employers seek wider protection against non-performance and insolvency.

Contractors should understand:

• Whether the bond is conditional or on-demand
• The percentage of the contract value required
• The events that allow a claim
• The expiry and maintenance provisions
• Whether the bond mirrors the underlying contract
• What indemnities the surety requires

This is particularly important given the tightening surety market discussed in our recent article, Ardmore Could Cost the Bond Market £100m: What the Surety Squeeze Means for Contractors in Essex and London.

If demand for bonds rises while sureties are reassessing exposure after major construction failures, contractors should not assume a facility will be available at short notice.

Project bank accounts and trust accounts

Project bank accounts can help improve payment through the supply chain by separating project money and reducing dependence on one party’s general cash flow. They may be particularly useful where the objective is to protect subcontractors.

Trust accounts could also be considered, although they are less common and their treatment under the final legislation will need careful review. Neither option necessarily gives an employer the same performance protection that cash retention provided.

Parent company guarantees

A parent company guarantee may provide additional support where a contractor or subcontractor is part of a financially stronger group. However, its value depends on the parent’s actual financial position, the wording of the guarantee and whether the parent remains within the relevant corporate structure when the claim arises.

Milestone payments

Milestone payments may become more common, with part of the contract sum becoming due when clearly defined stages are completed.

But drafting needs care. The Bill’s definition of retention is potentially wide and could capture an arrangement where a percentage of money is held back until a condition is met. A genuine payment milestone should be linked to a defined stage of performance, not operate as a disguised percentage deduction.

The same issue may arise where payment is withheld until a contractor provides collateral warranties, parent company guarantees or bonds. These provisions could arguably fall within the prohibition if they operate by withholding money that is otherwise due. The courts may ultimately need to decide where the line is drawn.

The impact on construction insurance

The retention ban will not turn a liability policy into a bond, and a bond does not replace insurance.

A Construction Contractor Insurance programme should be reviewed alongside the new security arrangements. Depending on the contractor’s role, this may include public liability, employers’ liability, contract works, professional indemnity, products liability, plant and business interruption cover.

For contractors, key questions include:

• Does the policy reflect the contracts being accepted?
• Are design, specification or coordination responsibilities covered?
• Are contractual liabilities wider than the insured negligence standard?
• Does the policy respond to disputes arising from defective or incomplete work?
• Are subcontractors and consultants properly insured?
• Are bond costs and collateral requirements included in tender pricing?
• Is trade credit insurance needed for major customer exposures?

General Contractor Liability Insurance should also be reviewed carefully. Public liability may respond to injury or third-party property damage, but it will not normally pay an employer’s bond claim, fund a retention debt or cover a pure cash-flow shortfall.

For subcontractors, trade credit insurance may become more important if payment disputes and customer failures increase. Check the credit limits applying to key developers and main contractors, along with notification requirements for overdue invoices and disputed debts.

Our earlier article, Your Subcontractor Just Went Bust: How Supply Chain Insolvency Is Rewriting Construction Contractor Insurance in 2026, explains why customer concentration and unpaid applications deserve close attention. Developers and main contractors should also consider the lessons in Your Main Contractor Just Went Bust: The £5m Ardmore Lesson Every Subcontractor in Essex and London Needs to Learn.

Keep better progress records

Without the cash-flow incentive created by retention, employers may scrutinise valuations and progress more closely. Liquidated damages may also be deducted more readily before practical completion if an employer no longer expects to rely on retention at final account stage.

That makes contemporaneous records essential.

The decision in Mace Construct Ltd v Baltic Investment Holdings Ltd [2026] EWHC 976 (TCC) is a useful reminder. The court considered how an adjudicator could review an extension of time and emphasised the importance of the information available when the decision was made, rather than relying only on hindsight.

Contractors should keep:

• Updated programmes and progress reports
• Site photographs and inspection records
• Payment applications and notices
• Signed instructions and variation records
• Defect notifications and responses
• Meeting minutes and correspondence
• Evidence of completed milestones
• Records showing when information was provided or delayed

When retained cash is no longer available as a buffer, clear evidence may become one of the contractor’s most important protections.

A practical checklist for Essex, Kent and London contractors

Before the Bill becomes law, contractors and subcontractors should:

1. Review current contracts for retention clauses, release dates and transitional exposure.
2. Model cash flow using 30-day and 60-day payment scenarios rather than relying on historic payment behaviour.
3. Price alternative security into tenders, including bond premiums, legal costs and collateral requirements.
4. Start surety discussions early, particularly if an employer may require an on-demand bond.
5. Review group structures and the availability of parent company support.
6. Check milestone drafting so payment stages do not unintentionally become disguised retentions.
7. Improve progress records and maintain a reliable notice process.
8. Review credit limits on key customers and consider trade credit insurance where appropriate.
9. Check Construction Contractor Insurance and General Contractor Liability Insurance against current contractual obligations.
10. Obtain legal and insurance advice before replacing a retention clause with a new security mechanism.

Our earlier guide, Why the 2026 Commercial Payments Bill Will Change the Way You Buy Business Insurance in Essex, covers the wider implications for commercial policyholders.

Conclusion

The proposed retention ban should improve cash flow for many contractors and subcontractors, but it will not remove the underlying risks of defective work, incomplete projects or contractor insolvency. It will shift those risks into contracts, bonds, guarantees, escrow arrangements and more rigorous payment administration.

The timing is important. Demand for retention bonds and performance security may rise while the surety market remains cautious. Smaller contractors could face higher costs or difficulty obtaining the form of security demanded by an employer.

Businesses looking for Business Insurance Essex or Business Insurance London should therefore review their insurance and contract arrangements together. Plan bond costs into bids, assess customer credit exposure and check that liability, professional indemnity and trade credit policies reflect the work and obligations being accepted.

The strongest response is early preparation. Contractors that understand their retention exposure, maintain good records and approach the surety market before a tender deadline will be in a much better position when cash retention finally disappears.

This article provides general information only and is not legal, financial or insurance advice. The Commercial Payments Bill may be amended before Royal Assent, and the effect of any retention clause, bond, guarantee or insurance policy depends on its wording and the circumstances. Obtain specialist professional advice before relying on a particular arrangement.

Frequently asked questions

Is cash retention already banned in UK construction contracts?

No. The Commercial Payments Bill is still progressing through Parliament. It proposes a two-year transition period from commencement, followed by a run-off period for existing arrangements. The final legislation and implementation dates may still change.

What will replace cash retention?

Potential alternatives include retention bonds, performance bonds, project bank accounts, trust accounts, parent company guarantees and carefully drafted milestone payments. Each option provides a different type and level of protection, so the most suitable approach will depend on the project and the parties involved.

Will retention bonds be available to small contractors?

Not necessarily. Retention bonds may be expensive for smaller contractors, and sureties may decline to offer them where the contractor’s financial strength or covenant is insufficient. Early discussions with a specialist broker and surety provider are recommended.

What penalty is proposed for unlawful retention?

The Bill proposes that a payee could recover the retention debt, statutory interest and a fixed sum equal to the higher of £40 or 50% of the retention debt where money is unlawfully retained. The final legal position will depend on the enacted legislation.

Does Construction Contractor Insurance cover a bond claim?

Not automatically. A bond is a separate security instrument, while Construction Contractor Insurance responds according to its own policy wording. Liability, contract works, professional indemnity and trade credit policies may address different parts of the risk.

Should subcontractors consider trade credit insurance?

It may be appropriate where a subcontractor has significant unpaid exposure to one or more developers or main contractors. The policy will usually include debtor-level limits, notification requirements, waiting periods and conditions relating to disputed or overdue invoices.

Why are progress records more important after the retention ban?

Employers may scrutinise valuations, milestones and delay more closely when they can no longer rely on retention as a final-account safeguard. Accurate programmes, notices, photographs, payment applications and defect records can be important evidence in payment and extension-of-time disputes.

The bond is no longer a formality.

That is the clearest message from the latest UK surety market update published by Gallagher Specialty and reported on 27 August 2026. The market had been recovering after several years of severe construction insolvencies, but the collapse of Ardmore Construction Group could now create surety losses of up to £100 million.

For contractors, developers and brokers across Essex, Kent and London, the concern is not simply the size of the loss. It is what caused it.

Ardmore is a warning that surety losses are no longer driven only by project overruns, poor cash flow or a contractor being unable to finish a contract. Building Liability Orders under the Building Safety Act 2022 create a separate route to loss, allowing historic building-safety liabilities to reach across a corporate group years after a project has been completed.

This is the third instalment in our construction insolvency series. We first looked at what happens when your subcontractor goes bust, followed by the risks when your main contractor fails. This time, the focus moves to where much of the financial pain appears next: the bond and surety market.

What happened to Ardmore?

Ardmore Construction Group entered administration on 11 June 2026, alongside related businesses including Ardmore Major Projects, Ardmore Regeneration, Ardmore Fitout and Landmark Facades.

The trigger was a £14.9 million Building Liability Order made under the Building Safety Act 2022. The order followed fire-safety defects at Admiralty Quarter in Portsmouth, a development completed in 2009.

The BLO extended historic liabilities from Ardmore’s collapsed contracting arm to related companies within the wider group. Around 275 jobs were lost when the group entered administration.

This matters because the original construction work was completed many years ago. The problem was not simply that Ardmore had taken on a project it could not complete. A liability connected with historic building defects reached across the group and placed substantial pressure on companies that were connected to the original contracting entity.

Our earlier article, Courts Can Now Reach Your Whole Company Group, explains the wider Building Liability Order developments. The surety market now has to consider what those developments mean for bonds written across the sector.

Why a BLO creates a new surety risk

A performance bond is designed to protect an employer or project owner if a contractor fails to perform its obligations. A payment bond may provide protection around sums due to certain parties, depending on the wording and applicable arrangement.

Traditionally, surety losses have been associated with familiar construction problems:

• A contractor becomes insolvent during a project.
• A project runs materially over budget.
• Subcontractors and suppliers remain unpaid.
• The employer must appoint a replacement contractor.
• The surety pays under the bond and attempts to recover its loss.

A Building Liability Order introduces a different type of exposure. It can allow historic liabilities relating to building safety defects to move beyond the original contracting company and into associated companies, where the statutory requirements are met and the court considers it just and equitable.

That means a contractor or group may face serious liability long after practical completion. It also means a surety assessing the group may need to look beyond current order books and recent accounts. Historic residential work, group structures, remediation discussions, guarantees, previous claims and potential fire-safety issues may all become relevant.

This is the structural point that should not be missed: BLOs are a distinct driver of surety losses, separate from project overrun or short-term cash-flow failure.

The market was already recovering from major losses

The potential Ardmore loss arrives after an extremely difficult period for UK construction sureties.

Bond premiums reportedly rose to more than £1 billion at their peak, compared with approximately £200 million in 2022–23. This followed a wave of insolvencies, including roughly 4,370 construction company collapses in the year to November 2023.

Sureties responded in predictable ways. Underwriting became more cautious, financial information requirements increased and stricter indemnities were demanded from contractors and their directors or group companies.

The market has also absorbed substantial losses linked to Buckingham Group, ISG, Readie and Henry Construction. Surety providers are understood to have recovered nothing from those collapses, while Henry alone was estimated to have generated around £160 million in losses for the bond market.

Gallagher Specialty’s Niki Setchell, a surety partner, has warned that the potential Ardmore losses could erode confidence in the recovery and keep tightened criteria and indemnity requirements in place for the foreseeable future.

That does not mean the wider construction market is necessarily entering another collapse cycle. Order books remain strong and new capacity is entering the market. But it does mean contractors should not assume that terms will return to the easier conditions seen before the insolvency wave.

New capacity is available, but it is not unlimited

There are positive developments. New capacity from providers including Rokstone, Advent and Intact is helping to offset earlier withdrawals by QBE and First Underwriting in 2024.

Rokstone has established a dedicated UK and Ireland surety division led by Darren Guymer, supported by A-rated capacity. This gives brokers and contractors another route when arranging contract bonds, particularly where a bank guarantee is unsuitable or would place too much pressure on borrowing facilities.

However, new capacity does not mean automatic capacity for every contractor. Sureties still need to understand the risk they are taking, and Ardmore is likely to make them more attentive to historic liabilities, corporate structures and the quality of indemnity support.

Contractors in a stronger negotiating position are being advised to ask whether a 5% bond can be accepted instead of the more usual 10% bond. That can materially reduce the facility required and the cost of providing security, but it needs to be agreed before the contract is finalised.

Retention reform could make bonds even more important

The proposed Small Business Protections (Late Payments) Bill, also referred to in policy discussions as the Commercial Payments Bill, could further increase demand for surety products.

The Bill was introduced in the House of Lords in May 2026 and is not yet law. Its proposals include:

• A maximum 60-day payment period for relevant commercial contracts.
• A ban on cash retentions in construction contracts after the proposed transition period.
• Financial penalties for unlawful withholding, with discussions around penalties potentially reaching 50% of the retention debt.
• Stronger enforcement of payment obligations.

Retentions typically represent around 3% to 5% of the contract value, and industry estimates suggest that between £3 billion and £6 billion may be tied up in retentions in England.

If cash retentions are removed, employers and main contractors will still want security against defective work, non-performance and insolvency. Retention bonds, performance bonds, escrow arrangements and other forms of surety may become more important as alternatives.

That could create more demand for bonds at precisely the time when sureties are reassessing their exposure. Contractors should therefore plan for both availability and cost rather than treating a bond as an administrative requirement to be dealt with after winning the work.

What sureties are likely to ask contractors for

A contractor seeking a performance or payment bond should be ready to provide more than a basic application form.

A surety may want to see:

• Recent audited or certified financial statements.
• Management accounts and current cash-flow forecasts.
• Details of existing and proposed contracts.
• A schedule of work in progress.
• Claims, disputes and adjudication information.
• Evidence of completed projects and client references.
• Details of bank facilities and borrowing headroom.
• Parent company support or group guarantees.
• Personal or corporate indemnities.
• Information about historic building work and remediation issues.
• Details of the wider corporate structure.

The indemnity point is particularly important. A surety normally expects to recover losses from the contractor and agreed indemnifying parties if it has to pay under a bond. The extent of that support can affect both underwriting and pricing.

Contractors should also understand whether the requested bond is conditional or on-demand, what events allow a call, how the bond limit operates and whether the wording matches the underlying contract. These are not points to leave until a project is ready to start.

A practical checklist for contractors in Essex, Kent and London

Before bidding for work that requires a bond, I recommend taking the following steps:

1. Start the bond conversation early. Approach a broker and surety before the tender is submitted, not after the contract has been awarded.
2. Prepare financials and references. Have current accounts, management information, cash-flow forecasts and evidence of successful completed projects ready.
3. Understand indemnity demands. Check what personal, parent company or group indemnities may be required.
4. Compare 5% and 10% options. Ask whether the employer will accept a lower bond percentage and calculate the impact on cost and facility usage.
5. Review your group structure. Identify current and historic parents, subsidiaries, sister companies and project companies that could be relevant to BLO exposure.
6. Keep records of historic work. Retain contracts, drawings, certificates, inspection records, correspondence and remediation information for appropriate periods.
7. Factor bond costs into bids. Include premiums, collateral requirements, legal costs and the effect on borrowing capacity.
8. Review Construction Contractor Insurance. Check that your liability, contract works, professional indemnity and other covers reflect the work and entities involved.
9. Review General Contractor Liability Insurance requirements. Make sure contractual liabilities, public liability, products liability and design responsibilities are properly considered.
10. Use specialist advice where necessary. A broker with access to leading master insurance brokers and surety markets can help compare terms rather than relying on the first available facility.

For firms looking for Business Insurance Essex or Business Insurance London, bond requirements should be reviewed alongside the wider insurance programme. A growing contractor working on London residential developments may have very different exposures from a specialist firm operating on commercial refurbishments in Kent or managing a depot and workforce in Essex.

Conclusion

Ardmore has changed the surety conversation.

The issue is no longer only whether a contractor can complete its next project. Sureties are also looking at historic liabilities, group structures, building-safety exposure and the possibility that a claim may emerge years after completion.

The bond market may have new capacity, but confidence is being tested by a potential £100 million Ardmore loss. That is likely to keep underwriting criteria and indemnity requirements tighter for some time.

Contractors should start bond discussions earlier, maintain better financial records, understand what their group structure exposes them to and include the cost of security in every serious bid. They should also review their Construction Contractor Insurance and General Contractor Liability Insurance alongside the bond, because a bond does not replace liability cover and liability cover does not automatically respond to every bond-related loss.

For contractors and developers across Essex, Kent and London, a specialist insurance broker can help turn a late-stage bond problem into an issue that is addressed properly at the beginning of the project.

This article provides general information only and is not legal or financial advice. Building Liability Orders, bond obligations, indemnities and insurance responses depend on the facts, contract terms and policy wording. Obtain professional advice on your specific circumstances.

Frequently asked questions

What is the Ardmore impact on the UK surety market?

Gallagher Specialty’s mid-year 2026 update indicated that Ardmore’s collapse could result in market-wide surety losses of up to £100 million. The loss is significant because it follows several major construction insolvencies and comes as the UK surety market was beginning to recover.

Why is a Building Liability Order relevant to surety losses?

A Building Liability Order can extend certain historic building-safety liabilities from an original contracting company to associated companies in the wider group. This creates a source of loss that is separate from ordinary project failure, overrun or cash-flow problems.

Should contractors request a 5% bond instead of a 10% bond?

Where the contractor has a strong financial position and negotiating leverage, it may be sensible to ask whether a 5% bond is acceptable. The employer must agree, and the appropriate percentage will depend on the contract, project and risk allocation.

What information does a surety need before issuing a bond?

A surety will commonly want financial statements, management accounts, cash-flow forecasts, work-in-progress details, contract information, claims history, project references, banking information and details of proposed indemnities and group support.

Could bonds replace cash retentions?

If proposed construction retention reforms become law, retention bonds and other forms of surety may become more common alternatives to withheld cash. The final legal position and implementation timetable should be checked before relying on a particular arrangement.

Does Construction Contractor Insurance cover a bond claim?

Not automatically. A bond is a separate contractual security instrument, while Construction Contractor Insurance responds according to its own policy wording. Liability, professional indemnity, contract works and other sections may be relevant to particular circumstances, but the policy must be reviewed carefully.

What should a contractor in Essex or London do now?

Start bond discussions early, prepare accurate financial information, review indemnity requirements, assess the exposure created by historic projects and check Construction Contractor Insurance and General Contractor Liability Insurance against current contractual obligations.

Sources

• Gallagher Specialty surety market update reported by Insurance Business UK
• Building Safety Act 2022, section 130
• Commercial Payments Bill overview

For contractors working across Essex, Kent and London, the Building Safety Act is no longer just a compliance issue for the legal or design team. It is changing the commercial risk of taking on work, particularly higher-risk building projects where approval, documentation and handover now depend on a much more demanding regulatory process.

The latest Building Safety Regulator data, reported on 19 August 2026, makes the position clear. Between 11 May and 1 August:

• 340 valid Gateway Two applications received decisions, with an 82% approval rate.
• 300 applications, representing 47% of the total received, were deemed invalid or withdrawn.
• New-build applications had a median decision time of 22 weeks.
• Remediation applications took a median of 34 weeks.
• Gateway Three decisions took a median of 16 weeks, against an eight-week statutory target.
• No new-build project that has passed Gateway Two has yet reached Gateway Three.

There has been improvement, especially through the BSR’s Innovation Unit. Median new-build approval time has reduced from 43 weeks to 22 weeks over the past year, based on 102 determinations. But even the improved figure remains well beyond the 12-week statutory target for new-build Gateway Two approval.

For contractors, this creates a difficult position. Clients want certainty, consultants are narrowing their own exposure, and insurers are becoming more cautious around fire safety, façades and higher-risk buildings. The contractor can end up carrying the risk of an outcome that depends partly on decisions and information outside its control.

The gateway timetable is now a commercial risk

The Gateway regime is intended to create hard stops at key stages of a higher-risk building project. Gateway Two approval is required before construction can proceed, while Gateway Three approval is required before occupation, subject to the relevant rules and limited exceptions.

That structure is important for safety, but it also creates a programme risk that cannot sensibly be managed by relying on statutory targets alone.

The statutory target for a new-build Gateway Two decision is 12 weeks. However, Beale & Co reported that the average time to reach a decision was 35 weeks in the 12 weeks to 1 May 2026. The latest figures show that new-build decisions are moving more quickly, but Category A and B applications still had a median approval time of 32 weeks and remediation applications 34 weeks.

Major change requests add another layer of uncertainty. There were 181 live requests in the latest reporting period, with 42% relating to new-build projects. New-build change requests were taking an average of seven weeks to close, compared with a six-week statutory target.

This matters because a contract may still contain a completion date based on an assumed 12-week approval period. If the approval takes 22, 32 or 35 weeks, the contractor may face extended preliminaries, disrupted labour arrangements, financing pressure and claims for liquidated damages.

The problem becomes more serious when the contract treats gateway approval as an absolute contractor obligation. A contractor may be responsible for coordinating information and managing the construction process, but it cannot guarantee that a regulator will approve a submission within a particular period.

That distinction needs to be made at tender stage, not after the project has started.

Clients are transferring risk down the supply chain

The direction of travel in many building contracts is familiar. The employer wants a single point of responsibility, so BSA compliance is written as a broad contractor obligation. The contractor then looks to pass the same obligation to designers, consultants and subcontractors.

In practice, that risk is not always passed through effectively.

A main contractor may be required to warrant that the project will comply with the Building Safety Act, satisfy the regulator and be fit for occupation. Yet the architect or specialist consultant may have a reasonable-skill-and-care appointment, a liability cap and exclusions for particular fire-safety or façade risks.

That leaves a gap between the promise made by the contractor and the liability accepted by the consultant.

We are also seeing contractual provisions that:

• carve “building safety” or “fire safety” claims out of liability caps;
• extend liability periods, sometimes by reference to the 30-year retrospective period under the Defective Premises Act;
• impose competency warranties that go beyond the contractor’s statutory role;
• create open-ended obligations to maintain the golden thread;
• treat regulatory delay as contractor delay; and
• retain high liquidated damages exposure even where completion depends on Gateway Three approval.

Some of these obligations may be reasonable if they are carefully defined and priced. The concern is the broad drafting now appearing in some contracts, where the contractor is expected to guarantee an outcome without having control over every design input, client decision or regulatory response.

Risk cannot simply be left in the middle. It needs to be identified, allocated to the party best placed to control it and supported by insurance that actually responds.

Fitness for purpose can create an insurance gap

Fitness for purpose wording deserves particular attention.

A fitness for purpose obligation can require a contractor to guarantee that the works will achieve a specified outcome. On a BSA project, that may be linked to compliance, fire safety or suitability for occupation.

The difficulty is that professional indemnity insurance is generally written around negligence or breach of a duty to exercise reasonable skill and care. It is not usually designed to cover every failure to achieve an absolute result, particularly where the failure does not arise from negligence.

This can leave a contractor with a contractual liability that is wider than its PI cover.

A contractor should therefore resist an unqualified fitness for purpose obligation where possible. A more workable position may be to:

• express design obligations by reference to reasonable skill and care;
• specify compliance with applicable law and building regulations without guaranteeing regulator approval;
• identify which party is responsible for each design element;
• ensure consultant appointments are back-to-back with the main contract; and
• obtain written confirmation from the broker and insurer that the proposed obligations are understood.

This is not about avoiding responsibility for safety. It is about ensuring the contract reflects the responsibility the contractor can actually manage and insure.

Gateway Three needs to be planned from contract stage

Gateway Three is becoming the next major pressure point.

The latest figures show 45 Gateway Three applications received in the relevant 12-week period, with 29 decisions made. The approval rate was 72% and the median determination time was 16 weeks, double the statutory eight-week target. Importantly, no new-build project that has passed through Gateway Two has yet reached Gateway Three.

The lesson is that Gateway Three cannot be treated as an administrative formality at the end of construction. The design decisions made earlier must still be evidenced, and the completed building must reflect the approved design.

Iterative design-and-build between Gateways Two and Three is not a reliable option. If significant changes are made, a further submission to the BSR may be required. That can affect cost, completion and occupation.

The golden thread is central to this process. It should show:

• what decisions were made;
• who made them;
• which information supported them;
• what changed;
• who approved the change; and
• how the final construction reflects the approved design.

The golden thread is not merely a document-management exercise. It may become important legal evidence if a later dispute concerns delay, defects or responsibility for a design decision.

Contracts should therefore name the person or organisation responsible for coordinating this information. They should also require supply chain records to be provided in a consistent format and within agreed timescales.

What this means for Construction Contractor Insurance

The insurance market is narrowing at the same time as contractual obligations are expanding. Underwriters are applying greater scrutiny to higher-risk building work, façade systems and fire-safety responsibilities. Contractors may encounter higher premiums, larger excesses, restricted limits and exclusions that were not present in older policies.

There has also been reduced capacity in parts of the PI market, including following Wren’s withdrawal from the PI market. This does not mean that suitable insurance is impossible, but it does mean that late discussions and generic policy comparisons are less likely to produce a reliable result.

Your Construction Contractor Insurance and General Contractor Liability Insurance should be reviewed against the work you are actually undertaking. In particular, check:

• whether façade and fire-safety activities are excluded;
• whether design responsibility has been accepted inadvertently;
• whether contractual liability is wider than the insured negligence standard;
• whether the policy limit is adequate for the project and potential aggregation;
• whether subcontractor and consultant insurance is sufficient; and
• whether notification and record-retention requirements can be met.

A policy can be valid and still fail to meet a contractual requirement. Equally, a contract can contain an insurance obligation that the market will not provide on commercially realistic terms.

For contractors looking for Business Insurance Essex or Business Insurance London, this is where an experienced specialist broker can add value. Moyak Insurance Services works with leading UK master insurance brokers and takes an individual approach to each client, helping construction businesses assess their contractual exposure before cover is arranged. You can contact Moyak Insurance Services to discuss a review of your current arrangements.

Practical steps for contractors

Before signing a new contract, contractors should:

1. Review gateway obligations at tender stage. Identify which approvals, submissions and decisions are within your control and which depend on the client, design team or BSR.

2. Use realistic programme assumptions. Do not build a 12-week statutory target into the commercial programme without testing longer scenarios.

3. Negotiate time and cost relief. Gateway delays, regulator information requests, major change requests and changes in law should be addressed expressly.

4. Protect the completion date. Consider appropriate liquidated damages carve-outs, relief events, long-stop dates, LAD holidays and early-handover arrangements where they genuinely reduce project risk.

5. Qualify fitness for purpose wording. Aim for obligations aligned with reasonable skill and care and clarify that regulator approval cannot be guaranteed.

6. Make the supply chain back-to-back. Consultant appointments and subcontract terms should reflect the obligations imposed on the main contractor, including records, competency and information requirements.

7. Build the golden thread from day one. Do not wait until Gateway Three to discover that design decisions, product information or change records are incomplete.

8. Check insurance before accepting the risk. Ask specifically about fire safety, façades, PI exclusions, liability caps, retroactive cover and any contractual warranties.

The Building Safety Act is raising standards for good reason, but the commercial framework around it still needs to catch up. Contractors should not be expected to guarantee regulatory decisions or absorb liabilities that consultants, clients and insurers have avoided.

The practical response is disciplined tender review, realistic programming, clear delegation and early insurance advice. For businesses in Essex, Kent and London, a proper review of Construction Contractor Insurance and wider General Contractor Liability Insurance may be the difference between taking on a difficult project with managed exposure and signing a contract that quietly transfers an uninsurable risk to your business.

For further practical guidance, visit Moyak’s useful information hub. Regulatory requirements and insurance policies can vary by project, so contractors should obtain appropriate legal and insurance advice before relying on any contract wording.

Frequently asked questions

What is the current Gateway Two approval time?

The latest data for 11 May to 1 August 2026 shows a median decision time of 22 weeks for new-build applications. Category A and B applications had a median of 32 weeks, while remediation applications had a median of 34 weeks.

Can a contractor guarantee Gateway approval?

A contractor can take responsibility for preparing, coordinating and managing information within its control, but it should be cautious about guaranteeing approval or a regulator’s decision within a fixed period. The contract should distinguish contractor-caused delay from regulatory delay and third-party design issues.

Does professional indemnity insurance cover fitness for purpose obligations?

Professional indemnity insurance is generally written around negligence and reasonable skill and care. An absolute fitness for purpose warranty may create liability that is wider than the policy responds to, so the contract and policy wording should be reviewed together before the obligation is accepted.

Why is Gateway Three important for contractors?

Gateway Three is linked to completion and occupation. The contractor must help demonstrate that the approved design has been properly constructed and that the required safety information is complete. A failure to plan for the final gateway can delay handover even where physical construction is substantially finished.

What insurance should a construction contractor review?

A contractor should review Construction Contractor Insurance, General Contractor Liability Insurance, professional indemnity arrangements where design responsibility is involved, contract works cover and relevant subcontractor or consultant insurance. Particular attention should be paid to façade, cladding, fire-safety and contractual liability exclusions.

When a main contractor enters administration, the immediate concern for a subcontractor is usually simple: who is going to pay my invoice?

The wider consequences are more complicated. You may be left with unpaid applications, held retentions, materials on site, staff and plant committed to a project, and uncertainty over whether you can continue working. You may also discover that the insurance arrangements you relied on were placed in the main contractor’s name and do not give you the protection you expected.

The recent administration of Ardmore Construction Group brings this into sharp focus.

Ardmore, a group with reported turnover of around £344 million, entered administration in June 2026 after losing a judgment requiring it to pay approximately £14.9 million to Crest Nicholson. The dispute related to cladding and fire-safety defects at 19 residential buildings at Admiralty Quarter in Portsmouth.

The group was one of seven linked companies held responsible under a Building Liability Order. Administrators from BTG said the group entered administration before Crest could obtain a final charging order, as part of a wider strategy involving group companies subject to the same ruling. An appeal is still being considered.

The result for the supply chain is particularly uncomfortable. Around £5.1 million is owed to subcontractors, while approximately £1.8 million is owed to 132 former employees. The administrators do not expect unsecured creditors to recover any cash.

For smaller contractors across Essex, Kent and London, the lesson is not that every major contractor is about to fail. It is that your exposure is often much larger than the invoice currently sitting in your accounts system.

When the main contractor fails, subcontractors usually rank behind others

A subcontractor owed money by an insolvent main contractor will commonly be treated as an unsecured creditor. That generally places the subcontractor behind secured lenders and preferential creditors, which can include certain employee claims.

In practical terms, this may mean:

• Unpaid applications are not paid in full.
• Retentions may be delayed or lost.
• Disputed variations become harder to resolve.
• Materials supplied on credit may not be recovered.
• Work in progress may be taken over by a replacement contractor.
• The subcontractor may have to fund wages, suppliers and overheads while waiting for an uncertain dividend.

This is why a profitable project can still create a serious cash-flow problem. Your accounts may show a healthy turnover, but if one main contractor represents a large part of your unpaid ledger, the business can become exposed very quickly.

Ardmore’s administration report listed millions of pounds in assets tied up in debtors, retentions and work in progress. Even so, estimated recoveries were limited and unsecured creditors were expected to receive nothing. The presence of assets does not necessarily mean there will be money available for the supply chain.

The earlier article, Your Subcontractor Just Went Bust, looked at the risk from the main contractor’s perspective. Ardmore shows the other side of the problem: the main contractor’s failure can transfer the financial shock directly to smaller firms below it.

Contract terms can decide how much protection you have

Insurance cannot replace a properly negotiated construction contract. Before accepting work, subcontractors should understand the provisions that will apply if the main contractor stops paying or becomes insolvent.

Pay-when-paid and pay-if-paid clauses are an obvious starting point. Their operation depends on the contract wording and applicable law, but they can affect whether payment to you is linked to the main contractor being paid by the employer.

You should also examine:

• Retention percentages and release dates.
• Set-off rights and the process for disputing deductions.
• Termination provisions.
• Step-in rights for the employer or funder.
• Direct agreements with the employer.
• Collateral warranties.
• Parent company guarantees.
• Requirements to provide bonds or guarantees.
• Rights to remove your plant and materials from site.

A direct agreement or collateral warranty will not automatically guarantee payment, but it may create a direct relationship with another project party. A parent company guarantee may provide an additional route to recovery if the contracting entity fails, although its value depends on the guarantor’s financial position and the terms agreed.

The important point is to review these documents before the project starts. Once a main contractor is already showing signs of distress, your negotiating position is usually much weaker.

Project insurance may not protect you if you are not properly included

Some projects are insured under arrangements placed by the main contractor. Subcontractors may assume that being appointed to the project means they are automatically protected.

That assumption can be unsafe.

Check:

1. Who is named as an insured party?
2. Are subcontractors included, and in what capacity?
3. Does the policy contain non-vitiation wording?
4. Can one insured party’s conduct prejudice another insured party?
5. Does the policy continue if the main contractor enters administration?
6. Do you have direct rights to notify a claim?
7. Are your own contractual liabilities covered?
8. Are defective work, rectification and pure financial losses excluded?

A project policy may respond to physical damage to works in progress, but that does not mean it will pay an unpaid subcontractor invoice. Nor will it necessarily cover the cost of completing defective or unfinished work.

The legal and insurance position depends on the policy structure. However, the main contractor’s insolvency can make communication, claims notification and policy administration much more difficult. If you are relying on a project policy, it is sensible to understand your position while the contractor is still trading.

Trade credit insurance can protect key customer exposures

Trade credit insurance is designed to protect eligible debts when a customer becomes insolvent or, depending on the policy, fails to pay within an agreed period.

For a subcontractor, the relevant exposure may include:

• Certified invoices.
• Approved applications for payment.
• Materials supplied on credit.
• Contractual payments due from a main contractor.
• Certain debts affected by prolonged default.

The important detail is that trade credit insurance usually operates through debtor-level limits. Your policy may not provide the same amount of protection for every customer. An insurer may agree to cover £100,000 of exposure to one contractor but only £25,000 to another.

You also need to understand notification requirements. If you continue supplying a customer after a credit limit has been reduced, or fail to report overdue payments within the required period, the claim may be affected.

No insurance policy removes the need to monitor customers. In fact, the strongest approach combines credit checks, payment monitoring and sensible limits on exposure to any one main contractor.

The insolvency figures remain a warning for specialist trades

Construction recorded 3,841 company insolvencies in England and Wales in the 12 months to July 2026, representing around 17% of all cases where the industry was recorded. It was the largest total of any sector.

Specialist construction activities accounted for the largest share. This includes many of the trades that operate as subcontractors, including electrical and plumbing installation, plastering, painting, glazing, finishing and site preparation.

That matters because smaller firms often carry the greatest cash-flow pressure. They may have fewer customers, limited borrowing capacity and a high proportion of turnover tied to one or two major projects.

At the same time, professional indemnity rates are softening. WTW has forecast average construction PI rate reductions of around 5% to 10% in 2026, with reductions of up to 20% possible for well-managed risks.

That is welcome, but it should not be confused with a general reduction in construction risk. When premiums soften, differences in cover can become more important. A cheaper policy with a restrictive insolvency exclusion, inadequate limits or poorly described activities may offer less practical protection than expected.

Building safety claims can reach beyond one company

The Ardmore case also demonstrates why subcontractors need to understand the wider corporate group behind the name on their order.

A Building Liability Order can make a relevant liability of one company also become the liability of associated companies where the court considers that outcome just and equitable. In Ardmore, seven linked companies were held responsible, while administrators identified up to 23 further potential claims connected with historic work.

Those potential claims were estimated at as much as £300 million, although no judgments had been made on them at the time of reporting.

For subcontractors, this reinforces the need to identify the actual contracting entity, but also the group behind it. A project may be administered by one company, funded by another and supported by a parent or sister company. The corporate structure can affect guarantees, payment routes, insurance arrangements and the parties involved in a dispute.

Our related guide, Courts Can Now Reach Your Whole Company Group, explains the wider Building Liability Order implications.

The Building Safety Regulator also became an independent body in January 2026, with responsibility for the higher-risk building regime and Gateway process in England. This adds another formal compliance layer for projects where fire safety, structure and building information are closely examined.

A failure involving historic building work can therefore continue long after the original project has finished. Subcontractors should retain contracts, drawings, variations, inspection records, certificates and correspondence for an appropriate period, particularly where their work forms part of a higher-risk building.

A practical checklist for subcontractors

If a main contractor represents a significant part of your turnover, I recommend reviewing the following:

1. Identify your real contracting party. Check the legal name at Companies House, not just the trading name on site paperwork.
2. Monitor payment behaviour. Repeated late payments, unexplained certificate delays and requests for extended terms should be treated as warning signs.
3. Cap exposure to one main contractor. Set an internal limit for unpaid invoices, retentions and committed work in progress.
4. Review pay-when-paid and set-off clauses. Understand how they could affect recovery if the contractor fails.
5. Document every variation. Keep signed instructions, applications, delivery notes, photographs and completion records.
6. Check project insurance. Confirm who is insured and whether you have direct rights and non-vitiation protection.
7. Consider trade credit insurance. Ask about debtor-level limits, disputed invoices and reporting requirements.
8. Understand bonds and guarantees. Check who is protected by a payment bond or performance bond and how a call can be made.
9. Register as a creditor promptly. If administration or liquidation is announced, follow the administrators’ process without delay.
10. Review your own insurance wording. Make sure your Construction Contractor Insurance responds to your actual trade, contractual liabilities and project obligations.

Moyak Insurance Services helps businesses review Business Insurance Essex and Business Insurance London, including public liability, employers’ liability, professional indemnity, contract works, plant, tools and wider commercial cover.

Although General Contractor Liability Insurance is a term more commonly used in the US, the principle is familiar in the UK: your liability policy must reflect the contracts you sign and the work you actually undertake. A certificate alone is not enough.

Conclusion

The Ardmore administration is a reminder that the main contractor’s financial strength is part of your risk assessment. A large turnover figure does not guarantee that subcontractors will be paid, and assets held by an insolvent company may not produce a meaningful recovery for unsecured creditors.

The practical response is not to stop working with larger contractors. It is to control your exposure before the warning signs become impossible to ignore.

Know who you are contracting with, limit customer concentration, document your work, check project insurance and review your Construction Contractor Insurance against the risks your business is carrying today.

If you are concerned about a major customer, an unpaid invoice or the insurance arrangements on a current project, speak to your broker early. Once the administration notice has been issued, some options may already have disappeared.

This article is for general information only and is not legal or insolvency advice. The effect of contract clauses, bonds, guarantees and insurance policies depends on the wording and circumstances. Obtain professional advice on your specific position.

Frequently asked questions

What happens to a subcontractor when the main contractor goes bust?

A subcontractor will usually become an unsecured creditor for unpaid invoices and other sums due. Recovery may be limited or nil after secured and preferential creditors are dealt with.

Does Construction Contractor Insurance cover unpaid invoices?

Usually not. Liability and contract works policies generally respond to defined insured events, not simply to a customer’s failure to pay. Trade credit insurance may be more relevant for eligible unpaid debts.

Can trade credit insurance cover a main contractor’s insolvency?

It can, subject to the policy wording, debtor-level credit limits, waiting periods, notification requirements and any exclusions relating to disputed debts or continued trading after a limit is reduced.

Should subcontractors check the main contractor’s insurance?

Yes. Confirm who is insured, whether subcontractors are included, whether the policy contains non-vitiation wording and whether you have direct rights if the main contractor enters administration.

Can a Building Liability Order reach several companies in a group?

Yes. Where the statutory requirements are met, a Building Liability Order can extend a relevant liability to associated companies. The Ardmore case involved seven linked companies.

What insurance should a subcontractor review?

Depending on the trade and contractual obligations, this may include employers’ liability, public liability, products liability, contract works, tools and plant, professional indemnity, business interruption and trade credit insurance.

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:

1. Check the warranty period. Confirm that structural warranty and latent defects cover reflects the 15-year requirement and liability window.

2. 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.

3. Calculate the deductible. Ask how a deductible applies to one event, multiple locations, design defects or repeated workmanship issues.

4. Review PI wording. Architects, consultants and contractors providing design input should check that their professional services and planning responsibilities are accurately described.

5. Improve project records. Keep inspection reports, photographs, material certificates, design changes, subcontractor checks and completion documents in an organised format.

6. Check contractual insurance requirements. A contract may require limits or extensions that are not included in the existing policy.

7. Plan for the long tail. Keep insurance records and project evidence beyond completion, particularly where statutory or contractual claims may arise many years later.

8. 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.