Case study: TUE's market-driven PI strategy for construction success

The risk

We were recently approached by a long-term broker partner representing one of Ireland's top construction firms. For several years, this client had faced difficulties securing adequate Professional Indemnity (PI) coverage due to the challenges in the hardening insurance market. Local insurers had imposed restrictions on cover and limits, which had directly impacted the construction firm’s ability to win key contracts. The broker advised that the client anticipated a significant increase in premiums for the upcoming renewal and was frustrated by policy restrictions that had cost them several prestigious contracts.

TUE's strategic approach

Recognising the client's need for a more flexible and comprehensive solution, the TUE team quickly logged the risk with several key markets. Early engagement was critical, allowing the team to thoroughly assess the client’s unique needs and communicate these to potential insurers. The two areas of concern were:

• Fire safety exclusion: The exclusion imposed by the current insurers had restricted the client’s ability to tender for high-value contracts.
• Restrictive aggregate limit of indemnity: The client’s current policy featured a restrictive aggregate limit, which was insufficient for their larger-scale projects.

To tackle these issues, TUE proposed a tailored placement strategy. This involved a split market placement on the client’s primary policy to address capacity limitations. Excess layers were then structured to follow the lead insurer, ensuring that the client’s full coverage requirements were met. To refine this strategy, TUE brought together the client, the retail broker, and multiple interested markets into conversation. This collaborative approach ensured all parties were aligned on placement strategy and coverage objectives.

The outcome

Through constant engagement and meticulous planning, TUE successfully placed the full €20 million limit that the client required. Not only did TUE secure the necessary coverage, they also negotiated unlimited aggregate reinstatements – a significant enhancement from the client's previous restrictive policy. Furthermore, TUE managed to eliminate the fire safety exclusion across the client’s portfolio, addressing the critical barrier that had previously hindered their ability to win contracts.

As an added benefit, TUE was able to secure this improved coverage while saving the client a substantial sum compared to the renewal premium proposed by their incumbent insurers. The broader scope of cover and financial savings provided the client with greater flexibility and competitiveness in their tenders.

Benefits to the client and broker

This case underscores the significant advantages of working with TUE, a Lloyd’s broker with access to long-standing syndicates that can offer unique and competitive solutions. For the client, the benefits were clear:

• Wider coverage: The client now has a policy that fully aligns with their business needs, allowing them to bid on previously inaccessible contracts.
• Cost savings: The new policy not only provided more comprehensive coverage but also resulted in significant premium savings.
• Long-term partnership: TUE’s hands-on approach established a long-term relationship with the client, ensuring that their needs will continue to be met as their business grows and evolves.

For the retail broker, partnering with TUE allowed them to deliver an exceptional outcome for their client, strengthening their own relationship with the construction firm. TUE’s proactive communication, strategic market placement and problem-solving expertise, contributed to a successful collaboration that enhanced the reputation of all parties involved.