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COVID and the construction industry – the positive outcomes

03 September 2020
As construction emerges into a post COVID world, contractors and consultants are assessing the impact on their construction projects of delays and associated liabilities.

At the same time lawyers are anticipating an associated significant increase in construction claims and insurers, who’s construction business had already become a hardened market, await notifications in the inevitable pursuit of reimbursement of COVID delay losses.

With construction having already been assessed as an increasingly risky insurance sector, COVID can only now negatively exaggerate this position.

Or will it?

Could COVID actually represent an opportunity to improve construction’s reputation and once again become an attractive sector for insurers?

Firstly construction is in recession which will naturally remove some of the risk in the form of exiting poorly managed businesses.

Secondly, and significantly, does the research undertaken by Loughborough University (LU), on construction sites which have adapted to COVID, reveal a game changing opportunity? 

LU's report can be accessed here >

Surprisingly the research concludes that the need to properly consider how site construction works are going to be undertaken has actually led to an improvement in site productivity.

An example is a site manager quoted stating seven workers can now undertake work that pre-COVID required 10 workers.

Some of the factors behind this productivity uplift include:

  • Better and more detailed task planning.
  • More space, fewer people, and less overlap of trades in the workplace improves gang/task productivity.
  • Better planning by workers e.g. preparation of workplaces re: tools and materials.
  • Less double handling of materials.

This could represent a watershed moment for construction. An opportunity to actually manage construction with competent expertise in lieu of discharging responsibilities into the variable supply chain.

This approach not only could apply to construction activities but also the development of constructions designs. Fundamentally employers also need to recognise this opportunity in their procurement of construction.

Is it possible this nirvana could be realised? Employers engaging consultants and contractors on the basis of an acceptance of the risk being retained in the most appropriate location, expertise being provided by the most competent parties and pro-active project management with retained input of expertise throughout the project life. Increased productivity and risk management.

One standout observation is that the increase of on-site productivity has been the result of legislation. In other words non-compliance was not an option. The industry has been discussing for years issues such as late/non-payment, retentions, and inappropriate risk allocation. The lesson learned from COVID for construction industry bodies must be that the only way to obtain progress on any of these issues is by full engagement with government and appropriate resultant legislation.

COVID may have been the opportunity construction needed to step off the commercial pressure conveyor belt and evolve into a well-managed low risk sector attractive to insurers.

Further Reading